JPMORGAN CHASE & CO - Quarter Report: 2023 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

the Securities Exchange Act of 1934

For the quarterly period ended

Commission file

June 30, 2023

number

1-5805

JPMorgan Chase & Co.

(Exact name of registrant as specified in its charter)


Delaware		13-2624428
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

383 Madison Avenue,
New York,	New York	10179
(Address of principal executive offices)		(Zip Code)

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

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	JPM	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD	JPM PR D	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE	JPM PR C	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG	JPM PR J	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.55% Non-Cumulative Preferred Stock, Series JJ	JPM PR K	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.625% Non-Cumulative Preferred Stock, Series LL	JPM PR L	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.20% Non-Cumulative Preferred Stock, Series MM	JPM PR M	The New York Stock Exchange
Alerian MLP Index ETNs due May 24, 2024	AMJ	NYSE Arca, Inc.
Guarantee of Callable Fixed Rate Notes due June 10, 2032 of JPMorgan Chase Financial Company LLC	JPM/32	The New York Stock Exchange

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

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

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


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

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

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

Number of shares of common stock outstanding as of June 30, 2023: 2,906,085,273

FORM 10-Q

TABLE OF CONTENTS


Part I – Financial information		Page
Item 1.	Financial Statements.
	Consolidated Financial Statements – JPMorgan Chase & Co.:
	Consolidated statements of income (unaudited) for the three and six months ended June 3 0 , 2023 and 2022	96
	Consolidated statements of comprehensive income (unaudited) for the three and six months ended June 3 0 , 2023 and 2022	97
	Consolidated balance sheets (unaudited) at June 3 0 , 2023 and December 31, 2022	98
	Consolidated statements of changes in stockholders’ equity (unaudited) for the three and six months ended June 3 0 , 2023 and 2022	99
	Consolidated statements of cash flows (unaudited) for the six months ended June 3 0 , 2023 and 2022	100
	Notes to Consolidated Financial Statements (unaudited)	101
	Report of Independent Registered Public Accounting Firm	197
	Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the three months ended June 3 0 , 2023 and 2022	198
	Glossary of Terms and Acronyms and Line of Business Metrics	200
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Consolidated Financial Highlights	3
	Introduction	4
	Executive Overview	5
	Consolidated Results of Operations	10
	Consolidated Balance Sheets and Cash Flows Analysis	16
	Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures	20
	Business Segment Results	22
	Firmwide Risk Management	47
	Capital Risk Management	48
	Liquidity Risk Management	54
	Consumer Credit Portfolio	65
	Wholesale Credit Portfolio	70
	Investment Portfolio Risk Management	83
	Market Risk Management	84
	Country Risk Management	90
	Critical Accounting Estimates Used by the Firm	91
	Accounting and Reporting Developments	94
	Forward-Looking Statements	95
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	209
Item 4.	Controls and Procedures.	209
Part II – Other information
Item 1.	Legal Proceedings.	209
Item 1A.	Risk Factors.	209
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	209
Item 3.	Defaults Upon Senior Securities.	210
Item 4.	Mine Safety Disclosures.	210
Item 5.	Other Information.	210
Item 6.	Exhibits.	211

JPMorgan Chase & Co.

Consolidated financial highlights (unaudited)


As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)																	Six months ended June 30,
	2Q23				1Q23			4Q22			3Q22			2Q22			2023				2022
Selected income statement data
Total net revenue	$	41,307			$	38,349		$	34,547		$	32,716		$	30,715		$	79,656			$	61,432
Total noninterest expense	20,822				20,107			19,022			19,178			18,749			40,929				37,940
Pre-provision profit(a)	20,485				18,242			15,525			13,538			11,966			38,727				23,492
Provision for credit losses	2,899				2,275			2,288			1,537			1,101			5,174				2,564
Income before income tax expense	17,586				15,967			13,237			12,001			10,865			33,553				20,928
Income tax expense	3,114				3,345			2,229			2,264			2,216			6,459				3,997
Net income	$	14,472			$	12,622		$	11,008		$	9,737		$	8,649		$	27,094			$	16,931

Earnings per share data
Net income: Basic	$	4.76			$	4.11		$	3.58		$	3.13		$	2.77		$	8.86			$	5.40
Diluted	4.75				4.10			3.57			3.12			2.76			8.85				5.39
Average shares: Basic	2,943.8				2,968.5			2,962.9			2,961.2			2,962.2			2,956.1				2,969.6
Diluted	2,948.3				2,972.7			2,967.1			2,965.4			2,966.3			2,960.5				2,973.7

Market and per common share data
Market capitalization	422,661				380,803			393,484			306,520			330,237			422,661				330,237
Common shares at period-end	2,906.1				2,922.3			2,934.3			2,933.2			2,932.6			2,906.1				2,932.6
Book value per share	98.11				94.34			90.29			87.00			86.38			98.11				86.38
Tangible book value per share (“TBVPS”)(a)	79.90				76.69			73.12			69.90			69.53			79.90				69.53
Cash dividends declared per share	1.00				1.00			1.00			1.00			1.00			2.00				2.00

Selected ratios and metrics
Return on common equity (“ROE”)(b)	20		%		18		%	16		%	15		%	13		%	19		%		13		%
Return on tangible common equity (“ROTCE”)(a)(b)	25				23			20			18			17			24				16
Return on assets(b)	1.51				1.38			1.16			1.01			0.89			1.45				0.87
Overhead ratio	50				52			55			59			61			51				62
Loans-to-deposits ratio	54				47			49			46			45			54				45
Firm Liquidity coverage ratio (“LCR”) (average)(c)	112				114			112			113			110			112				110
JPMorgan Chase Bank, N.A. LCR (average)(c)	129				140			151			165			169			129				169
Common equity Tier 1 (“CET1”) capital ratio(d)	13.8				13.8			13.2			12.5			12.2			13.8				12.2
Tier 1 capital ratio(d)	15.4				15.4			14.9			14.1			14.1			15.4				14.1
Total capital ratio(d)	17.3				17.4			16.8			16.0			15.7			17.3				15.7
Tier 1 leverage ratio(c)(d)	6.9				6.9			6.6			6.2			6.2			6.9				6.2
Supplementary leverage ratio (“SLR”)(c)(d)	5.8				5.9			5.6			5.3			5.3			5.8				5.3

Selected balance sheet data (period-end)
Trading assets	$	636,996			$	578,892		$	453,799		$	506,487		$	465,577		$	636,996			$	465,577
Investment securities, net of allowance for credit losses	612,203				610,075			631,162			618,246			663,718			612,203				663,718
Loans	1,300,069				1,128,896			1,135,647			1,112,633			1,104,155			1,300,069				1,104,155
Total assets	3,868,240				3,744,305			3,665,743			3,773,884			3,841,314			3,868,240				3,841,314
Deposits	2,398,962				2,377,253			2,340,179			2,408,615			2,471,544			2,398,962				2,471,544
Long-term debt	364,078				295,489			295,865			287,473			288,212			364,078				288,212
Common stockholders’ equity	285,112				275,678			264,928			255,180			253,305			285,112				253,305
Total stockholders’ equity	312,516				303,082			292,332			288,018			286,143			312,516				286,143
Headcount	300,066			(e)	296,877			293,723			288,474			278,494			300,066			(e)	278,494

Credit quality metrics
Allowances for credit losses	$	24,288			$	22,774		$	22,204		$	20,797		$	20,019		$	24,288			$	20,019
Allowance for loan losses to total retained loans	1.75		%		1.85		%	1.81		%	1.70		%	1.69		%	1.75		%		1.69		%
Nonperforming assets	$	7,838			$	7,418		$	7,247		$	7,243		$	7,845		$	7,838			$	7,845
Net charge-offs	1,411				1,137			887			727			657			2,548				1,239
Net charge-off rate	0.47		%		0.43		%	0.33		%	0.27		%	0.25		%	0.45		%		0.24		%

As of and for the period ended June 30, 2023, the results of the Firm include the impact of the First Republic acquisition. Refer to page 24 and Note 28 for additional information.

(a)Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity (“TCE”) is also a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 20-21 for a further discussion of these measures.

(b)Quarterly ratios are based upon annualized amounts.

(c)For the six months ended June 30, 2023 and 2022, the percentage represents average ratios for the three months ended June 30, 2023 and 2022.

(d)The ratios reflect the Current Expected Credit Losses (“CECL”) capital transition provisions. Refer to Capital Risk Management on pages 48-53 of this Form 10-Q and pages 86-96 of JPMorgan Chase’s 2022 Form 10-K for additional information.

(e)Excluded 5,132 individuals associated with the First Republic acquisition who became employees effective July 2, 2023.

INTRODUCTION

The following is Management’s discussion and analysis of the financial condition and results of operations (“MD&A”) of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the second quarter of 2023.

This Quarterly Report on Form 10-Q for the second quarter of 2023 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). Refer to the Glossary of terms and acronyms and line of business metrics on pages 200–208 for definitions of terms and acronyms used throughout this Form 10-Q.

This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q and are subject to significant risks and uncertainties. Refer to Forward-looking Statements on page 95 of this Form 10-Q; Part I, Item 1A, Risk Factors on pages 9-32 of the 2022 Form 10-K; and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results will be in line with any outlook information set forth herein, and the Firm does not undertake to update any forward-looking statements.

JPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.9 trillion in assets and $312.5 billion in stockholders’ equity as of June 30, 2023. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers, predominantly in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally.

JPMorgan Chase’s principal bank subsidiary is JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank, N.A.”), a national banking association with U.S. branches in 48 states and Washington, D.C. JPMorgan Chase’s principal non-bank subsidiary is J.P. Morgan Securities LLC (“J.P. Morgan Securities”), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm’s principal operating subsidiaries outside the U.S. are J.P. Morgan Securities plc and J.P. Morgan SE (“JPMSE”), which are subsidiaries of JPMorgan Chase Bank, N.A. and are based in the United Kingdom (“U.K.”) and Germany, respectively.

For management reporting purposes, the Firm’s activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm’s consumer business segment is Consumer & Community Banking (“CCB”). The Firm’s wholesale business segments are the Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). Refer to Business Segment Results on pages 22-46 and Note 27 of this Form 10-Q, and Note 32 of JPMorgan Chase’s 2022 Form 10-K, for a description of the Firm’s business segments and the products and services they provide to their respective client bases. On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the “First Republic acquisition”) from the Federal Deposit Insurance Corporation (“FDIC”). Refer to Note 28 for additional information.

The Firm's website is www.jpmorganchase.com. JPMorgan Chase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. JPMorgan Chase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website is not incorporated by reference into this Form 10-Q or the Firm’s other filings with the SEC.

EXECUTIVE OVERVIEW

This executive overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of this Form 10-Q. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm, this Form 10-Q and the 2022 Form 10-K should be read together and in their entirety.


Financial performance of JPMorgan Chase
(unaudited) As of or for the period ended, (in millions, except per share data and ratios)	Three months ended June 30,							Six months ended June 30,
	2023			2022			Change	2023			2022			Change
Selected income statement data
Noninterest revenue	$	19,528		$	15,587		25%	$	37,166		$	32,432		15%
Net interest income	21,779			15,128			44	42,490			29,000			47
Total net revenue	41,307			30,715			34	79,656			61,432			30
Total noninterest expense	20,822			18,749			11	40,929			37,940			8
Pre-provision profit	20,485			11,966			71	38,727			23,492			65
Provision for credit losses	2,899			1,101			163	5,174			2,564			102
Net income	14,472			8,649			67	27,094			16,931			60
Diluted earnings per share	4.75			2.76			72	8.85			5.39			64
Selected ratios and metrics
Return on common equity	20		%	13		%		19		%	13		%
Return on tangible common equity	25			17				24			16
Book value per share	$	98.11		$	86.38		14	$	98.11		$	86.38		14
Tangible book value per share	79.90			69.53			15	79.90			69.53			15
Capital ratios(a)
CET1 capital	13.8		%	12.2		%		13.8		%	12.2		%
Tier 1 capital	15.4			14.1				15.4			14.1
Total capital	17.3			15.7				17.3			15.7
Memo:
NII excluding Markets(b)	$	22,370		$	13,682		63	$	43,306		$	25,434		70
NIR excluding Markets(b)	13,013			10,158			28	23,031			21,243			8
Markets(b)	7,018			7,790			(10)	15,400			16,543			(7)
Total net revenue - managed basis	$	42,401		$	31,630		34	$	81,737		$	63,220		29

(a)The ratios reflect the CECL capital transition provisions. Refer to Capital Risk Management on pages 48-53 of this Form 10-Q and pages 86-96 of JPMorgan Chase’s 2022 Form 10-K for additional information.

(b)NII and NIR refer to net interest income and noninterest revenue, respectively. Markets consists of CIB's Fixed Income Markets and Equity Markets businesses.

Comparisons noted in the sections below are for the second quarter of 2023 versus the second quarter of 2022, unless otherwise specified.

Firmwide overview

For the second quarter of 2023, JPMorgan Chase reported net income of $14.5 billion, up 67%, earnings per share of $4.75, ROE of 20% and ROTCE of 25%. The Firm's results for the second quarter of 2023 included an estimated bargain purchase gain of $2.7 billion in Corporate and a net addition to the allowance for credit losses of $1.2 billion associated with the First Republic acquisition. The Firm's results also included investment securities losses of $900 million in Treasury and CIO.

•Total net revenue was $41.3 billion, up 34%, reflecting:

–Net interest income of $21.8 billion, up 44%, driven by higher rates and, to a lesser extent, the impact of the First Republic acquisition, partially offset by lower Markets net interest income and lower average deposit

balances. Net interest income excluding Markets was $22.4 billion, up 63%.

–Noninterest revenue was $19.5 billion, up 25%, driven by the impact of the First Republic acquisition, higher Markets noninterest revenue and the absence of losses on equity investments in Payments in the prior year, partially offset by higher net investment securities losses in Treasury and CIO. The impact of the First Republic acquisition included a $2.7 billion estimated bargain purchase gain in Corporate.

–Total Markets revenue declined reflecting lower Markets NII, largely offset by higher NIR.

•Noninterest expense was $20.8 billion, up 11%, driven by higher compensation expense due to additional headcount and the impact of wage inflation, $599 million expense associated with the First Republic acquisition, higher technology and marketing investments and higher legal expense.

•The provision for credit losses was $2.9 billion, reflecting a $1.5 billion net addition to the allowance for credit losses and $1.4 billion of net charge-offs. The net addition to the allowance for credit losses included $1.2 billion to establish the allowance for the First Republic loans and lending-related commitments. The net addition also reflected:

–$233 million in consumer predominantly in Card Services, and

–$79 million in wholesale reflecting $389 million in CB, largely offset by a $243 million reduction in Corporate.

Net charge-offs increased $754 million, predominantly driven by CCB, primarily Card Services, as 30+ day delinquencies have returned to pre-pandemic levels.

The prior year included a $428 million net addition to the allowance for credit losses and net charge-offs of $657 million.

•The total allowance for credit losses was $24.3 billion at June 30, 2023. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.75%, compared with 1.69% in the prior year.

•The Firm’s nonperforming assets totaled $7.8 billion at June 30, 2023, relatively flat from the prior year, as lower consumer nonaccrual loans due to loan sales in the prior year were offset by higher wholesale nonaccrual loans, reflecting client-specific downgrades. Refer to Wholesale Credit Portfolio on pages 70-79 for additional information.

•Firmwide average loans of $1.2 trillion were up 13%, driven by higher loans in CCB and CB, largely as a result of the First Republic acquisition.

•Firmwide average deposits of $2.4 trillion were down 6%, driven by:

–the continued migration into higher-yielding investments in AWM; declines in CIB and CB primarily due to continued deposit attrition, which for CIB included actions to reduce certain deposits; and a net decline in CCB primarily from existing accounts due to increased customer spending,

partially offset by

–the impact of the First Republic acquisition in CCB, and an increase in Corporate related to the Firm's international consumer initiatives.

Refer to Liquidity Risk Management on pages 54-61 for additional information.

Selected capital and other metrics

•CET1 capital was $236 billion, and the Standardized and Advanced CET1 ratios were 13.8% and 13.9%, respectively.

•SLR was 5.8%.

•TBVPS grew 15%, ending the second quarter of 2023 at $79.90.

•As of June 30, 2023, the Firm had eligible end-of-period High Quality Liquid Assets (“HQLA”) of approximately $792 billion and unencumbered marketable securities with a fair value of approximately $620 billion, resulting in approximately $1.4 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 54-61 for additional information.

Refer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 10-15 and pages 16-19, respectively, for a further discussion of the Firm's results; and Business Segment Results on page 24 and Note 28 for additional information on the First Republic acquisition.

Pre-provision profit, ROTCE, TCE, TBVPS, NII and NIR excluding Markets, and total net revenue on a managed basis are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 20-21 for a further discussion of each of these measures.

Business segment highlights

Selected business metrics for each of the Firm’s four lines of business ("LOB") are presented below for the second quarter of 2023.


CCB ROE 38%						•Average deposits down 2%; client investment assets up 42% •Average loans up 19% year-over-year ("YoY") and 15% quarter-over-quarter ("QoQ"); Card Services net charge-off rate of 2.41% •Debit and credit card sales volume(a) up 7% •Active mobile customers(b) up 10%
CIB ROE 15%						•#1 ranking for Global Investment Banking fees with 8.4% wallet share year-to-date •Total Markets revenue of $7.0 billion, down 10%, with Fixed Income Markets down 3% and Equity Markets down 20%
CB ROE 16%						•Gross Investment Banking and Markets revenue of $767 million, down 3% •Average loans up 23% YoY and 14% QoQ; average deposits down 8%
AWM ROE 29%						•Assets under management ("AUM") of $3.2 trillion, up 16% •Average loans up 1% YoY and 4% QoQ; average deposits down 21%

(a)Excludes Commercial Card.

(b)Users of all mobile platforms who have logged in within the past 90 days. As of June 30, 2023, excludes the impact of the First Republic acquisition.

Refer to the Business Segment Results on pages 22-46 for a detailed discussion of results by business segment.

Credit provided and capital raised

JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital for wholesale and consumer clients during the first six months of 2023, consisting of:


$ 1.2 trillion						Total credit provided and capital raised (including loans and commitments)

$120 billion						Credit for consumers

$17 billion						Credit for U.S. small businesses

$520 billion						Credit for corporations

$535 billion						Capital raised for corporate clients and non-U.S. government entities

$24 billion						Credit and capital raised for nonprofit and U.S. government entities(a)

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

Recent events

•Basel III Finalization: In July 2023, the Federal Reserve, the Office of the Comptroller of the Currency ("OCC") and the FDIC released a proposal to amend the risk-based capital framework, entitled "Regulatory capital rule: Amendments applicable to large banking organizations and to banking organizations with significant trading activity". Under the proposal, changes would include replacement of the advanced approach with an expanded risk-based approach, which would not permit the use of internal models for the calculation of risk-weighted assets, other than for Market risk. In addition, the stress capital buffer requirement would be applicable to both the expanded risk-based approach and the standardized approach. The proposal would significantly revise risk-based capital requirements for all banks with assets of $100 billion or more, including the Firm and other U.S. global systemically important banks ("GSIBs"). The proposed effective date is July 1, 2025 with a three year transition period applicable to the expanded risk-based approach.

•GSIB Surcharge: In July 2023, the Federal Reserve also released a proposal to amend the calculation of the GSIB surcharge. If adopted as proposed, these amendments would require the Firm to assess its GSIB surcharge on an annual basis, using the average of the quarterly surcharge calculations throughout the calendar year, with daily averaging required for certain measures within the surcharge calculation. Surcharge increments would be reduced from 50bp to 10bp and there would also be other technical amendments to the Method 2 calculation. The proposed amendments would revise risk-based capital requirements for the Firm and other U.S. GSIBs, and would become effective on two calendar quarters after the adoption of the final rule.

Refer to Capital Risk Management on pages 48-53 for additional information.

Outlook

These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 95 of this Form 10-Q; Part I, Item 1A, Risk Factors on pages 9-32 of the 2022 Form 10-K; and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results in 2023 will be in line with the outlook information set forth below, and the Firm does not undertake to update any forward-looking statements.

JPMorgan Chase’s current outlook for full-year 2023 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these factors will affect the performance of the Firm. The Firm will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates.

In May 2023, the FDIC issued a notice of proposed rulemaking recommending a special assessment related to the systemic risk determination made on March 12, 2023, to recover losses to the Deposit Insurance Fund ("DIF") arising from the protection of uninsured depositors resulting from recent bank resolutions. In its current form, the rule would impose a special assessment at an annual rate of 12.5 basis points on certain banks’ estimated uninsured deposits reported as of December 31, 2022. If this rule is finalized as proposed, the Firm expects to recognize an estimated assessment expense of approximately $3 billion (pre-tax) in the quarter in which the rule is finalized, which is expected to occur in the second half of 2023.

Full-year 2023

•Management expects both net interest income and net interest income excluding Markets to be approximately $87 billion, market dependent.

•Management expects adjusted expense to be approximately $84.5 billion, market dependent and excluding any FDIC special assessment.

•Management expects the net charge-off rate in Card Services to be approximately 2.6%.

Net interest income excluding Markets and adjusted expense are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 20-21.

Business Developments

First Republic acquisition

On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the "First Republic acquisition") from the Federal Deposit Insurance Corporation (“FDIC”), as receiver, for $67.9 billion, resulting in an estimated bargain purchase gain of $2.7 billion recorded in other income. In connection with the First Republic acquisition, the Firm issued a five-year, $50 billion secured note to the FDIC (the "Purchase Money Note"), and entered into shared-loss agreements with the FDIC with respect to certain loans acquired and lending-related commitments assumed in the acquisition. Refer to Note 28 for additional information.

JPMorgan Chase’s Consolidated Financial Statements as of and for the period ended June 30, 2023 reflect the impact of the First Republic acquisition. Where meaningful to the disclosure, the impact of the First Republic acquisition is disclosed in various sections of this Form 10-Q. The Firm continues to convert certain operations, and to integrate clients, products and services, associated with the First Republic acquisition, to align with the Firm’s businesses and operations. The Firm also continues to evaluate to which segments certain clients, products and services associated with the First Republic acquisition, including deposits, should be allocated. Accordingly, reporting classifications and allocations may change in future periods, including across the Firm's segments.

Current market and economic conditions

Refer to Part I, Item 1A, Risk Factors on pages 9-32 of JPMorgan Chase's 2022 Form 10-K and Part II, Item 1A, Risk Factors on page 209 of this Form 10-Q for a discussion of material risk factors that could affect the Firm. These risk factors include potential impacts to the Firm associated with current market and economic conditions, including inflationary pressures, higher interest rates and geopolitical tensions (including secondary effects of the war in Ukraine), any or all of which could result in additional market disruption, government actions (including with respect to monetary policies), ongoing impacts to global supply chains, and other geopolitical risks.

Interbank Offered Rate (“IBOR”) transition

The publication of the remaining principal tenors of U.S. dollar LIBOR (i.e., overnight, one-month, three-month, six-month and 12-month LIBOR) ceased on June 30, 2023 (“LIBOR Cessation”). The one-month, three-month and six-month tenors of U.S. dollar LIBOR will continue to be published on a "synthetic" basis, which will allow market participants to use such rates for certain legacy LIBOR-linked contracts through September 30, 2024.

In the second quarter of 2023, the Firm successfully converted predominantly all of its cleared derivatives contracts linked to U.S. dollar LIBOR to the Secured Overnight Financing Rate (SOFR) as part of initiatives by the principal central counterparties (“CCPs”) to convert cleared derivatives prior to LIBOR Cessation. Nearly all of the Firm’s other U.S. dollar LIBOR-linked products that remained outstanding at LIBOR Cessation will be remediated through contractual fallback provisions or through the framework provided by the Adjustable Interest Rate (LIBOR) Act (“LIBOR Act”). The Firm continues its client outreach activities with respect to the limited amount of contracts that continue to reference “synthetic” U.S. dollar LIBOR in order to complete remediation by September 30, 2024.

Refer to Business Developments on page 50 of JPMorgan Chase's 2022 Form 10-K for additional information.

CONSOLIDATED RESULTS OF OPERATIONS

This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the three and six months ended June 30, 2023 and 2022, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment's results. Refer to pages 91-93 of this Form 10-Q and pages 149-152 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.


Revenue
	Three months ended June 30,						Six months ended June 30,
(in millions)	2023		2022		Change		2023		2022		Change
Investment banking fees	$	1,513	$	1,586	(5)	%	$	3,162	$	3,594	(12)	%
Principal transactions	6,910		4,990		38		14,525		10,095		44
Lending- and deposit-related fees	1,828		1,873		(2)		3,448		3,712		(7)
Asset management fees	3,774		3,517		7		7,239		7,169		1
Commissions and other fees	1,739		1,723		1		3,434		3,433		—

Investment securities losses	(900)		(153)		(488)		(1,768)		(547)		(223)
Mortgage fees and related income	278		378		(26)		499		838		(40)
Card income	1,094		1,133		(3)		2,328		2,108		10
Other income(a)(b)	3,292		540		NM		4,299		2,030		112
Noninterest revenue	19,528		15,587		25		37,166		32,432		15
Net interest income	21,779		15,128		44		42,490		29,000		47
Total net revenue	$	41,307	$	30,715	34	%	$	79,656	$	61,432	30	%

(a) Included operating lease income of $716 million and $945 million for the three months ended June 30, 2023 and 2022, respectively, and $1.5 billion and $2.0 billion for the six months ended June 30, 2023 and 2022, respectively, and an estimated bargain purchase gain of $2.7 billion associated with the First Republic acquisition in Corporate for the three and six months ended June 30, 2023. Refer to Business Segment Results on page 24, and Notes 6 and 28 for additional information.

(b) Includes losses on tax-oriented investments. Refer to Note 6 for additional information.

Quarterly results

Investment banking fees decreased in CIB, reflecting:

•lower advisory fees due to a lower level of announced deals in prior periods amid a challenging environment,

largely offset by

•higher equity underwriting fees primarily due to higher convertible securities offerings and, in the second half of the quarter, follow-on offerings that benefited from the lower equity market volatility.

Refer to CIB segment results on pages 30-36 and Note 6 for additional information.

Principal transactions revenue increased, reflecting:

•higher Equity Markets revenue in principal transactions, primarily in Prime Finance,

•higher Fixed Income Markets revenue in principal transactions, driven by Securitized Products and Fixed Income Financing, partially offset by lower revenue in Rates and Currencies & Emerging Markets,

–the increase in Markets principal transactions revenue was more than offset by a decline in Markets NII, primarily due to higher funding costs

•the absence of $337 million of markdowns in the prior year on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio in CIB and CB,

•a gain of $36 million in Credit Adjustments & Other in CIB, compared with a loss of $218 million in the prior year, and

•higher revenue related to cash deployment transactions in Treasury and CIO,

partially offset by

•net losses on certain legacy private equity investments in Corporate, compared with net gains in the prior year.

Principal transactions revenue in CIB generally has offsets across other revenue lines, including net interest income. The Firm assesses the performance of its Markets business on a total net revenue basis.

Refer to CIB, CB and Corporate segment results on pages 30-36, pages 37-40 and pages 45-46, respectively, and Note 6 for additional information.

Lending- and deposit-related fees decreased due to:

•lower cash management fees in CIB and CB associated with the higher level of credits earned by clients that reduce such fees,

largely offset by

•higher lending-related fees driven by the impact of the First Republic acquisition in AWM and CCB.

Refer to CIB, CB and AWM segment results on pages 30-36, pages 37-40 and pages 41-44, respectively, and Note 6 for additional information.

Asset management fees increased driven by:

•higher management fees on strong net inflows in AWM, and

•the impact of the First Republic acquisition in CCB.

Refer to CCB and AWM segment results on pages 25-29 and

pages 41-44, respectively, and Note 6 for additional information; and Business Segment Results on page 24 for additional information on the First Republic acquisition.

Investment securities losses reflected higher net losses on sales of U.S. Treasuries and U.S. GSE and government agency MBS, associated with repositioning the investment securities portfolio in Treasury and CIO. Refer to Corporate segment results on pages 45-46 and Note 10 for additional information.

Mortgage fees and related income decreased in Home Lending, reflecting lower production revenue due to a decline in volume, and lower net mortgage servicing revenue. Refer to CCB segment results on pages 25-29 and Notes 6 and 15 for additional information.

Card income decreased driven by:

•lower net interchange income as a result of an increase to the rewards liability due to adjustments to the terms of certain reward programs in CCB,

largely offset by

•higher payments-related revenue, reflecting growth in Commercial Card in CIB and CB.

Refer to CCB, CIB and CB segment results on pages 25-29, pages 30-36 and pages 37-40, respectively, Critical Accounting Estimates on pages 91-93, and Note 6 for additional information.

Other income increased, reflecting:

•the $2.7 billion estimated bargain purchase gain associated with the First Republic acquisition in Corporate,

•the absence of losses on equity investments in Payments in the prior year, and

•the impact of net investment hedges in Treasury and CIO,

partially offset by

•lower auto operating lease income in CCB due to a decline in volume, and

•the absence of a gain in the prior year on an equity-method investment received in partial satisfaction of a loan in CB.

Refer to Business Segment Results on page 24 and Note 28 for additional information on the First Republic acquisition; and Note 5 for additional information on net investment hedges.

Net interest income increased driven by higher rates and, to a lesser extent, the impact from the First Republic acquisition, partially offset by lower Markets net interest income and lower average deposit balances.

The Firm’s average interest-earning assets were $3.3 trillion, down $42 billion, and the yield was 5.01%, up 279 basis points (“bps”). The net yield on these assets, on an FTE basis, was 2.62%, an increase of 82 bps. The net yield excluding Markets was 3.83%, up 157 bps.

Refer to the Consolidated average balance sheets, interest and rates schedule on page 198 for further information; and Business Segment Results on page 24 and Note 28 for additional i

nformation on the First Republic acquisition.

Net yield excluding Markets is a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 20-21 for a further discussion of Net yield excluding Markets.

Year-to-date results

Investment banking fees decreased in CIB, reflecting:

•lower debt underwriting fees as challenging market conditions resulted in lower issuance activity in acquisition financing, and

•lower advisory fees due to a lower level of announced deals in prior periods amid a challenging environment,

partially offset by

•higher equity underwriting fees primarily due to higher convertible securities offerings and, in the second half of the second quarter, follow-on offerings that benefited from the lower equity market volatility.

Principal transactions revenue increased, reflecting:

•higher Fixed Income Markets net revenue in principal transactions, driven by Securitized Products and Fixed Income Financing, partially offset by lower revenue in Currencies & Emerging Markets and Rates,

•higher Equity Markets revenue in principal transactions, primarily in Prime Finance,

–the increase in Markets principal transactions revenue was more than offset by a decline in Markets NII, primarily due to higher funding costs

•losses of $117 million in Credit Adjustments & Other in CIB, driven by losses on certain components of fair value option elected liabilities, compared with losses of $742 million in the prior year, and

•higher revenue related to cash deployment transactions in Treasury and CIO.

Lending- and deposit-related fees decreased due to:

•lower cash management fees in CB and CIB associated with the higher level of credits earned by clients that reduce such fees,

partially offset by

•higher lending-related fees driven by the impact of the First Republic acquisition in AWM and CCB.

Asset management fees increased driven by the impact of the First Republic acquisition in CCB.

Asset management fees in AWM was relatively flat, as the decline in market levels was predominantly offset by the removal of most money market fund fee waivers and the impact of net inflows.

Commissions and other fees was relatively flat. Refer to CIB and AWM segment results on pages 30-36 and pages 41-44, respectively, and Note 6 for additional information.

Mortgage fees and related income decreased driven by

Home Lending, reflecting lower production revenue due to a decline in volume, and lower net mortgage servicing revenue due to lower net gains in MSR risk management.

Card income increased driven by higher payments-related revenue, reflecting growth in Commercial Card in CIB and CB.

Net interchange income in CCB was relatively flat as the benefit in partner payments in the first quarter of 2023 related to a periodic tax refund on airline miles redeemed was offset by an increase to the rewards liability due to adjustments to the terms of certain reward programs.

Other income increased, reflecting:

•the $2.7 billion estimated bargain purchase gain associated with the First Republic acquisition in Corporate,

•the impact of net investment hedges in Treasury and CIO, and

•a gain of $339 million recognized in first quarter of 2023 in AWM on the original minority interest in CIFM upon the Firm's acquisition of the remaining 51% interest in the entity,

partially offset by

•lower auto operating lease income in CCB due to a decline in volume,

•the absence of proceeds in the prior year from an insurance settlement,

•the absence of a gain in the prior year on an equity-method investment received in partial satisfaction of a loan in CB, and

•lower net gains related to certain other Corporate investments.

Net interest income increased driven by higher rates and, to a lesser extent, higher revolving balances in Card Services and the impact from the First Republic acquisition, partially offset by lower Markets net interest income and lower average deposit balances.

The Firm’s average interest-earning assets were $3.3 trillion, down $113 billion, and the yield was 4.85%, up 281 basis points (“bps”). The net yield on these assets, on an FTE basis, was 2.63%, an increase of 89 bps. The net yield excluding Markets was 3.82%, up 171 bps.


Provision for credit losses
	Three months ended June 30,						Six months ended June 30,
(in millions)	2023		2022		Change		2023		2022		Change
Consumer, excluding credit card	$	555	$	62	NM		$	803	$	235	242	%
Credit card	1,324		730		81	%	2,546		1,236		106
Total consumer	1,879		792		137		3,349		1,471		128
Wholesale	1,007		303		232		1,811		1,088		66
Investment securities	13		6		117		14		5		180
Total provision for credit losses	$	2,899	$	1,101	163	%	$	5,174	$	2,564	102	%

Quarterly results

The provision for credit losses was $2.9 billion, reflecting a $1.5 billion net addition to the allowance for credit losses and $1.4 billion of net charge-offs.

The net addition to the allowance for credit losses included $1.2 billion to establish the allowance for the First Republic loans and lending-related commitments, composed of $763 million in wholesale and $400 million in consumer.

The net addition also reflected:

•$233 million in consumer predominantly in Card Services, and

•$79 million in wholesale reflecting $389 million in CB, largely offset by a $243 million reduction in Corporate.

Net charge-offs increased $754 million, predominantly driven by CCB, primarily Card Services, as 30+ day delinquencies have returned to pre-pandemic levels.

The prior year included a $428 million net addition to the allowance for credit losses and net charge-offs of $657 million.

Refer to CCB segment results on pages 25-29, CIB on pages 30-36, CB on pages 37-40, AWM on pages 41-44, Corporate on pages 45-46; Allowance for Credit Losses on pages 80-82; Notes 10 and 13 for additional information on the credit portfolio and the allowance for credit losses; and Business segment results on page 24 for additional information on the First Republic acquisition.

Year-to-date results

The provision for credit losses was $5.2 billion, reflecting a $2.6 billion net addition to the allowance for credit losses and $2.5 billion of net charge-offs.

The net addition to the allowance for credit losses included $1.5 billion, consisting of:

•$800 million in wholesale, predominantly driven by net downgrade activity, updates to certain assumptions related to office real estate in CB in the second quarter of 2023, and the impact of the additional weight placed on the adverse scenarios in the first quarter of 2023, and

•$649 million in consumer, predominantly driven by Card Services, reflecting loan growth, the net effect of changes in the Firm's macroeconomic outlook, including the impact from the weighted average U.S. unemployment rate peaking in the third quarter of 2024, and the additional weight placed on the adverse scenarios in the first quarter of 2023, partially offset by reduced borrower uncertainty.

The net addition also included $1.2 billion to establish the allowance for the First Republic loans and lending-related commitments, in the second quarter of 2023.

Net charge-offs increased $1.3 billion, predominantly driven by CCB, primarily Card Services, as 30+ day delinquencies have returned to pre-pandemic levels.

The prior year included a $1.3 billion net addition to the allowance for credit losses and net charge-offs of $1.2 billion.


Noninterest expense
(in millions)	Three months ended June 30,						Six months ended June 30,
	2023		2022		Change		2023		2022		Change
Compensation expense	$	11,216	$	10,301	9	%	$	22,892	$	21,088	9	%
Noncompensation expense:
Occupancy	1,070		1,129		(5)		2,185		2,263		(3)
Technology, communications and equipment(a)	2,267		2,376		(5)		4,451		4,736		(6)
Professional and outside services	2,561		2,469		4		5,009		5,041		(1)
Marketing	1,122		881		27		2,167		1,801		20
Other expense(b)(c)	2,586		1,593		62		4,225		3,011		40
Total noncompensation expense	9,606		8,448		14		18,037		16,852		7
Total noninterest expense	$	20,822	$	18,749	11	%	$	40,929	$	37,940	8	%

(a)Includes depreciation expense associated with auto operating lease assets.

(b)Included Firmwide legal expense of $420 million and $73 million for the three months ended June 30, 2023 and 2022, respectively, and $596 million and $192 million for the six months ended June 30, 2023 and 2022, respectively; as well as FDIC-related expense of $338 million and $216 million for the three months ended June 30, 2023 and 2022, respectively, and $655 million and $414 million for the six months ended June 30, 2023 and 2022, respectively. Refer to Note 6 for additional information.

(c)Included expense associated with the First Republic acquisition of $599 million for the three and six months ended June 30, 2023. Refer to Business Segment Results on page 24 for additional information.

Quarterly results

Compensation expense increased driven by:

•additional headcount, primarily in technology and front office, as well as the impact of wage inflation, and

•higher revenue-related compensation in AWM, partially offset by a decline in revenue-related compensation in CIB.

Noncompensation expense increased as a result of:

•$599 million expense associated with the First Republic acquisition, substantially all of which is in Corporate,

•higher investments in the businesses, including marketing and technology,

•higher legal expense, largely in Corporate, and

•higher structural expense, including the impact of the increase in the FDIC assessment that was announced in October 2022,

partially offset by

•lower volume-related expense, reflecting lower depreciation expense on lower Auto lease assets.

Refer to Business Segment Results on page 24 for additional information on the First Republic acquisition.

Year-to-date results

Compensation expense increased driven by:

•additional headcount, primarily in technology and front office, as well as the impact of wage inflation, and

•higher revenue-related compensation in AWM, partially offset by a decline in revenue-related compensation in CIB.

Noncompensation expense increased as a result of:

•expense associated with the First Republic acquisition, substantially all of which is in Corporate,

•higher investments in the business, including marketing and technology,

•higher legal expense across the LOBs and Corporate, and

•higher structural expense, including the impact of the increase in the FDIC assessment that was announced in October 2022, and higher travel and entertainment expense,

partially offset by

•lower volume-related expense, reflecting lower depreciation expense on lower Auto lease assets.


Income tax expense
(in millions)	Three months ended June 30,								Six months ended June 30,
	2023			2022			Change		2023			2022			Change
Income before income tax expense	$	17,586		$	10,865		62	%	$	33,553		$	20,928		60	%
Income tax expense	3,114			2,216			41		6,459			3,997			62
Effective tax rate	17.7		%	20.4		%			19.3		%	19.1		%

Quarterly results

The effective tax rate decreased, reflecting:

•the impact of the income tax expense associated with the First Republic acquisition that was reflected in the estimated bargain purchase gain, which resulted in a reduction in the Firm’s effective tax rate of 3.4 percentage points,

partially offset by

•the higher level of pre-tax income and changes in the mix of income and expenses subject to U.S. federal and state and local taxes.

Year-to-date results

The effective tax rate was relatively flat, reflecting:

•the higher level of pre-tax income and changes in the mix of income and expenses subject to U.S. federal and state and local taxes, as well as the lower benefits related to vesting of employee stock based awards,

predominantly offset by

CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS

Consolidated balance sheets analysis

The following is a discussion of the significant changes between June 30, 2023, and December 31, 2022.


Selected Consolidated balance sheets data
(in millions)	June 30, 2023		December 31, 2022		Change
Assets
Cash and due from banks	$	26,064	$	27,697	(6)	%
Deposits with banks	469,059		539,537		(13)
Federal funds sold and securities purchased under resale agreements	325,628		315,592		3
Securities borrowed	163,563		185,369		(12)
Trading assets	636,996		453,799		40
Available-for-sale securities	203,262		205,857		(1)
Held-to-maturity securities	408,941		425,305		(4)
Investment securities, net of allowance for credit losses	612,203		631,162		(3)
Loans	1,300,069		1,135,647		14
Allowance for loan losses	(21,980)		(19,726)		(11)
Loans, net of allowance for loan losses	1,278,089		1,115,921		15
Accrued interest and accounts receivable	111,561		125,189		(11)
Premises and equipment	29,493		27,734		6
Goodwill, MSRs and other intangible assets	64,238		60,859		6
Other assets	151,346		182,884		(17)
Total assets	$	3,868,240	$	3,665,743	6	%

Cash and due from banks and deposits with banks decreased primarily as a result of the First Republic acquisition, which included the impact of the repayment of deposits provided to First Republic Bank in March 2023 by the consortium of large U.S. banks and amounts paid to the FDIC, as well as CIB Markets activities. Deposits with banks reflect the Firm’s placement of its excess cash with various central banks, including the Federal Reserve Banks.

Federal funds sold and securities purchased under resale agreements increased due to the impact of a lower level of netting on a reduced level of resale balances in Markets.

Securities borrowed decreased driven by Markets, reflecting lower client-driven activities and lower demand for securities to cover short positions.

Refer to Note 11 for additional information on securities purchased under resale agreements and securities borrowed.

Trading assets increased due to higher levels of debt and equity instruments in Markets, in response to demand from client-driven market-making activities, and when compared with the seasonally lower levels at year-end. Refer to Notes 2 and 5 for additional information.

Investment securities decreased due to:

•lower available-for-sale ("AFS") securities driven by paydowns, maturities and net sales, partially offset by $25.8 billion of securities associated with the First Republic acquisition as well as the transfer of securities from held-to-maturity in the first quarter of 2023 (“HTM”), and

•lower HTM securities driven by paydowns, maturities and the transfer of securities to AFS.

Refer to Corporate segment results on pages 45-46,

Investment Portfolio Risk Management on page 83, and Notes 2 and 10 for additional information.

Loans increased, reflecting:

•$150 billion of loans associated with the First Republic acquisition, primarily reflected in CCB, CB and AWM.

The increase also included:

•growth in new accounts and revolving balances which continued to normalize to pre-pandemic levels in Card Services, and

•higher revolver utilization and originations in CB,

partially offset by

•lower securities-based lending in AWM.

The allowance for loan losses increased, reflecting:

•a net addition to the allowance for loan losses of $1.8 billion, consisting of:

–$1.1 billion in wholesale, predominantly driven by net downgrade activity, updates to certain assumptions related to office real estate in CB in the second quarter of 2023, and the impact of the additional weight placed on the adverse scenarios in the first quarter of 2023, and

–$620 million in consumer, predominantly driven by Card Services, reflecting loan growth, the net effect of changes in the Firm's macroeconomic outlook, including the impact from the weighted average U.S. unemployment rate peaking in the third quarter of 2024, and the additional weight placed on the adverse scenarios in the first quarter of 2023, partially offset by reduced borrower uncertainty, and

•$1.1 billion to establish the allowance for the First Republic loans in the second quarter of 2023.

The allowance for loan losses also reflected a reduction of $587 million, on January 1, 2023, as a result of the adoption of the Financial Instruments - Credit Losses: Troubled Debt Restructurings accounting guidance. References in this Form 10-Q to "changes to the TDR accounting guidance" pertain to the Firm's adoption of this guidance.

There was also a $196 million net reduction in the allowance for lending-related commitments recognized in other liabilities on the Consolidated balance sheets, which included a $97 million addition to establish the allowance for the First Republic lending-related commitments.

Refer to Credit and Investment Risk Management on pages 62-83, and Notes 2, 3, 12 and 13 for additional information on loans and the total allowance for credit losses; and Business Segment Results on page 24 and Note 28 for additional information on the First Republic acquisition.

Accrued interest and accounts receivable decreased primarily due to lower client receivables related to client-driven activities in Markets.

Premises and equipment increased as a result of the First Republic acquisition, largely lease right-of-use assets, and the construction-in-process associated with the Firm's headquarters. Refer to Note 17 for information on leases.

Goodwill, MSRs and other intangible assets increased predominantly due to the other intangibles and goodwill related to the Firm's acquisition of the remaining 51% interest in CIFM, and the core deposit intangibles associated with the First Republic acquisition. Refer to Note 15 and 28 for additional information.

Other assets decreased reflecting lower cash collateral placed with central counterparties ("CCPs").


Selected Consolidated balance sheets data (continued)
(in millions)	June 30, 2023		December 31, 2022		Change
Liabilities
Deposits	$	2,398,962	$	2,340,179	3	%
Federal funds purchased and securities loaned or sold under repurchase agreements	266,272		202,613		31
Short-term borrowings	41,022		44,027		(7)
Trading liabilities	178,809		177,976		—
Accounts payable and other liabilities	286,934		300,141		(4)
Beneficial interests issued by consolidated variable interest entities (“VIEs”)	19,647		12,610		56
Long-term debt	364,078		295,865		23
Total liabilities	3,555,724		3,373,411		5
Stockholders’ equity	312,516		292,332		7
Total liabilities and stockholders’ equity	$	3,868,240	$	3,665,743	6	%

Deposits increased, reflecting:

•increases in CIB due to deposit inflows related to client-driven activities and net issuances of structured notes as a result of client demand,

•$68 billion of deposits in CCB associated with the First Republic acquisition, partially offset by a net decline primarily in existing accounts due to increased customer spending, and

•an increase in Corporate related to the Firm's international consumer initiatives,

partially offset by

•the continued migration into higher-yielding investments in AWM as a result of the rising interest rate environment, and

•ongoing attrition in CB driven by higher rates and seasonal outflows, predominantly offset by inflows as a result of disruptions in the market in the first quarter of 2023.

Federal funds purchased and securities loaned or sold under repurchase agreements increased due to higher secured financing of trading assets and the impact of a lower level of netting on client-driven market-making activities in Markets.

Short-term borrowings decreased predominantly as a result of lower financing requirements in Markets, partially offset by short-term FHLB advances associated with the First Republic acquisition in Treasury and CIO.

Refer to Liquidity Risk Management on pages 54-61 for additional information on deposits, federal funds purchased and securities loaned or sold under repurchase agreements, and short-term borrowings; Notes 2 and 16 for deposits and Note 11 for federal funds purchased and securities loaned or sold under repurchase agreements; Business Segment Results on page 24 and Note 28 for additional information on the First Republic acquisition.

Trading liabilities: refer to Notes 2 and 5 for additional information.

Accounts payable and other liabilities decreased primarily due to lower client payables related to client-driven activities in Markets.

Beneficial interests issued by consolidated VIEs increased driven by higher levels of Firm-administered multi-seller conduit commercial paper held by third parties, reflecting changes in the Firm’s short-term liquidity management, and an increase in loans in the conduits in CIB. Refer to Liquidity Risk Management on pages 54-61 and Notes 14 and 24 for additional information, specifically Firm-sponsored VIEs and loan securitization trusts.

Long-term debt increased, reflecting the impact of the First Republic acquisition, which included the Purchase Money Note issued to the FDIC, and $25 billion of FHLB advances, partially offset by maturities and redemptions in Treasury and CIO. Refer to Liquidity Risk Management on pages 54-61; and Note 28 for additional information on the First Republic acquisition.

Stockholders’ equity: refer to Consolidated statements of changes in stockholders’ equity on page 99, Capital Actions on page 52, and Note 21 for additional information.

Consolidated cash flows analysis

The following is a discussion of cash flow activities during the six months ended June 30, 2023 and 2022.


(in millions)	Six months ended June 30,
		2023		2022
Net cash provided by/(used in)
Operating activities		$	(92,376)	$	24,101
Investing activities		5,551		(125,811)
Financing activities		14,642		48,970
Effect of exchange rate changes on cash		72		(18,834)
Net increase/(decrease) in cash and due from banks and deposits with banks		$	(72,111)	$	(71,574)

Operating activities

•In 2023, cash used resulted from higher trading assets and lower accounts payable, partially offset by lower other assets, securities borrowed and accrued interest and accounts receivable.

•In 2022, cash provided reflected higher accounts payable and other liabilities, trading liabilities, and net proceeds from loans held-for-sale, predominantly offset by higher trading assets and accrued interest and accounts receivable.

Investing activities

•In 2023, cash provided reflected net proceeds from investment securities, largely offset by higher net originations of loans, higher securities purchased under resale agreements, and net cash used in the First Republic acquisition.

•In 2022, cash used resulted from higher securities purchased under resale agreements, net originations of loans, and net purchases of investment securities.

Financing activities

•In 2023, cash provided reflected higher securities loaned or sold under repurchase agreements, largely offset by net activity in deposits, which included the impact of the repayment of the deposits provided to First Republic Bank by the consortium of large U.S. banks that the Firm assumed as part of the First Republic acquisition, as well as net payments on long- and short-term borrowings.

•In 2022, cash provided reflected higher securities loaned or sold under repurchase agreements and net proceeds from long- and short-term borrowings.

•For both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock.

* * *

Refer to Consolidated Balance Sheets Analysis on pages 16-19, Capital Risk Management on pages 48-53, and Liquidity Risk Management on pages 54-61, and the Consolidated Statements of Cash Flows on page 100 of this Form 10-Q, and pages 97-104 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of the activities affecting the Firm’s cash flows.


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

The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP and this presentation is referred to as “reported” basis; these financial statements appear on pages 96-100.

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

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

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

•Net interest income, net yield, and noninterest revenue excluding Markets;

•TCE, ROTCE, and TBVPS;

•Adjusted expense, which represents noninterest expense excluding Firmwide legal expense; and

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

Refer to Explanation and Reconciliation of the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages 58-60 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of management’s use of non-GAAP financial measures.

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


	Three months ended June 30,
	2023								2022
(in millions, except ratios)	Reported			Fully taxable-equivalent adjustments(a)		Managed basis			Reported			Fully taxable-equivalent adjustments(a)		Managed basis
Other income	$	3,292		$	990	$	4,282		$	540		$	812	$	1,352
Total noninterest revenue	19,528			990		20,518			15,587			812		16,399
Net interest income	21,779			104		21,883			15,128			103		15,231
Total net revenue	41,307			1,094		42,401			30,715			915		31,630
Total noninterest expense	20,822			NA		20,822			18,749			NA		18,749
Pre-provision profit	20,485			1,094		21,579			11,966			915		12,881
Provision for credit losses	2,899			NA		2,899			1,101			NA		1,101
Income before income tax expense	17,586			1,094		18,680			10,865			915		11,780
Income tax expense	3,114			1,094		4,208			2,216			915		3,131
Net income	$	14,472		NA		$	14,472		$	8,649		NA		$	8,649

Overhead ratio	50		%	NM		49		%	61		%	NM		59		%

	Six months ended June 30,
	2023								2022
(in millions, except ratios)	Reported			Fully taxable-equivalent adjustments(a)		Managed basis			Reported			Fully taxable-equivalent adjustments(a)		Managed basis
Other income	$	4,299		$	1,857	$	6,156		$	2,030		$	1,587	$	3,617
Total noninterest revenue	37,166			1,857		39,023			32,432			1,587		34,019
Net interest income	42,490			224		42,714			29,000			201		29,201
Total net revenue	79,656			2,081		81,737			61,432			1,788		63,220
Total noninterest expense	40,929			NA		40,929			37,940			NA		37,940
Pre-provision profit	38,727			2,081		40,808			23,492			1,788		25,280
Provision for credit losses	5,174			NA		5,174			2,564			NA		2,564
Income before income tax expense	33,553			2,081		35,634			20,928			1,788		22,716
Income tax expense	6,459			2,081		8,540			3,997			1,788		5,785
Net Income	$	27,094		NA		$	27,094		$	16,931		NA		$	16,931

Overhead ratio	51		%	NM		50		%	62		%	NM		60		%

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

The following table provides information on net interest income, net yield, and noninterest revenue excluding Markets.



(in millions, except rates)	Three months ended June 30,								Six months ended June 30,
	2023			2022			Change		2023			2022			Change
Net interest income – reported	$	21,779		$	15,128		44	%	$	42,490		$	29,000		47	%
Fully taxable-equivalent adjustments	104			103			1		224			201			11
Net interest income – managed basis(a)	$	21,883		$	15,231		44		$	42,714		$	29,201		46
Less: Markets net interest income(b)	(487)			1,549			NM		(592)			3,767			NM
Net interest income excluding Markets(a)	$	22,370		$	13,682		63		$	43,306		$	25,434		70

Average interest-earning assets	$	3,343,780		$	3,385,894		(1)		$	3,280,619		$	3,393,879		(3)
Less: Average Markets interest-earning assets(b)	1,003,877			957,304			5		993,283			960,556			3
Average interest-earning assets excluding Markets	$	2,339,903		$	2,428,590		(4)	%	$	2,287,336		$	2,433,323		(6)	%
Net yield on average interest-earning assets – managed basis	2.62		%	1.80		%			2.63		%	1.74		%
Net yield on average Markets interest-earning assets(b)	(0.19)			0.65					(0.12)			0.79
Net yield on average interest-earning assets excluding Markets	3.83		%	2.26		%			3.82		%	2.11		%


Noninterest revenue – reported	$	19,528	$	15,587	25	%	$	37,166	$	32,432	15	%
Fully taxable-equivalent adjustments	990		812		22		1,857		1,587		17
Noninterest revenue – managed basis	$	20,518	$	16,399	25		$	39,023	$	34,019	15
Less: Markets noninterest revenue(b)	7,505		6,241		20		15,992		12,776		25
Noninterest revenue excluding Markets	$	13,013	$	10,158	28		$	23,031	$	21,243	8

Memo: Total Markets net revenue(b)	$	7,018	$	7,790	(10)		$	15,400	$	16,543	(7)

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

(b)Refer to page 35 for further information on Markets.

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



	Period-end				Average
(in millions, except per share and ratio data)	Jun 30, 2023		Dec 31, 2022		Three months ended June 30,						Six months ended June 30,
					2023			2022			2023			2022
Common stockholders’ equity	$	285,112	$	264,928	$	277,885		$	247,986		$	274,560		$	250,234
Less: Goodwill	52,380		51,662		52,342			50,575			52,031			50,442
Less: Other intangible assets	3,629		1,224		2,191			1,119			1,746			1,007
Add: Certain deferred tax liabilities(a)	3,097		2,510		2,902			2,503			2,727			2,500
Tangible common equity	$	232,200	$	214,552	$	226,254		$	198,795		$	223,510		$	201,285

Return on tangible common equity	NA		NA		25		%	17		%	24		%	16		%
Tangible book value per share	$	79.90	$	73.12	NA			NA			NA			NA

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

BUSINESS SEGMENT RESULTS

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

The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by the Firm’s Operating Committee. Segment results are presented on a managed basis. Refer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures on pages 20-21 for a definition of managed basis.

Description of business segment reporting methodology

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

Revenue sharing

When business segments join efforts to sell products and services to the Firm’s clients and customers, the participating business segments may agree to share revenue from those transactions. Revenue is generally recognized in the segment responsible for the related product or service, with allocations to the other segment(s) involved in the transaction. The segment results reflect these revenue-sharing agreements.

Funds transfer pricing

Funds transfer pricing (“FTP”) is the process by which the Firm allocates interest income and expense to the LOBs and Other Corporate and transfers the primary interest rate risk and liquidity risk to Treasury and CIO.

The funds transfer pricing process considers the interest rate risk and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically the methodology and assumptions utilized in the FTP process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the segments.

Foreign exchange risk

Foreign exchange risk is transferred from the LOBs and Other Corporate to Treasury and CIO for certain revenues and expenses. Treasury and CIO manages these risks centrally and reports the impact of foreign exchange rate movements related to the transferred risk in its results. Refer to Market Risk Management on pages 84-89 for additional information.

Capital allocation

The amount of capital assigned to each business segment is referred to as equity. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs may change. As of June 30, 2023, the Firm updated its line of business capital allocations to reflect the impact of the First Republic acquisition. Refer to Line of business equity on page 51, and page 93 of JPMorgan Chase’s 2022 Form 10-K for additional information on capital allocation.

Refer to Business Segment Results – Description of business segment reporting methodology on pages 61-62 and Note 32 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of those methodologies.

Segment results – managed basis

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


Three months ended June 30,	Consumer & Community Banking									Corporate & Investment Bank								Commercial Banking
(in millions, except ratios)	2023			2022				Change		2023			2022				Change	2023			2022			Change
Total net revenue	$	17,233		$	12,558		(a)	37	%	$	12,519		$	12,003		(a)	4%	$	3,988		$	2,683		49	%
Total noninterest expense	8,313			7,658			(a)	9		6,894			6,810			(a)	1	1,300			1,156			12
Pre-provision profit/(loss)	8,920			4,900				82		5,625			5,193				8	2,688			1,527			76
Provision for credit losses	1,862			761				145		38			59				(36)	1,097			209			425
Net income/(loss)	5,306			3,108			(a)	71		4,092			3,717			(a)	10	1,208			994			22
Return on equity (“ROE”)	38		%	24		%				15		%	14		%			16		%	15		%


Three months ended June 30,	Asset & Wealth Management								Corporate					Total
(in millions, except ratios)	2023			2022			Change		2023		2022		Change	2023			2022			Change
Total net revenue	$	4,943		$	4,306		15	%	$	3,718	$	80	NM	$	42,401		$	31,630		34	%
Total noninterest expense	3,163			2,919			8		1,152		206		459	20,822			18,749			11
Pre-provision profit/(loss)	1,780			1,387			28		2,566		(126)		NM	21,579			12,881			68
Provision for credit losses	145			44			230		(243)		28		NM	2,899			1,101			163
Net income/(loss)	1,226			1,004			22		2,640		(174)		NM	14,472			8,649			67
ROE	29		%	23		%			NM		NM			20		%	13		%


Six months ended June 30,	Consumer & Community Banking									Corporate & Investment Bank								Commercial Banking
(in millions, except ratios)	2023			2022				Change		2023			2022				Change	2023			2022			Change
Total net revenue	$	33,689		$	24,740		(a)	36	%	$	26,119		$	25,579		(a)	2%	$	7,499		$	5,081		48	%
Total noninterest expense	16,378			15,313			(a)	7		14,377			14,173			(a)	1	2,608			2,285			14
Pre-provision profit/(loss)	17,311			9,427				84		11,742			11,406				3	4,891			2,796			75
Provision for credit losses	3,264			1,439				127		96			504				(81)	1,514			366			314
Net income/(loss)	10,549			6,016			(a)	75		8,513			8,089			(a)	5	2,555			1,844			39
ROE	39		%	23		%				15		%	15		%			17		%	14		%


Six months ended June 30,	Asset & Wealth Management								Corporate					Total
(in millions, except ratios)	2023			2022			Change		2023		2022		Change	2023			2022			Change
Total net revenue	$	9,727		$	8,621		13	%	$	4,703	$	(801)	NM	$	81,737		$	63,220		29	%
Total noninterest expense	6,254			5,779			8		1,312		390		236	40,929			37,940			8
Pre-provision profit/(loss)	3,473			2,842			22		3,391		(1,191)		NM	40,808			25,280			61
Provision for credit losses	173			198			(13)		127		57		123	5,174			2,564			102
Net income/(loss)	2,593			2,012			29		2,884		(1,030)		NM	27,094			16,931			60
ROE	31		%	23		%			NM		NM			19		%	13		%

(a)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three and six months ended June 30, 2023 versus the corresponding period in the prior year, unless otherwise specified.

Selected Firmwide Metrics

The following tables present key metrics for Wealth Management, which consists of the Global Private Bank in AWM and J.P. Morgan Wealth Management in CCB; and total revenue and key metrics for J.P. Morgan Payments, which consists of payments activities in CIB and CB. This presentation is intended to provide investors with additional information concerning Wealth Management and J.P. Morgan Payments, each of which consists of similar business activities conducted across LOBs to serve different types of clients and customers.

Selected metrics - Wealth Management


	June 30, 2023			June 30, 2022
Client assets (in billions)(a)	$	2,862	(b)	$	2,177
Number of client advisors	8,367			7,756

(a) Consists of Global Private Bank in AWM and client investment assets in J.P. Morgan Wealth Management in CCB.

(b)As of June 30, 2023, included $150.9 billion of client investment assets associated with the First Republic acquisition.

Selected metrics - J.P. Morgan Payments


(in millions, except where otherwise noted)	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Total net revenue(a)	$	4,729	$	3,130	$	9,187	$	5,725
Merchant processing volume (in billions)	600.1		539.6		1,158.9		1,029.8
Average deposits (in billions)	720		816		714		819

(a) Excludes the net impact of equity investments.

Segment information related to the First Republic acquisition

The following table presents selected impacts to CCB, CB, AWM and Corporate associated with the First Republic acquisition.


	As of or for the three and six months ended June 30, 2023
(in millions)	Consumer & Community Banking		Commercial Banking		Asset & Wealth Management		Corporate			Total
Selected Income Statement Data
Revenue
Asset management fees	$	107	$	—	$	—	$	—		$	107
All other income	105		—		174		2,762		(a)	3,041
Noninterest revenue	212		—		174		2,762			3,148
Net interest income	619		178		129		(29)			897
Total net revenue	831		178		303		2,733			4,045

Provision for credit losses	408		608		146		—			1,162
Noninterest expense	37		—		—		562			599
Net income	293		(327)		119		2,301			2,386

Selected Balance Sheet Data (period-end)
Loans	$	94,721	$	39,500	$	13,696	$	—		$	147,917	(b)
Deposits	68,351		—		—		—			68,351

(a)Reflects the estimated bargain purchase gain of $2.7 billion recorded in other income. Refer to Note 28 for additional information.

(b)Excluded $1.9 billion of loans transferred to the CIB.

The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three and six months ended June 30, 2023 and 2022.

CONSUMER & COMMUNITY BANKING

Refer to pages 63-66 of JPMorgan Chase's 2022 Form 10-K and Line of Business Metrics on page 206 for a further discussion of the business profile of CCB.


Selected income statement data
	Three months ended June 30,										Six months ended June 30,
(in millions, except ratios)	2023				2022				Change		2023				2022				Change
Revenue
Lending- and deposit-related fees	$	841			$	855			(2)	%	$	1,664			$	1,660			—	%
Asset management fees	816			(d)	684				19		1,492			(d)	1,410				6
Mortgage fees and related income	274				377				(27)		497				833				(40)
Card income	483				621			(f)	(22)		1,222				1,162			(f)	5
All other income(a)	1,129			(d)	1,313			(f)	(14)		2,291			(d)	2,640			(f)	(13)
Noninterest revenue	3,543				3,850				(8)		7,166				7,705				(7)
Net interest income	13,690			(d)	8,708				57		26,523			(d)	17,035				56
Total net revenue	17,233				12,558				37		33,689				24,740				36

Provision for credit losses	1,862			(d)	761				145		3,264			(d)	1,439				127

Noninterest expense
Compensation expense	3,628				3,237				12		7,173				6,408				12
Noncompensation expense(b)	4,685			(d)	4,421			(f)	6		9,205			(d)	8,905			(f)	3
Total noninterest expense	8,313				7,658				9		16,378				15,313				7
Income before income tax expense	7,058				4,139				71		14,047				7,988				76
Income tax expense	1,752				1,031			(f)	70		3,498				1,972			(f)	77
Net income	$	5,306			$	3,108			71		$	10,549			$	6,016			75

Revenue by line of business
Banking & Wealth Management	$	10,936		(e)	$	6,502		(f)	68		$	20,977		(e)	$	12,517		(f)	68
Home Lending	1,007			(e)	1,001				1		1,727			(e)	2,170				(20)
Card Services & Auto	5,290				5,055				5		10,985				10,053				9

Mortgage fees and related income details:
Production revenue	102				150				(32)		177				361				(51)
Net mortgage servicing revenue(c)	172				227				(24)		320				472				(32)
Mortgage fees and related income	$	274			$	377			(27)	%	$	497			$	833			(40)	%

Financial ratios
Return on equity	38		%		24		%				39		%		23		%
Overhead ratio	48				61						49				62

(a)Primarily includes operating lease income and commissions and other fees. For the three months ended June 30, 2023 and 2022, operating lease income was $704 million and $929 million, respectively, and $1.4 billion and $2.0 billion for the six months ended June 30, 2023 and 2022, respectively.

(b)Included depreciation expense on leased assets of $445 million and $652 million for the three months ended June 30, 2023 and 2022, respectively, and $852 million and $1.3 billion for the six months ended June 30, 2023 and 2022, respectively.

(c)Included MSR risk management results of $25 million and $28 million for the three months ended June 30, 2023 and 2022, respectively, and $13 million and $137 million for the six months ended June 30, 2023 and 2022, respectively.

(d)Includes the impact of the First Republic acquisition. Refer to page 24 for additional information.

(e)For the three and six months ended June 30, 2023, included $596 million and $235 million for Banking & Wealth Management and Home Lending, respectively, associated with the First Republic acquisition.

(f)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

Quarterly results

Net income was $5.3 billion, up 71%.

Net revenue was $17.2 billion, an increase of 37%.

Net interest income was $13.7 billion, up 57%, driven by:

•deposit margin expansion on higher rates in Banking & Wealth Management ("BWM"), and

•higher NII in Card Services driven by increased revolving balances.

Noninterest revenue was $3.5 billion, down 8%, driven by:

•lower auto operating lease income as a result of a decline in volume, and

•a decrease in card income driven by lower net interchange, as a result of an increase to the rewards liability due to adjustments to certain reward program terms,

partially offset by

•higher asset management fees in BWM predominantly driven by the impact of the First Republic acquisition.

Refer to Note 6 for additional information on card income, asset management fees, and commissions and other fees; and Critical Accounting Estimates on pages 91-93 for card income.

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

Noninterest expense was $8.3 billion, up 9%, driven by:

•higher compensation expense, including wage inflation and headcount growth, as well as higher marketing and technology,

partially offset by

•lower auto lease depreciation on lower auto lease assets.

The provision for credit losses was $1.9 billion, and included:

•net charge-offs of $1.3 billion, up $640 million, predominantly driven by Card Services, as 30+ day delinquencies have returned to pre-pandemic levels, and

•a $611 million net addition to the allowance for credit losses, reflecting $408 million to establish the allowance for the First Republic loans and lending-related commitments. The net addition also included $203 million driven by Card Services, reflecting loan growth, and the net effect of changes in the Firm's macroeconomic outlook, including the impact from the weighted average U.S. unemployment rate peaking in the third quarter of 2024, largely offset by reduced borrower uncertainty.

The prior year included a $150 million addition to the allowance for credit losses in Card Services.

Refer to Credit and Investment Risk Management on pages 62-83 and Allowance for Credit Losses on pages 80-82 for a further discussion of the credit portfolios and the allowance for credit losses.

Year-to-date results

Net income was $10.5 billion, up 75%.

Net revenue was $33.7 billion, an increase of 36%.

Net interest income was $26.5 billion, up 56%, driven by:

•deposit margin expansion on higher rates, partially offset by lower average deposits in BWM, and

•higher NII in Card Services driven by increased revolving balances,

partially offset by

•the impact of lower PPP loan forgiveness in BWM.

Noninterest revenue was $7.2 billion, down 7%, driven by:

•lower auto operating lease income as a result of a decline in volume and

•in Home Lending, lower production revenue from a decline in volume and lower net mortgage servicing revenue predominantly driven by lower net gains on MSR risk management,

partially offset by

•higher travel-related commissions in Card Services,

•higher asset management fees in BWM driven by the impact of the First Republic acquisition.

Card income was relatively flat as the increase in net interchange in the first quarter of 2023 due to a reduction in rewards costs and partner payments related to a periodic tax refund on airline miles redeemed was offset by an increase to the rewards liability due to adjustments to certain reward program terms in the second quarter of 2023.

Noninterest expense was $16.4 billion, up 7%, driven by:

•higher compensation expense, including wage inflation and headcount growth, as well as higher marketing and technology,

partially offset by

•lower auto lease depreciation on lower auto lease assets.

The provision for credit losses was $3.3 billion, and included:

•net charge-offs of $2.3 billion, up $1.1 billion, predominantly driven by Card Services, as 30+ day delinquencies have returned to pre-pandemic levels, and

•a $553 million net addition, predominantly driven by Card Services, reflecting loan growth, the net effect of changes in the Firm's macroeconomic outlook, including the impact from the weighted average U.S. unemployment rate peaking in the third quarter of 2024, and the additional weight placed on the adverse scenarios in the first quarter of 2023, partially offset by reduced borrower uncertainty, and

•a $408 million net addition to the allowance for credit losses to establish the allowance for the First Republic loans and lending-related commitments, in the second quarter of 2023.

The prior year included a $275 million addition to the allowance for credit losses in Card Services and Home Lending.


Selected metrics
	As of or for the three months ended June 30,							As of or for the six months ended June 30,
(in millions, except headcount)	2023			2022		Change		2023			2022		Change
Selected balance sheet data (period-end)
Total assets	$	620,193		$	500,219	24	%	$	620,193		$	500,219	24	%
Loans:
Banking & Wealth Management(a)	30,959		(d)	31,494		(2)		30,959		(d)	31,494		(2)
Home Lending(b)	262,432		(d)	176,939		48		262,432		(d)	176,939		48
Card Services	191,353			165,494		16		191,353			165,494		16
Auto	73,587			67,842		8		73,587			67,842		8
Total loans	558,331			441,769		26		558,331			441,769		26
Deposits	1,173,514		(e)	1,178,825		—		1,173,514		(e)	1,178,825		—
Equity	55,500			50,000		11		55,500			50,000		11
Selected balance sheet data (average)
Total assets	$	576,417		$	496,177	16		$	541,788		$	492,592	10
Loans:
Banking & Wealth Management	30,628		(f)	32,294		(5)		29,572		(f)	33,014		(10)
Home Lending(c)	229,569		(f)	177,330		29		201,005		(f)	176,911		14
Card Services	187,028			158,434		18		183,758			153,941		19
Auto	71,083			68,569		4		69,920			68,908		1
Total loans	518,308			436,627		19		484,255			432,774		12
Deposits	1,157,309		(g)	1,180,453		(2)		1,135,261		(g)	1,167,057		(3)
Equity	54,346			50,000		9		53,180			50,000		6

Headcount	137,087			130,907		5	%	137,087			130,907		5	%

(a)At June 30, 2023 and 2022, included $163 million and $1.5 billion of loans, respectively, in Business Banking under the PPP. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.

(b)At June 30, 2023 and 2022, Home Lending loans held-for-sale and loans at fair value were $3.9 billion and $5.2 billion, respectively.

(c)Average Home Lending loans held-for sale and loans at fair value were $5.3 billion and $8.1 billion for the three months ended June 30, 2023 and 2022, respectively, and $4.4 billion and $9.5 billion for the six months ended June 30, 2023 and 2022, respectively.

(d)As of June 30, 2023, included $3.4 billion and $91.3 billion for Banking & Wealth Management and Home Lending, respectively, associated with the First Republic acquisition.

(e)Includes the impact of the First Republic acquisition. Refer to page 24 for additional information.

(f)For the three months ended June 30, 2023, included $2.7 billion and $57.2 billion for Banking & Wealth Management and Home Lending, respectively, and for the six months ended June 30, 2023, included $1.4 billion and $28.7 billion for Banking & Wealth Management and Home Lending, respectively, associated with the First Republic acquisition.

(g)For the three and six months ended June 30, 2023, included $47.2 billion and $23.7 billion, respectively, associated with the First Republic acquisition.


Selected metrics
	As of or for the three months ended June 30,								As of or for the six months ended June 30,
(in millions, except ratio data)	2023			2022			Change		2023			2022			Change
Credit data and quality statistics
Nonaccrual loans(a)(b)	$	3,823		$	4,217		(9)	%	$	3,823		$	4,217		(9)	%
Net charge-offs/(recoveries)
Banking & Wealth Management	92			81			14		171			170			1
Home Lending	(28)			(68)			59		(46)			(137)			66
Card Services	1,124			580			94		2,046			1,086			88
Auto	63			18			250		132			45			193
Total net charge-offs/(recoveries)	$	1,251		$	611		105		$	2,303		$	1,164		98

Net charge-off/(recovery) rate
Banking & Wealth Management(c)	1.20		%	1.01		%			1.17		%	1.04		%
Home Lending	(0.05)			(0.16)					(0.05)			(0.16)
Card Services	2.41			1.47					2.25			1.42
Auto	0.36			0.11					0.38			0.13
Total net charge-off/(recovery) rate	0.98		%	0.57		%			0.97		%	0.55		%

30+ day delinquency rate
Home Lending(d)(e)	0.58		%	0.85		%			0.58		%	0.85		%
Card Services	1.70			1.05					1.70			1.05
Auto	0.92			0.69					0.92			0.69

90+ day delinquency rate - Card Services	0.84		%	0.51		%			0.84		%	0.51		%

Allowance for loan losses
Banking & Wealth Management	$	731		$	697		5		$	731		$	697		5
Home Lending	777		(f)	785			(1)		777		(f)	785			(1)
Card Services	11,600			10,400			12		11,600			10,400			12
Auto	717			740			(3)		717			740			(3)
Total allowance for loan losses	$	13,825	(g)	$	12,622		10	%	$	13,825	(g)	$	12,622		10	%

(a)At June 30, 2023 and 2022, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $139 million and $257 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.

(b)At June 30, 2023 and 2022, generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for further information on consumer assistance.

(c)At June 30, 2023 and 2022, included $163 million and $1.5 billion of loans, respectively, in Business Banking under the PPP. The Firm does not expect to realize material credit losses on PPP loans because the loans are guaranteed by the SBA. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.

(d)At June 30, 2023 and 2022, the principal balance of loans under payment deferral programs offered in response to the COVID-19 pandemic was $177 million and $513 million in Home Lending, respectively. Loans that are performing according to their modified terms are generally not considered delinquent. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for further information on consumer assistance.

(e)At June 30, 2023 and 2022, excluded mortgage loans insured by U.S. government agencies of $195 million and $315 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.

(f)As of June 30, 2023, included a $377 million allowance established as part of the First Republic acquisition.

(g)On January 1, 2023, the Firm adopted changes to the TDR accounting guidance. The adoption of this guidance resulted in a net decrease in the allowance for loan losses of $591 million, driven by residential real estate and credit card. Refer to Note 1 for further information.


Selected metrics
	As of or for the three months ended June 30,									As of or for the six months ended June 30,
(in billions, except ratios and where otherwise noted)	2023				2022			Change		2023				2022			Change
Business Metrics
Number of branches	4,874				4,822			1	%	4,874				4,822			1	%
Active digital customers (in thousands)(a)	65,559			(f)	60,735			8		65,559			(f)	60,735			8
Active mobile customers (in thousands)(b)	51,963			(f)	47,436			10		51,963			(f)	47,436			10
Debit and credit card sales volume	$	424.0			$	397.0		7		$	811.3			$	748.5		8
Total payments transaction volume (in trillions)(c)	1.5			(f)	1.5			—		2.9			(f)	2.8			4

Banking & Wealth Management
Average deposits	$	1,142.8		(g)	$	1,163.4		(2)		$	1,120.7		(g)	$	1,149.8		(3)
Deposit margin	2.83		%		1.31		%			2.81		%		1.27		%
Business Banking average loans	$	19.6			$	22.8		(14)		$	19.8			$	23.8		(17)
Business banking origination volume	1.3				1.2			7		2.3				2.2			4
Client investment assets(d)	892.9				628.5			42		892.9				628.5			42
Number of client advisors	5,153				4,890			5		5,153				4,890			5

Home Lending
Mortgage origination volume by channel
Retail	$	7.3		(h)	$	11.0		(34)		$	10.9		(h)	$	26.1		(58)
Correspondent	3.9				10.9			(64)		6.0				20.5			(71)
Total mortgage origination volume(e)	$	11.2			$	21.9		(49)		$	16.9			$	46.6		(64)

Third-party mortgage loans serviced (period-end)	$	604.5			$	575.6		5		604.5				$	575.6		5
MSR carrying value (period-end)	8.2				7.4			11		8.2				7.4			11

Card Services
Sales volume, excluding commercial card	$	294.0			$	271.2		8		$	560.2			$	507.6		10
Net revenue rate	9.11		%		9.59		%			9.73		%		9.72		%
Net yield on average loans	9.31				9.50					9.60				9.73

Auto
Loan and lease origination volume	$	12.0			$	7.0		71		$	21.2			$	15.4		38
Average auto operating lease assets	11.0				14.9			(26)	%	11.3				15.6			(28)	%

(a)Users of all web and/or mobile platforms who have logged in within the past 90 days.

(b)Users of all mobile platforms who have logged in within the past 90 days.

(c)Total payments transaction volume includes debit and credit card sales volume and gross outflows of ACH, ATM, teller, wires, BillPay, PayChase, Zelle, person-to-person and checks.

(d)Includes assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager. Refer to AWM segment results on pages 41-44 for additional information. As of June 30, 2023, included $150.9 billion of client investment assets associated with the First Republic acquisition.

(e)Firmwide mortgage origination volume was $13.0 billion and $27.9 billion for the three months ended June 30, 2023 and 2022, respectively, and $19.8 billion and $58.1 billion for the six months ended June 30, 2023 and 2022, respectively.

(f)Excludes the impact of the First Republic acquisition.

(g)For the three and six months ended June 30, 2023, included $47.2 billion and $23.7 billion, respectively, associated with the First Republic acquisition.

(h)For the three and six months ended June 30, 2023, included $1.1 billion associated with the First Republic acquisition.

CORPORATE & INVESTMENT BANK

Refer to pages 67-72 of JPMorgan Chase’s 2022 Form 10-K and Line of Business Metrics on page 206 for a further discussion of the business profile of CIB.


Selected income statement data
	Three months ended June 30,									Six months ended June 30,
(in millions, except ratios)	2023			2022				Change		2023			2022				Change
Revenue
Investment banking fees (a)	$	1,557		$	1,650			(6)	%	$	3,211		$	3,700			(13)	%
Principal transactions	6,697			5,048				33		14,105			10,271				37
Lending- and deposit-related fees	533			641				(17)		1,072			1,282				(16)
Commissions and other fees	1,219			1,328				(8)		2,453			2,660				(8)
Card income	400			337			(c)	19		715			603			(c)	19
All other income	396			(199)			(c)	NM		769			293			(c)	162
Noninterest revenue	10,802			8,805				23		22,325			18,809				19
Net interest income	1,717			3,198				(46)		3,794			6,770				(44)
Total net revenue(b)	12,519			12,003				4		26,119			25,579				2
Provision for credit losses	38			59				(36)		96			504				(81)

Noninterest expense
Compensation expense	3,461			3,510				(1)		7,546			7,516				—
Noncompensation expense	3,433			3,300			(c)	4		6,831			6,657			(c)	3
Total noninterest expense	6,894			6,810				1		14,377			14,173				1
Income before income tax expense	5,587			5,134				9		11,646			10,902				7
Income tax expense	1,495			1,417			(c)	6		3,133			2,813			(c)	11
Net income	$	4,092		$	3,717			10	%	$	8,513		$	8,089			5	%
Financial ratios
Return on equity	15		%	14		%				15		%	15		%
Overhead ratio	55			57			(c)			55			55
Compensation expense as percentage of total net revenue	28			29						29			29			(c)

(a)Includes CB's share of revenue from investment banking products sold to CB clients through the CIB that is subject to a revenue sharing arrangement which is reported as a reduction in All other income.

(b)Includes tax-equivalent adjustments, predominantly due to income tax credits and other tax benefits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bonds of $953 million and $772 million for the three months ended June 30, 2023 and 2022, respectively and $1.8 billion and $1.5 billion for the six months ended June 30, 2023 and 2022, respectively.

(c)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.


Selected income statement data
	Three months ended June 30,							Six months ended June 30,
(in millions)	2023		2022			Change		2023		2022			Change
Revenue by business
Investment Banking	$	1,494	$	1,351		11	%	$	3,054	$	3,408		(10)	%
Payments	2,451		1,519		(b)	61		4,847		3,420		(b)	42
Lending	299		410			(27)		566		731			(23)
Total Banking	4,244		3,280			29		8,467		7,559			12
Fixed Income Markets	4,567		4,711			(3)		10,266		10,409			(1)
Equity Markets	2,451		3,079			(20)		5,134		6,134			(16)
Securities Services	1,221		1,151			6		2,369		2,219			7
Credit Adjustments & Other(a)	36		(218)			NM		(117)		(742)			84
Total Markets & Securities Services	8,275		8,723			(5)		17,652		18,020			(2)
Total net revenue	$	12,519	$	12,003		4	%	$	26,119	$	25,579		2	%

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

(b)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.

Quarterly results

Net income was $4.1 billion, up 10%.

Net revenue was $12.5 billion, up 4%.

Banking revenue was $4.2 billion, up 29%.

•Investment Banking revenue was $1.5 billion, up 11%. Excluding $257 million of markdowns on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio recorded in the prior year, Investment Banking revenue was down 7%. Investment Banking fees were down 6%, driven by lower advisory fees. The Firm ranked #1 for Global Investment Banking fees, according to Dealogic.

–Advisory fees were $540 million, down 19%, due to a lower level of announced deals in prior periods amid a challenging environment.

–Debt underwriting fees were $699 million, down 6%, as challenging market conditions resulted in lower issuance activity in the leveraged loan market primarily related to acquisition financing.

–Equity underwriting fees were $318 million, up 30%, primarily due to higher convertible securities offerings and, in the second half of the quarter, follow-on offerings that benefited from the lower equity market volatility.

•Payments revenue was $2.5 billion, up 61%. Excluding the net impact of equity investments, Payments revenue was up 32%, driven by deposit margin expansion on higher rates, partially offset by lower average deposits.

•Lending revenue was $299 million, down 27%, and included $80 million of fair value losses on hedges of retained loans.

Markets & Securities Services revenue was $8.3 billion, down 5%. Markets revenue was $7.0 billion, down 10%.

•Fixed Income Markets revenue was $4.6 billion, down 3%, reflecting lower revenue in Currencies & Emerging Markets, Commodities and Rates as the macro businesses substantially normalized from the prior year's elevated levels of volatility and client activity, largely offset by higher revenue in the Securitized Products Group and Credit Trading.

•Equity Markets revenue was $2.5 billion, down 20%, predominantly driven by lower revenue in Equity Derivatives, compared to a strong second quarter in the prior year.

•Securities Services revenue was $1.2 billion, up 6%, driven by deposit margin expansion on higher rates, largely offset by lower fees and lower average deposits.

•Credit Adjustments & Other was a gain of $36 million, compared with a loss of $218 million in the prior year, largely driven by funding spread widening.

Noninterest expense was $6.9 billion, up 1%, driven by higher non-compensation expense, as well as wage inflation and headcount growth, largely offset by lower revenue-related compensation.

The provision for credit losses was $38 million, including net charge-offs of $56 million.

The prior year provision was $59 million.

Refer to Credit and Investment Risk Management on pages 62-83 and Allowance for Credit Losses on pages 80-82 for a further discussion of the credit portfolios and the allowance for credit losses.

Year-to-date results

Net income was $8.5 billion, up 5%.

Net revenue was $26.1 billion, up 2%.

Banking revenue was $8.5 billion, up 12%.

•Investment Banking revenue was $3.1 billion, down 10%. Excluding $257 million of markdowns on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio recorded in the second quarter of 2022, Investment Banking revenue was down 17%. Investment Banking fees were down 13%, driven by lower debt underwriting and advisory fees. The Firm ranked #1 for Global Investment Banking fees, according to Dealogic.

–Debt underwriting fees were $1.4 billion, down 22%, as challenging market conditions resulted in lower issuance activity in acquisition financing.

–Advisory fees were $1.3 billion, down 12%, due to a lower level of announced deals in prior periods amid a challenging environment.

–Equity underwriting fees were $553 million, up 12%, primarily due to higher convertible securities offerings and, in the second half of the second quarter, follow-on offerings that benefited from the lower equity market volatility.

•Payments revenue was $4.8 billion, up 42%, driven by deposit margin expansion on higher rates, partially offset by lower average deposits.

•Lending revenue was $566 million, down 23%, driven by $183 million of fair value losses on hedges of retained loans, compared to $112 million of gains in the prior year, partially offset by higher net interest income.

Markets & Securities Services revenue was $17.7 billion, down 2%. Markets revenue was $15.4 billion, down 7%.

•Fixed Income Markets revenue was $10.3 billion, down 1%, reflecting lower revenue in Currencies & Emerging Markets and Commodities, largely offset by higher revenue in Rates, the Securitized Products Group and Credit Trading.

•Equity Markets revenue was $5.1 billion, down 16%, predominantly driven by lower revenue in Equity Derivatives.

•Securities Services revenue was $2.4 billion, up 7%, driven by deposit margin expansion on higher rates, largely offset by lower fees and lower average deposits.

•Credit Adjustments & Other was a loss of $117 million, driven by losses on certain components of fair value option elected liabilities, compared with a loss of $742 million in the prior year, which was predominantly driven

by funding spread widening, and to a lesser extent losses on exposure relating to commodities and Russia and Russia-associated counterparties.

Noninterest expense was $14.4 billion, up 1%, driven by headcount growth, wage inflation and higher non-compensation expense, largely offset by lower revenue-related compensation.

The provision for credit losses was $96 million, driven by net charge-offs of $106 million.

The prior year provision was $504 million.


Selected metrics
	As of or for the three months ended June 30,						As of or for the six months ended June 30,
(in millions, except headcount)	2023		2022		Change		2023		2022		Change
Selected balance sheet data (period-end)
Total assets	$	1,432,054	$	1,403,558	2	%	$	1,432,054	$	1,403,558	2	%
Loans:
Loans retained(a)	194,450		171,219		14		194,450		171,219		14
Loans held-for-sale and loans at fair value(b)	38,959		46,032		(15)		38,959		46,032		(15)
Total loans	233,409		217,251		7		233,409		217,251		7
Equity	108,000		103,000		5		108,000		103,000		5
Selected balance sheet data (average)
Total assets	$	1,461,857	$	1,429,953	2		$	1,445,848	$	1,418,955	2
Trading assets-debt and equity instruments	533,082		411,079		30		511,047		415,190		23
Trading assets-derivative receivables	63,094		83,582		(25)		63,553		75,184		(15)
Loans:
Loans retained(a)	$	189,153	$	169,909	11		$	187,372	$	165,467	13
Loans held-for-sale and loans at fair value(b)	38,132		48,048		(21)		40,339		49,714		(19)
Total loans	$	227,285	$	217,957	4		$	227,711	$	215,181	6
Deposits	722,818		773,664		(7)		711,266		765,200		(7)
Equity	108,000		103,000		5		108,000		103,000		5
Headcount	74,822		69,447		8	%	74,822		69,447		8	%

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

(b)Loans held-for-sale and loans at fair value primarily reflect lending-related positions originated and purchased in Markets, including loans held for securitization.


Selected metrics
	As of or for the three months ended June 30,								As of or for the six months ended June 30,
(in millions, except ratios)	2023			2022			Change		2023			2022			Change
Credit data and quality statistics
Net charge-offs/(recoveries)	$	56		$	38		47	%	$	106		$	58		83	%
Nonperforming assets:
Nonaccrual loans:
Nonaccrual loans retained(a)	$	924		$	697		33		$	924		$	697		33
Nonaccrual loans held-for-sale and loans at fair value(b)	818			840			(3)		818			840			(3)
Total nonaccrual loans	1,742			1,537			13		1,742			1,537			13
Derivative receivables	286			447			(36)		286			447			(36)
Assets acquired in loan satisfactions	133			84			58		133			84			58
Total nonperforming assets	$	2,161		$	2,068		4		$	2,161		$	2,068		4
Allowance for credit losses:
Allowance for loan losses	$	2,531		$	1,809		40		$	2,531		$	1,809		40
Allowance for lending-related commitments	1,207			1,358			(11)		1,207			1,358			(11)
Total allowance for credit losses	$	3,738		$	3,167		18	%	$	3,738		$	3,167		18	%
Net charge-off/(recovery) rate(c)	0.12		%	0.09		%			0.11		%	0.07		%
Allowance for loan losses to period-end loans retained	1.30			1.06					1.30			1.06
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(d)	1.86			1.38					1.86			1.38
Allowance for loan losses to nonaccrual loans retained(a)	274			260					274			260
Nonaccrual loans to total period-end loans	0.75		%	0.71		%			0.75		%	0.71		%

(a)Allowance for loan losses of $145 million and $130 million were held against these nonaccrual loans at June 30, 2023 and 2022, respectively.

(b)At June 30, 2023 and 2022, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $76 million and $196 million, respectively. These amounts have been excluded based upon the government guarantee.

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

(d)Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 20-21.


Investment banking fees
	Three months ended June 30,						Six months ended June 30,
(in millions)	2023		2022		Change		2023		2022		Change
Advisory	$	540	$	664	(19)	%	$	1,296	$	1,465	(12)	%
Equity underwriting	318		245		30		553		494		12
Debt underwriting(a)	699		741		(6)		1,362		1,741		(22)
Total investment banking fees	$	1,557	$	1,650	(6)	%	$	3,211	$	3,700	(13)	%

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


League table results – wallet share
	Three months ended June 30,								Six months ended June 30,								Full-year 2022
	2023				2022				2023				2022
	Rank		Share		Rank		Share		Rank		Share		Rank		Share		Rank		Share
Based on fees(a)
M&A(b)
Global	#	2	8.7	%	#	2	7.5	%	#	2	9.3	%	#	2	7.4	%	#	2	8.0	%
U.S.	2		11.5		2		8.3		2		11.8		2		8.4		2		9.0
Equity and equity-related(c)
Global	1		7.6		1		6.0		1		7.1		1		5.6		2		5.7
U.S.	1		14.7		1		15.1		1		13.3		1		13.2		1		13.8
Long-term debt(d)
Global	2		6.8		1		7.2		1		6.7		1		7.6		1		6.9
U.S.	2		10.4		1		12.5		2		10.0		1		12.3		1		12.2
Loan syndications
Global	1		12.4		1		12.2		1		12.6		1		11.3		1		11.0
U.S.	1		15.7		1		13.9		1		16.1		1		11.9		1		12.7
Global investment banking fees(e)	#	1	8.3	%	#	2	8.1	%	#	1	8.4	%	#	1	7.9	%	#	1	7.8	%

(a)Source: Dealogic as of July 3, 2023. Reflects the ranking of revenue wallet and market share.

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

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

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

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

Markets revenue

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

reflected at fair value in principal transactions revenue. Refer to Notes 6 and 7 for a description of the composition of these income statement line items. Refer to Markets revenue on page 70 of JPMorgan Chase’s 2022 Form 10-K for further information.

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


	Three months ended June 30,						Three months ended June 30,
	2023						2022
(in millions)	Fixed Income Markets		Equity Markets		Total Markets		Fixed Income Markets		Equity Markets		Total Markets
Principal transactions	$	3,120	$	3,350	$	6,470	$	2,934	$	2,448	$	5,382
Lending- and deposit-related fees	76		7		83		76		4		80
Commissions and other fees	151		472		623		128		516		644
All other income	369		(40)		329		166		(31)		135
Noninterest revenue	3,716		3,789		7,505		3,304		2,937		6,241
Net interest income(a)	851		(1,338)		(487)		1,407		142		1,549
Total net revenue	$	4,567	$	2,451	$	7,018	$	4,711	$	3,079	$	7,790

	Six months ended June 30,						Six months ended June 30,
	2023						2022
(in millions)	Fixed Income Markets		Equity Markets		Total Markets		Fixed Income Markets		Equity Markets		Total Markets
Principal transactions	$	7,518	$	6,379	$	13,897	$	6,323	$	4,732	$	11,055
Lending- and deposit-related fees	146		14		160		154		8		162
Commissions and other fees	295		994		1,289		284		1,063		1,347
All other income	700		(54)		646		283		(71)		212
Noninterest revenue	8,659		7,333		15,992		7,044		5,732		12,776
Net interest income(a)	1,607		(2,199)		(592)		3,365		402		3,767
Total net revenue	$	10,266	$	5,134	$	15,400	$	10,409	$	6,134	$	16,543

(a)The decline in Markets net interest income was driven by higher funding costs.


Selected metrics
	As of or for the three months ended June 30,						As of or for the six months ended June 30,
(in millions, except where otherwise noted)	2023		2022		Change		2023		2022		Change
Assets under custody (“AUC”) by asset class (period-end) (in billions):
Fixed Income	$	14,708	$	14,720	—	%	$	14,708	$	14,720	—	%
Equity	11,892		10,359		15		11,892		10,359		15
Other(a)	3,824		3,500		9		3,824		3,500		9
Total AUC	$	30,424	$	28,579	6		$	30,424	$	28,579	6
Merchant processing volume (in billions)(b)	$	600.1	$	539.6	11		$	1,158.9	$	1,029.8	13
Client deposits and other third-party liabilities (average)(c)	$	647,479	$	722,388	(10)	%	$	640,642	$	715,791	(10)	%

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

(b)Represents Firmwide merchant processing volume.

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


International metrics
	As of or for the three months ended June 30,							As of or for the six months ended June 30,
(in millions, except where otherwise noted)	2023		2022			Change		2023		2022			Change
Total net revenue(a)
Europe/Middle East/Africa	$	3,813	$	4,280		(11)	%	$	8,081	$	8,972		(10)	%
Asia-Pacific	1,889		2,023			(7)		4,022		4,008			—
Latin America/Caribbean	543		464			17		1,105		1,141			(3)
Total international net revenue	6,245		6,767			(8)		13,208		14,121			(6)
North America	6,274		5,236		(c)	20		12,911		11,458		(c)	13
Total net revenue	$	12,519	$	12,003		4		$	26,119	$	25,579		2

Loans retained (period-end)(a)
Europe/Middle East/Africa	$	39,752	$	35,524		12		$	39,752	$	35,524		12
Asia-Pacific	14,789		16,427			(10)		14,789		16,427			(10)
Latin America/Caribbean	8,704		7,961			9		8,704		7,961			9
Total international loans	63,245		59,912			6		63,245		59,912			6
North America	131,205		111,307			18		131,205		111,307			18
Total loans retained	$	194,450	$	171,219		14		$	194,450	$	171,219		14

Client deposits and other third-party liabilities (average)(b)
Europe/Middle East/Africa	$	228,490	$	272,919		(16)		$	229,655	$	259,781		(12)
Asia-Pacific	128,253		129,514			(1)		127,146		132,126			(4)
Latin America/Caribbean	38,911		41,785			(7)		38,825		42,720			(9)
Total international	$	395,654	$	444,218		(11)		$	395,626	$	434,627		(9)
North America	251,825		278,170			(9)		245,016		281,164			(13)
Total client deposits and other third-party liabilities	$	647,479	$	722,388		(10)		$	640,642	$	715,791		(10)

AUC (period-end)(b) (in billions)
North America	$	20,512	$	18,816		9		$	20,512	$	18,816		9
All other regions	9,912		9,763			2		9,912		9,763			2
Total AUC	$	30,424	$	28,579		6	%	$	30,424	$	28,579		6	%

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

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

COMMERCIAL BANKING

Refer to pages 73-75 of JPMorgan Chase’s 2022 Form 10-K and Line of Business Metrics on page 207 for a discussion of the business profile of CB.


Selected income statement data
	Three months ended June 30,							Six months ended June 30,
(in millions)	2023			2022		Change		2023			2022		Change
Revenue
Lending- and deposit-related fees	$	249		$	348	(28)	%	$	476		$	712	(33)	%
Card income	201			170		18		374			337		11
All other income	385			386		—		766			722		6
Noninterest revenue	835			904		(8)		1,616			1,771		(9)
Net interest income	3,153		(b)	1,779		77		5,883		(b)	3,310		78
Total net revenue(a)	3,988			2,683		49		7,499			5,081		48

Provision for credit losses	1,097		(b)	209		425		1,514		(b)	366		314

Noninterest expense
Compensation expense	656			559		17		1,297			1,112		17
Noncompensation expense	644			597		8		1,311			1,173		12
Total noninterest expense	1,300			1,156		12		2,608			2,285		14

Income before income tax expense	1,591			1,318		21		3,377			2,430		39
Income tax expense	383			324		18		822			586		40
Net income	$	1,208		$	994	22	%	$	2,555		$	1,844	39	%

(a)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $89 million and $73 million for the three months ended June 30, 2023 and 2022, respectively and $171 million and $142 million for the six months ended June 30, 2023 and 2022, respectively.

(b)Includes the impact of the First Republic acquisition. Refer to page 24 for additional information.


Selected income statement data (continued)
	Three months ended June 30,									Six months ended June 30,
(in millions, except ratios)	2023				2022			Change		2023				2022			Change
Revenue by product
Lending	$	1,480		(c)	$	1,058		40	%	$	2,702		(c)	$	2,163		25	%
Payments	2,248				1,253			79		4,276				2,275			88
Investment banking(a)	213				234			(9)		463				453			2
Other	47				138			(66)		58				190			(69)
Total net revenue	$	3,988			$	2,683		49		$	7,499			$	5,081		48

Investment Banking and Markets revenue, gross(b)	$	767			$	788		(3)		$	1,648			$	1,517		9

Revenue by client segments
Middle Market Banking	$	1,916		(d)	$	1,169		64		$	3,597		(d)	$	2,149		67
Corporate Client Banking	1,229				927			33		2,405				1,757			37
Commercial Real Estate Banking	806			(d)	590			37		1,448			(d)	1,171			24
Other	37				(3)			NM		49				4			NM
Total net revenue	$	3,988			$	2,683		49	%	$	7,499			$	5,081		48	%

Financial ratios
Return on equity	16		%		15		%			17		%		14		%
Overhead ratio	33				43					35				45

(a)Includes CB’s share of revenue from investment banking products sold to CB clients through the CIB which is reported in All other income.

(b)Includes gross revenues earned by the Firm that are subject to a revenue sharing arrangement between CB and the CIB for Investment Banking and Markets' products sold to CB clients. This includes revenues related to fixed income and equity markets products. Refer to Business Segment Results on page 22 for discussion of revenue sharing.

(c)Includes the impact of the First Republic acquisition. Refer to page 24 for additional information.

(d)For the three and six months ended June 30, 2023, included $48 million and $130 million for Middle Market Banking and Commercial Real Estate Banking, respectively, associated with the First Republic acquisition.

Quarterly results

Net income was $1.2 billion, up 22%.

Net revenue was $4.0 billion, up 49%. Net interest income was $3.2 billion, up 77%, predominantly driven by deposit margin expansion on higher rates and higher average loans, partially offset by lower average deposits.

Noninterest revenue was $835 million, down 8%, driven by lower deposit-related fees due to the higher level of credits earned by clients that reduce such fees, partially offset by higher card income.

Noninterest expense was $1.3 billion, up 12%, predominantly driven by higher compensation expense, including headcount growth, as well as higher volume-related expense.

The provision for credit losses was $1.1 billion, reflecting an addition of $608 million to establish the allowance for the First Republic loans and lending-related commitments. The net addition also reflected $389 million driven by updates to certain assumptions related to office real estate, as well as net downgrade activity in Middle Market Banking.

The prior year provision was $209 million.

Refer to Credit and Investment Risk Management on pages 62-83 and Allowance for Credit Losses on pages 80-82 for further discussions of the credit portfolios and the allowance for credit losses.

Year-to-date results

Net income was $2.6 billion, up 39%.

Net revenue was $7.5 billion, up 48%. Net interest income was $5.9 billion, up 78%, driven by deposit margin expansion on higher rates and higher average loans, partially offset by lower average deposits.

Noninterest revenue was $1.6 billion, down 9%, driven by lower deposit-related fees due to the higher level of credits earned by clients that reduce such fees, partially offset by higher card income.

Noninterest expense was $2.6 billion, up 14%, largely driven by higher compensation expense, including headcount growth, as well as higher volume-related expense.

The provision for credit losses was $1.5 billion, reflecting an addition of $608 million to establish the allowance for the First Republic loans and lending-related commitments, in the second quarter of 2023. The net addition also reflected $768 million driven by a deterioration in the Firm's weighted-average economic outlook, including updates to certain assumptions related to office real estate, as well as net downgrade activity.

The prior year provision was $366 million.


Selected metrics
	As of or for the three months ended June 30,							As of or for the six months ended June 30,
(in millions, except headcount)	2023			2022		Change		2023			2022		Change
Selected balance sheet data (period-end)
Total assets	$	305,280		$	242,456	26	%	$	305,280		$	242,456	26	%
Loans:
Loans retained	282,124		(b)	223,541		26		282,124		(b)	223,541		26
Loans held-for-sale and loans at fair value	1,540			566		172		1,540			566		172
Total loans	$	283,664		$	224,107	27		$	283,664		$	224,107	27
Equity	30,000			25,000		20		30,000			25,000		20

Period-end loans by client segment
Middle Market Banking(a)	$	79,885	(c)	$	68,535	17		$	79,885	(c)	$	68,535	17
Corporate Client Banking	60,511			49,503		22		60,511			49,503		22
Commercial Real Estate Banking	142,897		(c)	105,982		35		142,897		(c)	105,982		35
Other	371			87		326		371			87		326
Total loans(a)	$	283,664		$	224,107	27		$	283,664		$	224,107	27

Selected balance sheet data (average)
Total assets	$	290,875		$	239,381	22		$	273,269		$	236,444	16
Loans:
Loans retained	270,091		(d)	218,478		24		253,542		(d)	213,536		19
Loans held-for-sale and loans at fair value	726			1,004		(28)		939			1,572		(40)
Total loans	$	270,817		$	219,482	23		$	254,481		$	215,108	18

Average loans by client segment
Middle Market Banking	$	78,037	(e)	$	66,640	17		$	75,547	(e)	$	64,550	17
Corporate Client Banking	59,159			47,832		24		57,877			46,720		24
Commercial Real Estate Banking	133,394		(e)	104,890		27		120,838		(e)	103,701		17
Other	227			120		89		219			137		60
Total loans	$	270,817		$	219,482	23		$	254,481		$	215,108	18

Deposits	275,196			300,339		(8)		270,595			308,518		(12)
Equity	29,505			25,000		18		29,005			25,000		16

Headcount	15,991			13,811		16	%	15,991			13,811		16	%

(a)At June 30, 2023 and 2022, total loans included $65 million and $335 million of loans, respectively, under the PPP, of which $60 million and $306 million were in Middle Market Banking, respectively. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.

(b)Includes the impact of the First Republic acquisition. Refer to page 24 for additional information.

(c)As of June 30, 2023, included $6.2 billion and $33.3 billion for Middle Market Banking and Commercial Real Estate Banking, respectively, associated with the First Republic acquisition.

(d)For the three and six months ended June 30, 2023, included $28.6 billion and $14.4 billion, respectively, associated with the First Republic acquisition.

(e)For the three months ended June 30, 2023, included $4.4 billion and $24.2 billion for Middle Market Banking and Commercial Real Estate Banking, respectively, and for the six months ended June 30, 2023, included $2.2 billion and $12.2 billion for Middle Market Banking and Commercial Real Estate Banking, respectively, associated with the First Republic acquisition.


Selected metrics (continued)
	As of or for the three months ended June 30,									As of or for the six months ended June 30,
(in millions, except ratios)	2023				2022			Change		2023				2022			Change
Credit data and quality statistics
Net charge-offs/(recoveries)	$	100			$	1		NM		$	137			$	7		NM
Nonperforming assets
Nonaccrual loans:
Nonaccrual loans retained(a)	$	1,068			$	761		40	%	$	1,068			$	761		40	%
Nonaccrual loans held-for-sale and loans at fair value	—				—			—		—				—			—
Total nonaccrual loans	$	1,068			$	761		40		$	1,068			$	761		40
Assets acquired in loan satisfactions	—				8			NM		—				8			NM
Total nonperforming assets	$	1,068			$	769		39		$	1,068			$	769		39
Allowance for credit losses:
Allowance for loan losses	$	4,729			$	2,602		82		$	4,729			$	2,602		82
Allowance for lending-related commitments	801				725			10		801				725			10
Total allowance for credit losses	$	5,530		(c)	$	3,327		66	%	$	5,530		(c)	$	3,327		66	%
Net charge-off/(recovery) rate(b)	0.15		%		—		%			0.11		%		0.01		%
Allowance for loan losses to period-end loans retained	1.68				1.16					1.68				1.16
Allowance for loan losses to nonaccrual loans retained(a)	443				342					443				342
Nonaccrual loans to period-end total loans	0.38				0.34					0.38				0.34

(a)Allowance for loan losses of $205 million and $74 million was held against nonaccrual loans retained at June 30, 2023 and 2022, respectively.

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

(c)As of June 30, 2023, included a $608 million allowance established as part of the First Republic acquisition.

ASSET & WEALTH MANAGEMENT

Refer to pages 76-78 of JPMorgan Chase’s 2022 Form 10-K and Line of Business Metrics on pages 207–208 for a discussion of the business profile of AWM.


Selected income statement data
(in millions, except ratios)	Three months ended June 30,									Six months ended June 30,
	2023				2022			Change		2023				2022			Change
Revenue
Asset management fees	$	2,930			$	2,797		5	%	$	5,691			$	5,696		—	%
Commissions and other fees	196				240			(18)		377				456			(17)
All other income	232			(a)	47			394		623			(a)	171			264
Noninterest revenue	3,358				3,084			9		6,691				6,323			6
Net interest income	1,585			(a)	1,222			30		3,036			(a)	2,298			32
Total net revenue	4,943				4,306			15		9,727				8,621			13

Provision for credit losses	145			(a)	44			230		173			(a)	198			(13)

Noninterest expense
Compensation expense	1,746				1,508			16		3,481				3,038			15
Noncompensation expense	1,417				1,411			—		2,773				2,741			1
Total noninterest expense	3,163				2,919			8		6,254				5,779			8

Income before income tax expense	1,635				1,343			22		3,300				2,644			25
Income tax expense	409				339			21		707				632			12
Net income	$	1,226			$	1,004		22		$	2,593			$	2,012		29

Revenue by line of business
Asset Management	$	2,128			$	2,137		—		$	4,562			$	4,451		2
Global Private Bank	2,815			(a)	2,169			30		5,165			(a)	4,170			24
Total net revenue	$	4,943			$	4,306		15	%	$	9,727			$	8,621		13	%

Financial ratios
Return on equity	29		%		23		%			31		%		23		%
Overhead ratio	64				68					64				67
Pre-tax margin ratio:
Asset Management	27				29					32				31
Global Private Bank	37				33					35				30
Asset & Wealth Management	33				31					34				31

(a)Includes the impact of the First Republic acquisition. Refer to page 24 for additional information.

Quarterly results

Net income was $1.2 billion, up 22%.

Net revenue was $4.9 billion, up 15%. Net interest income was $1.6 billion, up 30%. Noninterest revenue was $3.4 billion, up 9%.

Revenue from Asset Management was $2.1 billion, flat compared to the prior year, driven by:

•lower NII due to higher funding costs,

largely offset by

•higher management fees on strong net inflows.

Revenue from Global Private Bank was $2.8 billion, up 30%, predominantly driven by:

•deposit margin expansion reflecting higher rates on lower average deposit balances, and

•higher lending-related fees and average loans driven by the impact of the First Republic acquisition.

Noninterest expense was $3.2 billion, up 8%, driven by higher compensation, including growth in private banking advisor teams, higher revenue-related compensation and

the impact from the acquisitions of Global Shares and J.P. Morgan Asset Management China.

The provision for credit losses was $145 million, driven by a $146 million addition to the allowance for credit losses to establish the allowance for the First Republic loans and lending-related commitments.

Refer to Credit and Investment Risk Management on pages 62-83 and Allowance for Credit Losses on pages 80-82 for further discussions of the credit portfolios and the allowance for credit losses.

Year-to-date results

Net income was $2.6 billion, up 29%.

Net revenue was $9.7 billion, up 13%. Net interest income was $3.0 billion, up 32%. Noninterest revenue was $6.7 billion, up 6%.

Revenue from Asset Management was $4.6 billion, up 2%, driven by:

•a gain of $339 million on the original minority interest in CIFM upon the Firm's acquisition of the remaining 51% interest in the entity,

largely offset by

•lower NII driven by higher funding costs,

•lower performance fees, and

•lower asset management fees reflecting a decline in market levels predominantly offset by the removal of most money market fund fee waivers in the prior year and the impact of net inflows.

Revenue from Global Private Bank was $5.2 billion, up 24%, driven by:

•deposit margin expansion reflecting higher rates on lower average deposit balances, and

•higher lending-related fees and average loans driven by the impact of the First Republic acquisition,

partially offset by

•an investment valuation loss in the first quarter of 2023.

Noninterest expense was $6.3 billion, up 8%, predominantly driven by higher compensation, including growth in private banking advisor teams, higher revenue-related compensation and the impact from the acquisitions of Global Shares and J.P. Morgan Asset Management China.

The provision for credit losses was $173 million, predominantly driven by a $146 million addition to the allowance for credit losses to establish the allowance for the First Republic loans and lending-related commitments, in the second quarter of 2023.

The prior year provision was $198 million.


Selected metrics
	As of or for the three months ended June 30,									As of or for the six months ended June 30,
(in millions, except ranking data, headcount and ratios)	2023				2022			Change		2023				2022			Change
% of JPM mutual fund assets rated as 4- or 5-star(a)	69		%		72		%			69		%		72		%
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
1 year	59				64					59				64
3 years	66				73					66				73
5 years	80				79					80				79

Selected balance sheet data (period-end)(c)
Total assets	$	247,118			$	235,553		5	%	$	247,118			$	235,553		5	%
Loans	222,493			(d)	218,841			2		222,493			(d)	218,841			2
Deposits	199,763				257,437			(22)		199,763				257,437			(22)
Equity	17,000				17,000			—		17,000				17,000			—

Selected balance sheet data (average)(c)
Total assets	$	238,987			$	234,565		2		$	233,933			$	233,444		—
Loans	219,469			(e)	216,846			1		215,491			(e)	215,735			—
Deposits	211,872				268,861			(21)		218,078				278,256			(22)
Equity	16,670				17,000			(2)		16,337				17,000			(4)

Headcount	26,931				23,981			12		26,931				23,981			12

Number of Global Private Bank client advisors	3,214				2,866			12		3,214				2,866			12

Credit data and quality statistics(c)
Net charge-offs/(recoveries)	$	2			$	9		(78)		$	—			$	8		NM
Nonaccrual loans	615				620			(1)		615				620			(1)
Allowance for credit losses:
Allowance for loan losses	$	649			$	547		19		$	649			$	547		19
Allowance for lending-related commitments	39				22			77		39				22			77
Total allowance for credit losses	$	688		(f)	$	569		21	%	$	688		(f)	$	569		21	%
Net charge-off/(recovery) rate	—		%		0.02		%			—		%		0.01		%
Allowance for loan losses to period-end loans	0.29				0.25					0.29				0.25
Allowance for loan losses to nonaccrual loans	106				88					106				88
Nonaccrual loans to period-end loans	0.28				0.28					0.28				0.28

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

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

(c)Loans, deposits and related credit data and quality statistics relate to the Global Private Bank business.

(d)Includes the impact of the First Republic acquisition. Refer to page 24 for additional information.

(e)For the three and six months ended June 30, 2023, included $9.7 billion and $4.9 billion, respectively, associated with the First Republic acquisition.

(f)As of June 30, 2023, included a $146 million allowance established as part of the First Republic acquisition.

Client assets

Assets under management of $3.2 trillion were up 16%, while client assets of $4.6 trillion were up 20%, driven by continued net inflows, higher market levels and the impact of the acquisition of Global Shares.


Client assets
	As of June 30,
(in billions)	2023			2022		Change
Assets by asset class
Liquidity	$	826		$	654	26	%
Fixed income	718			624		15
Equity	792			641		24
Multi-asset	647			615		5
Alternatives	205			209		(2)
Total assets under management	3,188			2,743		16
Custody/brokerage/administration/deposits	1,370		(b)	1,055		30
Total client assets(a)	$	4,558		$	3,798	20

Assets by client segment
Private Banking	$	881		$	712	24
Global Institutional	1,423			1,294		10
Global Funds	884			737		20
Total assets under management	$	3,188		$	2,743	16

Private Banking	$	2,170	(b)	$	1,715	27
Global Institutional	1,497			1,339		12
Global Funds	891			744		20
Total client assets(a)	$	4,558		$	3,798	20	%

(a)Includes CCB client investment assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager.

(b)Includes the impact of the acquisition of Global Shares.


Client assets (continued)
	Three months ended June 30,				Six months ended June 30,
(in billions)	2023		2022		2023		2022
Assets under management rollforward
Beginning balance	$	3,006	$	2,960	$	2,766	$	3,113
Net asset flows:
Liquidity	60		—		153		(52)
Fixed income	37		(1)		63		(4)
Equity	20		9		42		20
Multi-asset	3		(3)		1		3
Alternatives	1		1		2		6
Market/performance/other impacts	61		(223)		161		(343)
Ending balance, June 30	$	3,188	$	2,743	$	3,188	$	2,743

Client assets rollforward
Beginning balance	$	4,347	$	4,116	$	4,048	$	4,295
Net asset flows	112		(1)		264		(6)
Market/performance/other impacts	99		(317)		246		(491)
Ending balance, June 30	$	4,558	$	3,798	$	4,558	$	3,798


International
	Three months ended June 30,						Six months ended June 30,
(in millions)	2023		2022		Change		2023		2022		Change
Total net revenue(a)
Europe/Middle East/Africa	$	853	$	719	19	%	$	1,700	$	1,489	14	%
Asia-Pacific	497		452		10		974		912		7
Latin America/Caribbean	247		248		—		487		499		(2)
Total international net revenue	1,597		1,419		13		3,161		2,900		9
North America	3,346		2,887		16		6,566		5,721		15
Total net revenue(a)	$	4,943	$	4,306	15	%	$	9,727	$	8,621	13	%

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


	As of June 30,						As of June 30,
(in billions)	2023		2022		Change		2023		2022		Change
Assets under management
Europe/Middle East/Africa	$	527	$	481	10	%	$	527	$	481	10	%
Asia-Pacific	252		214		18		252		214		18
Latin America/Caribbean	79		68		16		79		68		16
Total international assets under management	858		763		12		858		763		12
North America	2,330		1,980		18		2,330		1,980		18
Total assets under management	$	3,188	$	2,743	16		$	3,188	$	2,743	16

Client assets
Europe/Middle East/Africa	$	663	$	595	11		$	663	$	595	11
Asia-Pacific	378		324		17		378		324		17
Latin America/Caribbean	217		184		18		217		184		18
Total international client assets	1,258		1,103		14		1,258		1,103		14
North America	3,300		2,695		22		3,300		2,695		22
Total client assets	$	4,558	$	3,798	20	%	$	4,558	$	3,798	20	%

CORPORATE

Refer to pages 79-80 of JPMorgan Chase’s 2022 Form 10-K for a discussion of Corporate.


Selected income statement and balance sheet data
	As of or for the three months ended June 30,							As of or for the six months ended June 30,
(in millions, except headcount)	2023			2022		Change		2023			2022		Change
Revenue
Principal transactions	$	113		$	17	NM		$	195		$	(144)	NM
Investment securities losses	(900)			(153)		(488)	%	(1,768)			(547)		(223)	%
All other income	2,767		(c)	(108)		NM		2,798		(c)	102		NM
Noninterest revenue	1,980			(244)		NM		1,225			(589)		NM
Net interest income	1,738		(c)	324		436		3,478		(c)	(212)		NM
Total net revenue(a)	3,718			80		NM		4,703			(801)		NM
Provision for credit losses	(243)			28		NM		127			57		123
Noninterest expense	1,152		(c)	206		459		1,312		(c)	390		236
Income/(loss) before income tax expense/(benefit)	2,809			(154)		NM		3,264			(1,248)		NM
Income tax expense/(benefit)	169		(d)	20		NM		380		(d)	(218)		NM
Net income/(loss)	$	2,640		$	(174)	NM		$	2,884		$	(1,030)	NM
Total net revenue
Treasury and CIO	$	1,261		$	82	NM		$	2,367		$	(862)	NM
Other Corporate	2,457		(c)	(2)		NM		2,336		(c)	61		NM
Total net revenue	$	3,718		$	80	NM		$	4,703		$	(801)	NM
Net income/(loss)
Treasury and CIO	$	1,057		$	88	NM		$	1,681		$	(660)	NM
Other Corporate	1,583		(c)	(262)		NM		1,203		(c)	(370)		NM
Total net income/(loss)	$	2,640		$	(174)	NM		$	2,884		$	(1,030)	NM
Total assets (period-end)	$	1,263,595		$	1,459,528	(13)		$	1,263,595		$	1,459,528	(13)
Loans (period-end)	2,172			2,187		(1)		2,172			2,187		(1)
Deposits (period-end)(b)	21,083			13,191		60		21,083			13,191		60
Headcount	45,235			40,348		12	%	45,235			40,348		12	%

(a)Included tax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of $45 million and $60 million for the three months ended June 30, 2023 and 2022, respectively, and $101 million and $118 million for the six months ended June 30, 2023 and 2022, respectively.

(b)Predominantly relates to the Firm's international consumer initiatives.

(c)Includes the impacts of the First Republic acquisition. Refer to Note 28 for additional information.

(d)Income taxes associated with the First Republic acquisition are reflected in the estimated bargain purchase gain.

Quarterly results

Net income was $2.6 billion, compared with a net loss of $174 million in the prior year.

Net revenue was $3.7 billion, compared with $80 million in the prior year, driven by higher net interest income due to higher rates, partially offset by lower Firmwide average deposit balances available for deployment in Treasury and CIO .

Noninterest revenue was $2.0 billion, compared with a loss of $244 million in the prior year, driven by:

•a $2.7 billion estimated bargain purchase gain associated with the First Republic acquisition

•higher revenue related to cash deployment transactions in Treasury and CIO, and

•higher losses in the prior year on certain revenues associated with foreign exchange rate movements,

partially offset by

•higher net investment securities losses on sales of U.S. Treasuries and U.S. GSE and government agency MBS, associated with repositioning the investment securities portfolio, and

•net losses on certain legacy private equity investments in Corporate, compared with net gains in the prior year

Noninterest expense of $1.2 billion was up $946 million driven by expense of $562 million associated with the First Republic acquisition, higher legal expense, and a greater benefit in the prior year on certain expenses associated with foreign exchange rate movements.

The net impact of movements in foreign exchange rates associated with the foreign exchange risk that was transferred to Treasury and CIO on certain revenues and

expense were not material to net income. Refer to Foreign Exchange Risk on page 22 for additional information.

The provision for credit losses was a net benefit of $243 million, reflecting a reduction in the allowance for credit losses associated with the deposit placed with First Republic Bank in the first quarter of 2023.

Refer to Note 10 for additional information on the investment securities portfolio, and Note 13 for additional information on the allowance for credit losses.

The current period tax expense benefited from the income tax expense associated with the First Republic acquisition reflected in the estimated bargain purchase gain, partially offset by changes in the level and mix of income and expenses subject to U.S. federal and state and local taxes that also impact the Firm’s tax reserves.

Year-to-date results

Net income was $2.9 billion, compared with a net loss of $1.0 billion in the prior year.

Net revenue was $4.7 billion, compared with a loss of $801 million in the prior year, driven by higher net interest income due to higher rates, partially offset by lower Firmwide average deposit balances available for deployment in Treasury and CIO.

Noninterest revenue was $1.2 billion, compared with a loss of $589 million, driven by:

•a $2.7 billion estimated bargain purchase gain associated with the First Republic acquisition,

•higher revenue related to cash deployment transactions in Treasury and CIO, and

•higher losses in the prior year on certain revenues associated with foreign exchange rate movements,

partially offset by

•higher net investment securities losses related to the sales of U.S. Treasuries and U.S. GSE and government agency MBS, associated with repositioning the investment securities portfolio,

•the absence of proceeds in the prior year from an insurance settlement, and

•lower net gains related to certain other Corporate investments.

Noninterest expense of $1.3 billion was up $922 million driven by expense of $562 million associated with the First Republic acquisition , higher legal expense, and a greater benefit in the prior year on certain expenses associated with foreign exchange rate movements.

The net impact of movements in foreign exchange rates associated with the foreign exchange risk that was transferred to Treasury and CIO on certain revenues and expense were not material to net income. Refer to Foreign Exchange Risk on page 22 for additional information.

The current period tax expense benefited from the income tax expense associated with the First Republic acquisition reflected in the estimated bargain purchase gain, largely offset by changes in the level and mix of income and expenses subject to U.S. federal and state and local taxes that also impact the Firm’s tax reserves.

Other Corporate also reflects the Firm's international consumer initiatives, which includes Chase U.K., the Firm's digital retail bank in the U.K.; Nutmeg, a digital wealth manager in the U.K.; and a 40% ownership stake in C6 Bank, a digital bank in Brazil.

Treasury and CIO overview

At June 30, 2023, the average credit rating of the Treasury and CIO investment securities comprising the portfolio in the table below was AA+ (based upon external ratings where available and, where not available, based primarily upon internal risk ratings). Refer to Note 10 for further information on the Firm’s investment securities portfolio and internal risk ratings.

Refer to Liquidity Risk Management on pages 54-61 for further information on liquidity and funding risk. Refer to Market Risk Management on pages 84-89 for information on interest rate and foreign exchange risks.


Selected income statement and balance sheet data
	As of or for the three months ended June 30,							As of or for the six months ended June 30,
(in millions)	2023			2022		Change		2023			2022		Change
Investment securities losses	$	(900)		$	(153)	(488)	%	$	(1,768)		$	(547)	(223)	%
Available-for-sale securities (average)	$	198,620		$	252,121	(21)		$	200,687		$	278,073	(28)
Held-to-maturity securities (average)(a)	410,594			418,843		(2)		413,953			391,978		6
Investment securities portfolio (average)	$	609,214		$	670,964	(9)		$	614,640		$	670,051	(8)
Available-for-sale securities (period-end)	$	201,211	(c)	$	220,213	(9)		$	201,211	(c)	$	220,213	(9)
Held-to-maturity securities (period-end)(a)	408,941			441,649		(7)		408,941			441,649		(7)
Investment securities portfolio, net of allowance for credit losses (period-end)(b)	$	610,152		$	661,862	(8)	%	$	610,152		$	661,862	(8)	%

(a)Effective January 1, 2023, the Firm adopted new hedge accounting guidance. As permitted by the guidance, the Firm elected to transfer $7.1 billion of HTM securities to AFS. During 2022, the Firm transferred $78.3 billion of investment securities from AFS to HTM for capital management purposes. Refer to Note 1 and Note 10 for additional information on the new hedge accounting guidance.

(b)As of June 30, 2023 and 2022, the allowance for credit losses on investment securities was $74 million and $47 million, respectively.

(c)As of June 30, 2023, included $25.8 billion of AFS securities associated with the First Republic acquisition. Refer to Note 28 for additional information.

FIRMWIDE RISK MANAGEMENT

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

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

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

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

•A Firmwide risk governance and oversight structure.

The Firm follows a disciplined and balanced compensation framework with strong internal governance and independent oversight by the Board of Directors (the “Board”). The impact of risk and control issues is carefully considered in the Firm’s performance evaluation and incentive compensation processes.

Risk governance framework

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

Refer to pages 81-84 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of Firmwide risk management governance and oversight.

Risk governance and oversight functions

The following sections of this Form 10-Q and the 2022 Form 10-K discuss the risk governance and oversight functions in place to manage the risks inherent in the Firm’s business activities.


Risk governance and oversight functions	Form 10-Q page reference	Form 10-K page reference
Strategic Risk		85
Capital Risk	48–53	86-96
Liquidity Risk	54–61	97-104
Reputation Risk		105
Consumer Credit Risk	65–69	110-115
Wholesale Credit Risk	70–79	116-126
Investment Portfolio Risk	83	130
Market Risk	84–89	131-138
Country Risk	90	139-140
Climate Risk		141
Operational Risk		142-148
Compliance Risk		145
Conduct Risk		146
Legal Risk		147
Estimations and Model Risk		148

CAPITAL RISK MANAGEMENT

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

Refer to pages 86-96 of JPMorgan Chase’s 2022 Form 10-K, Note 23 of this Form 10-Q and the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for a further discussion of the Firm’s capital risk.

Basel III Overview

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

Basel III also includes a requirement for Advanced Approaches banking organizations, including the Firm, to calculate its SLR. Refer to SLR on page 51 for additional information.

Key Regulatory Developments

CECL regulatory capital transition

Beginning January 1, 2022, the $2.9 billion CECL capital benefit, provided by the Federal Reserve in response to the COVID-19 pandemic, is being phased out at 25% per year over a three-year period. As of June 30, 2023, the Firm's CET1 capital reflected the remaining $1.4 billion benefit associated with the CECL capital transition provisions.

Additionally, effective January 1, 2023, the Firm phased out 50% of the other CECL capital transition provisions which impacted Tier 2 capital, adjusted average assets, total leverage exposure and RWA, as applicable.

Refer to Capital Risk Management on pages 86-96 and Note 1 of JPMorgan Chase’s 2022 Form 10-K for further information on CECL capital transition provisions and the CECL accounting guidance.

Risk-based Capital Targets

The Firm’s target for its Basel III Standardized CET1 capital ratio for the first quarter of 2024 remains at 13.5%. The Firm’s quarterly capital ratios may vary from the target dependent on market conditions. The target is based on the Basel III capital rules currently in effect.

Basel III Finalization

In July 2023, the Federal Reserve, the OCC and the FDIC released a proposal to amend the risk-based capital framework, entitled "Regulatory capital rule: Amendments applicable to large banking organizations and to banking organizations with significant trading activity". Under the proposal, changes would include replacement of the advanced approach with an expanded risk-based approach, which would not permit the use of internal models for the calculation of risk-weighted assets, other than for Market risk. In addition, the stress capital buffer requirement would be applicable to both the expanded risk-based approach and the standardized approach. The proposal would significantly revise risk-based capital requirements for all banks with assets of $100 billion or more, including the Firm and other U.S. GSIBs. The proposed effective date is July 1, 2025 with a three year transition period applicable to the expanded risk-based approach.

GSIB Surcharge

In July 2023, the Federal Reserve also released a proposal to amend the calculation of the GSIB surcharge. If adopted as proposed, these amendments would require the Firm to assess its GSIB surcharge on an annual basis, using the average of the quarterly surcharge calculations throughout the calendar year, with daily averaging required for certain measures within the surcharge calculation. Surcharge increments would be reduced from 50bp to 10bp and there would also be other technical amendments to the Method 2 calculation. The proposed amendments would revise risk-based capital requirements for the Firm and other U.S. GSIBs, and would become effective on two calendar quarters after the adoption of the final rule. Refer to Risk-based Capital Regulatory Requirements on pages 89-90 of JPMorgan Chase’s 2022 Form 10-K for further information on the GSIB surcharge.

The following tables present the Firm’s risk-based capital metrics under both the Basel III Standardized and Advanced approaches and leverage-based capital metrics. Refer to Capital Risk Management on pages 86-96 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of these capital metrics. Refer to Note 23 for JPMorgan Chase Bank, N.A.’s risk-based and leverage-based capital metrics. First Republic Bank was not subject to Advanced approach regulatory capital requirements. As a result, for certain exposures associated with the First Republic acquisition, Advanced RWA and any impact on Advanced Total capital is calculated under the Standardized approach as permitted by the transition provisions in the U.S. capital rules. Refer to Note 28 for additional information on the First Republic acquisition.


	Standardized								Advanced
(in millions, except ratios)	June 30, 2023			December 31, 2022			Capital ratio requirements(b)		June 30, 2023				December 31, 2022			Capital ratio requirements(b)
Risk-based capital metrics:(a)
CET1 capital	$	235,827		$	218,934				$	235,827			$	218,934
Tier 1 capital	262,585			245,631					262,585				245,631
Total capital	295,281			277,769					281,953			(c)	264,583
Risk-weighted assets	1,706,927			1,653,538					1,694,714			(c)	1,609,773
CET1 capital ratio	13.8		%	13.2		%	12.5	%	13.9		%		13.6		%	11.0	%
Tier 1 capital ratio	15.4			14.9			14.0		15.5				15.3			12.5
Total capital ratio	17.3			16.8			16.0		16.6				16.4			14.5

(a)The capital metrics reflect the CECL capital transition provisions.

(b)Represents minimum requirements and regulatory buffers applicable to the Firm for the period ended June 30, 2023. For the period ended December 31, 2022, the Basel III Standardized CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were 12.0%, 13.5%, and 15.5%, respectively; the Basel III Advanced CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were 10.5%, 12.0%, and 14.0%, respectively. Refer to Note 23 for additional information.

(c)Includes the impacts of certain assets associated with the First Republic acquisition to which the Standardized approach has been applied as permitted by the transition provisions in the U.S. capital rules.


Three months ended (in millions, except ratios)	June 30, 2023			December 31, 2022			Capital ratio requirements(c)
Leverage-based capital metrics:(a)
Adjusted average assets(b)	$	3,796,579		$	3,703,873
Tier 1 leverage ratio	6.9		%	6.6		%	4.0	%
Total leverage exposure	$	4,492,761		$	4,367,092
SLR	5.8		%	5.6		%	5.0	%

(a)The capital metrics reflect the CECL capital transition provisions.

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

(c)Represents minimum requirements and regulatory buffers applicable to the Firm. Refer to Note 23 for additional information.

Capital components

The following table presents reconciliations of total stockholders’ equity to Basel III CET1 capital, Tier 1 capital and Total capital as of June 30, 2023 and December 31, 2022.


(in millions)	June 30, 2023			December 31, 2022
Total stockholders’ equity	$	312,516		$	292,332
Less: Preferred stock	27,404			27,404
Common stockholders’ equity	285,112			264,928
Add:
Certain deferred tax liabilities(a)	3,097			2,510
Other CET1 capital adjustments(b)	5,586			6,221
Less:
Goodwill(c)	54,339			53,501
Other intangible assets	3,629			1,224

Standardized/Advanced CET1 capital	$	235,827		$	218,934
Add: Preferred stock	27,404			27,404
Less: Other Tier 1 adjustments	646			707
Standardized/Advanced Tier 1 capital	$	262,585		$	245,631
Long-term debt and other instruments qualifying as Tier 2 capital	$	13,424		$	13,569
Qualifying allowance for credit losses(d)	20,459			19,353
Other	(1,187)			(784)
Standardized Tier 2 capital	$	32,696		$	32,138
Standardized Total capital	$	295,281		$	277,769
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(e)	(13,328)		(f)	(13,186)
Advanced Tier 2 capital	$	19,368		$	18,952
Advanced Total capital	$	281,953		$	264,583

(b)As of June 30, 2023 and December 31, 2022, included a net benefit associated with cash flow hedges and debit valuation adjustments ("DVA") related to structured notes recorded in AOCI of $5.3 billion and $5.2 billion and the benefit from the CECL capital transition provisions of $1.4 billion and $2.2 billion, respectively.

(c)Goodwill deducted from capital includes goodwill associated with equity method investments in nonconsolidated financial institutions based on regulatory requirements. Refer to Principal investment risk on page 83 for additional information.

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

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

(f)Included an incremental $714 million allowance for credit losses on certain assets associated with the First Republic acquisition to which the Standardized approach has been applied, as permitted by the transition provisions in the U.S. capital rules.

Capital rollforward

The following table presents the changes in Basel III CET1 capital, Tier 1 capital and Tier 2 capital for the six months ended June 30, 2023.


Six months ended June 30, (in millions)	2023
Standardized/Advanced CET1 capital at December 31, 2022	$	218,934
Net income applicable to common equity	26,365
Dividends declared on common stock	(5,911)
Net purchase of treasury stock	(4,304)
Changes in additional paid-in capital	534
Changes related to AOCI applicable to capital:
Unrealized gains/(losses) on investment securities	2,969
Translation adjustments, net of hedges(a)	267
Fair value hedges	(10)
Defined benefit pension and other postretirement employee benefit (“OPEB”) plans	(61)
Changes related to other CET1 capital adjustments(b)	(2,956)
Change in Standardized/Advanced CET1 capital	16,893
Standardized/Advanced CET1 capital at June 30, 2023	$	235,827
Standardized/Advanced Tier 1 capital at December 31, 2022	$	245,631
Change in CET1 capital(b)	16,893
Redemptions of noncumulative perpetual preferred stock	—
Other	61
Change in Standardized/Advanced Tier 1 capital	16,954
Standardized/Advanced Tier 1 capital at June 30, 2023	$	262,585
Standardized Tier 2 capital at December 31, 2022	$	32,138
Change in long-term debt and other instruments qualifying as Tier 2	(145)
Change in qualifying allowance for credit losses(b)	1,106
Other	(403)
Change in Standardized Tier 2 capital	558
Standardized Tier 2 capital at June 30, 2023	$	32,696
Standardized Total capital at June 30, 2023	$	295,281
Advanced Tier 2 capital at December 31, 2022	$	18,952
Change in long-term debt and other instruments qualifying as Tier 2	(145)
Change in qualifying allowance for credit losses(b)(c)	964
Other	(403)
Change in Advanced Tier 2 capital	416
Advanced Tier 2 capital at June 30, 2023	$	19,368
Advanced Total capital at June 30, 2023	$	281,953

(a)Includes foreign currency translation adjustments and the impact of related derivatives.

(b)Includes the impact of the CECL capital transition provisions and the cumulative effect of changes in accounting principles. Refer to Note 1 for additional information.

(c)Included an incremental $714 million allowance for credit losses on certain assets associated with the First Republic acquisition to which the Standardized approach has been applied, as permitted by the transition provisions in the U.S. capital rules.

RWA rollforward

The following table presents changes in the components of RWA under Basel III Standardized and Advanced approaches for the six months ended June 30, 2023. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.


	Standardized						Advanced
Six months ended June 30, 2023 (in millions)	Credit risk RWA(c)		Market risk RWA		Total RWA		Credit risk RWA(c)(d)		Market risk RWA		Operational risk RWA		Total RWA
December 31, 2022	$	1,568,536	$	85,002	$	1,653,538	$	1,078,076	$	85,432	$	446,265	$	1,609,773
Model & data changes(a)	(6,013)		(3,592)		(9,605)		(3,772)		(3,592)		—		(7,364)
Movement in portfolio levels(b)	70,207		(7,213)		62,994		102,745		(7,487)		(2,953)		92,305
Changes in RWA	64,194		(10,805)		53,389		98,973		(11,079)		(2,953)		84,941
June 30, 2023	$	1,632,730	$	74,197	$	1,706,927	$	1,177,049	$	74,353	$	443,312	$	1,694,714

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

(b)Movement in portfolio levels (inclusive of rule changes) refers to: for Credit risk RWA, changes in book size, impacts associated with the First Republic acquisition including the benefit of the shared-loss agreements entered into with the FDIC, position rolloffs in legacy portfolios in Home Lending, changes in composition and credit quality, market movements, and deductions for excess eligible credit reserves not eligible for inclusion in Tier 2 capital; for Market risk RWA, changes in position, market movements, and changes in the Firm’s regulatory multiplier from Regulatory VaR backtesting exceptions; and for Operational risk RWA, updates to cumulative losses and macroeconomic model inputs.

(c)As of June 30, 2023 and December 31, 2022, the Basel III Standardized Credit risk RWA included wholesale and retail off balance-sheet RWA of $221.2 billion and $210.1 billion, respectively; and the Basel III Advanced Credit risk RWA included wholesale and retail off balance-sheet RWA of $199.0 billion and $180.8 billion, respectively.

(d)As of June 30, 2023, Credit risk RWA reflected approximately $57.1 billion of RWA calculated under the Standardized approach for certain assets associated with the First Republic acquisition as permitted by the transition provisions in the U.S. capital rules.

Refer to the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for further information on Credit risk RWA, Market risk RWA and Operational risk RWA.

Supplementary leverage ratio

Refer to Supplementary Leverage Ratio on page 93 of JPMorgan Chase’s 2022 Form 10-K for additional information.

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


Three months ended (in millions, except ratio)	June 30, 2023			December 31, 2022
Tier 1 capital	$	262,585		$	245,631
Total average assets	3,851,388			3,755,271
Less: Regulatory capital adjustments(a)	54,809			51,398
Total adjusted average assets(b)	3,796,579			3,703,873
Add: Off-balance sheet exposures(c)	696,182			663,219
Total leverage exposure	$	4,492,761		$	4,367,092
SLR	5.8		%	5.6		%

(a)For purposes of calculating the SLR, includes quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill, inclusive of estimated equity method goodwill, other intangible assets and adjustments for the CECL capital transition provisions.

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

(c)Off-balance sheet exposures are calculated as the average of the three month-end spot balances on applicable regulatory exposures during the reporting quarter. Refer to the Firm’s Pillar 3 Regulatory Capital Disclosures reports for additional information.

Line of business equity

Each business segment is allocated capital by taking into consideration a variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. As of June 30, 2023, the Firm updated its line of business capital allocations to reflect the impact of the First Republic acquisition.

Refer to line of business equity on page 93 of JPMorgan Chase’s 2022 Form 10-K for additional information on capital allocation.

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


Line of business equity (Allocated capital)
(in billions)	June 30, 2023		March 31, 2023		December 31, 2022
Consumer & Community Banking	$	55.5	$	52.0	$	50.0
Corporate & Investment Bank	108.0		108.0		103.0
Commercial Banking	30.0		28.5		25.0
Asset & Wealth Management	17.0		16.0		17.0
Corporate	74.6		71.2		69.9
Total common stockholders’ equity	$	285.1	$	275.7	$	264.9

Capital actions

Common stock dividends

The Firm’s quarterly common stock dividend is currently $1.00 per share. On June 30, 2023, the Firm announced that its Board of Directors intends to increase the quarterly common stock dividend to $1.05 per share, effective in the third quarter of 2023. The Firm’s dividends are subject to approval by the Board of Directors on a quarterly basis.

Common stock

The Firm is authorized to purchase up to $30 billion under its common share repurchase program previously approved by the Board of Directors.

The following table sets forth the Firm’s repurchases of common stock for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Total number of shares of common stock repurchased	16.7		5.0		38.7		23.1
Aggregate purchase price of common stock repurchases	$	2,293	$	622	$	5,233	$	3,122

Refer to Capital actions on page 94 of JPMorgan Chase’s 2022 Form 10-K for additional information.

Refer to Part II, Item 2: Unregistered Sales of Equity Securities and Use of Proceeds and Part II, Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities on pages 209–210 of this Form 10-Q and page 34 of JPMorgan Chase’s 2022 Form 10-K, respectively, for additional information regarding repurchases of the Firm’s equity securities.

Preferred stock

Preferred stock dividends declared were $373 million and $410 million, and $729 million and $807 million, for the three and six months ended June 30, 2023 and 2022, respectively.

Refer to Note 19 of this Form 10-Q and Note 21 of JPMorgan Chase’s 2022 Form 10-K for additional information on the Firm’s preferred stock, including the issuance and redemption of preferred stock.

Subordinated Debt

Refer to Long-term funding and issuance on page 60 and Note 18 for additional information on the Firm’s subordinated debt.

Capital planning and stress testing

Comprehensive Capital Analysis and Review

On April 5, 2023, the Firm submitted its 2023 Capital Plan to the Federal Reserve. On June 30, 2023, the Firm announced that it had completed the Federal Reserve's 2023 Comprehensive Capital Analysis and Review (“CCAR”) stress test process.

On July 27, 2023, the Federal Reserve announced the Firm's 2023 SCB requirement of 2.9% (down from the current 4.0%), which will result in a Standardized CET1

capital ratio requirement, including regulatory buffers, of 11.4% (down from the current 12.5%) for the fourth quarter of 2023. The SCB requirement will become effective on October 1, 2023 and will remain in effect until September 30, 2024.

Refer to Capital planning and stress testing on pages 86-87 of JPMorgan Chase’s 2022 Form 10-K for additional information on CCAR.

Other capital requirements

Total Loss-Absorbing Capacity

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

The following table presents the eligible external TLAC and eligible LTD amounts, as well as a representation of these amounts as a percentage of the Firm’s total RWA and total leverage exposure applying the impact of the CECL capital transition provisions as of June 30, 2023 and December 31, 2022.


	June 30, 2023						December 31, 2022
(in billions, except ratio)	External TLAC			LTD			External TLAC			LTD
Total eligible amount	$	493.8		$	218.2		$	486.0		$	228.5
% of RWA	28.9		%	12.8		%	29.4		%	13.8		%
Regulatory requirements	23.0			10.0			22.5			9.5
Surplus/(shortfall)	$	101.2		$	47.6		$	114.0		$	71.4
% of total leverage exposure	11.0		%	4.9		%	11.1		%	5.2		%
Regulatory requirements	9.5			4.5			9.5			4.5
Surplus/(shortfall)	$	66.9		$	16.1		$	71.2		$	32.0

Effective January 1, 2023, the Firm's regulatory requirements for TLAC to RWA and LTD to RWA ratios increased by 50 bps to 23.0% and 10.0%, respectively, due to the increase in the Firm’s GSIB requirements. Refer to Risk-based Capital Regulatory Requirements on pages 89-90 of JPMorgan Chase’s 2022 Form 10-K for further information on the GSIB surcharge.

Refer to Liquidity Risk Management on pages 54-61 for further information on long-term debt issued by the Parent Company.

Refer to Part I, Item 1A: Risk Factors on pages 9-32 of JPMorgan Chase’s 2022 Form 10-K for information on the financial consequences to holders of the Firm’s debt and equity securities in a resolution scenario.

Refer to other capital requirements on page 95 of JPMorgan Chase’s 2022 Form 10-K for additional information on TLAC.

U.S. broker-dealer regulatory capital

J.P. Morgan Securities

JPMorgan Chase’s principal U.S. broker-dealer subsidiary is J.P. Morgan Securities. J.P. Morgan Securities is subject to the regulatory capital requirements of Rule 15c3-1 under the Securities Exchange Act of 1934 (the “Net Capital Rule”). J.P. Morgan Securities is also registered as a futures commission merchant and is subject to regulatory capital requirements, including those imposed by the SEC, the Commodity Futures Trading Commission (“CFTC”), the Financial Industry Regulatory Authority (“FINRA”) and the National Futures Association (“NFA”).

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


June 30, 2023
(in millions)	Actual		Minimum
Net Capital	$	24,578	$	5,593

Non-U.S. subsidiary regulatory capital

J.P. Morgan Securities plc

J.P. Morgan Securities plc is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and has authority to engage in banking, investment banking and broker-dealer activities. J.P. Morgan Securities plc is jointly regulated in the U.K. by the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”). J.P. Morgan Securities plc is subject to the European Union (“EU”) Capital Requirements Regulation (“CRR”), as adopted in the U.K., and the PRA capital rules, each of which have implemented Basel III and thereby subject J.P. Morgan Securities plc to its requirements.

The Bank of England requires that U.K. banks, including U.K. regulated subsidiaries of overseas groups, maintain minimum requirements for own funds and eligible liabilities (“MREL”). As of June 30, 2023, J.P. Morgan Securities plc was compliant with its MREL requirements.

Effective January 1, 2023, J.P. Morgan Securities plc was required to meet the minimum leverage capital requirement established by the PRA of 3.25%, plus regulatory buffers.

The following table presents J.P. Morgan Securities plc’s risk-based and leverage-based capital metrics:


June 30, 2023				Regulatory Minimum ratios(a)
(in millions, except ratios)	Estimated
Total capital	$	55,711
CET1 capital ratio	17.1		%	4.5	%
Tier 1 capital ratio	22.1			6.0
Total capital ratio	28.2			8.0

Tier 1 leverage ratio	7.0			3.3		(b)

(a)Represents minimum Pillar 1 requirements specified by the PRA. J.P. Morgan Securities plc's capital ratios as of June 30, 2023 exceeded the minimum requirements, including the additional capital requirements specified by the PRA.

(b)At least 75% of the Tier 1 leverage ratio minimum must be met with CET1 capital.

J.P. Morgan SE

JPMSE is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and has authority to engage in banking, investment banking and markets activities. JPMSE is regulated by the European Central Bank as well as the local regulators in each of the countries in which it operates, and it is subject to EU capital requirements under Basel III.

JPMSE is required by the EU Single Resolution Board to maintain MREL. As of June 30, 2023, JPMSE was compliant with its MREL requirements.

The following table presents JPMSE’s risk-based and leverage-based capital metrics:


June 30, 2023				Regulatory Minimum ratios(a)
(in millions, except ratios)	Estimated
Total capital	$	43,524
CET1 capital ratio	19.9		%	4.5	%
Tier 1 capital ratio	19.9			6.0
Total capital ratio	35.4			8.0
Tier 1 leverage ratio	5.5			3.0

(a)Represents minimum Pillar 1 requirements specified by the EU CRR. J.P. Morgan SE’s capital and leverage ratios as of June 30, 2023 exceeded the minimum requirements, including the additional capital requirements specified by EU regulators.

Refer to U.S. broker-dealer and Non-U.S. subsidiary regulatory capital on page 96 of JPMorgan Chase’s 2022 Form 10-K for further information.

LIQUIDITY RISK MANAGEMENT

Liquidity risk is the risk that the Firm will be unable to meet its contractual and contingent financial obligations as they arise or that it does not have the appropriate amount, composition and tenor of funding and liquidity to support its assets and liabilities. Refer to pages 97-104 of JPMorgan Chase’s 2022 Form 10-K and the Firm’s U.S. LCR Disclosure reports, which are available on the Firm’s website, for a further discussion of the Firm’s liquidity risk.

LCR and HQLA

The LCR rule requires that the Firm and JPMorgan Chase Bank, N.A. maintain an amount of eligible HQLA that is sufficient to meet their respective estimated total net cash outflows over a prospective 30 calendar-day period of significant stress.

Under the LCR rule, the amount of eligible HQLA held by JPMorgan Chase Bank, N.A. that is in excess of its stand-alone 100% minimum LCR requirement, and that is not transferable to non-bank affiliates, must be excluded from the Firm’s reported eligible HQLA. The LCR for both the Firm and JPMorgan Chase Bank, N.A. is required to be a minimum of 100%.

The following table summarizes the Firm and JPMorgan Chase Bank, N.A.’s average LCR for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022 based on the Firm’s interpretation of the LCR framework.


	Three months ended
Average amount (in millions)	June 30, 2023			March 31, 2023			June 30, 2022
JPMorgan Chase & Co.:
HQLA
Eligible cash(a)	$	440,294		$	453,287		$	634,480
Eligible securities(b)(c)	327,837			278,223			107,473
Total HQLA(d)(e)	$	768,131		$	731,510		$	741,953
Net cash outflows	$	683,446		$	642,650		$	676,234
LCR	112		%	114		%	110		%
Net excess eligible HQLA(d)	$	84,685		$	88,860		$	65,719
JPMorgan Chase Bank N.A.:
LCR	129		%	140		%	169		%
Net excess eligible HQLA	$	211,233		$	278,651		$	487,867

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

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

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

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

(e)End-of-period HQLA balances were $791.5 billion, $758.9 billion, and $721.1 billion for June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

The Firm’s average LCR decreased during the three months ended June 30, 2023, compared with the three months period ended March 31, 2023, due to long-term debt maturities, common stock repurchases and common stock

dividends paid, predominantly offset by a dividend payment from JPMorgan Chase Bank, N.A. to the Parent Company.

The Firm's average LCR increased during the three months ended June 30, 2023, compared with the prior year period, driven by dividend payments from JPMorgan Chase Bank, N.A. to the Parent Company, partially offset by common stock repurchases and common stock dividends paid.

JPMorgan Chase Bank, N.A.'s average LCR decreased during the three months ended June 30, 2023, compared with the three months ended March 31, 2023, reflecting an approximate 50% decline associated with the First Republic acquisition, reducing HQLA and increasing net cash outflows. JPMorgan Chase Bank, N.A.’s HQLA was further impacted by a reduction in cash primarily driven by higher average loans, a dividend payment to the Parent Company, and a decline in average deposits.

JPMorgan Chase Bank, N.A.’s average LCR for the three months ended June 30, 2023 decreased when compared with the same period in the prior year, reflecting a decrease in JPMorgan Chase Bank, N.A.’s HQLA as a result of a reduction in cash from a decline in average deposits and loan growth, as well as lower market values of HQLA-eligible investment securities and the impact of the First Republic acquisition.

Refer to Note 10 and Note 28 for additional information on the Firm's investment securities portfolio and the First Republic acquisition.

Actions by the Federal Reserve have impacted depositor behavior, resulting in reductions to system-wide deposits, including those held by the Firm. Each of the Firm and JPMorgan Chase Bank, N.A.'s average LCR may fluctuate from period to period due to changes in their respective eligible HQLA and estimated net cash outflows as a result of ongoing business activity and from the continued impacts of Federal Reserve actions as well as other factors.

Refer to page 98 of JPMorgan Chase’s 2022 Form 10-K and the Firm’s U.S. LCR Disclosure reports for additional information on HQLA and net cash outflows.

Internal stress testing

The Firm conducts internal liquidity stress testing that is intended to ensure that the Firm and its material legal entities have sufficient liquidity under a variety of adverse scenarios, including scenarios analyzed as part of the Firm’s resolution and recovery planning. Internal Stress scenarios are produced on a regular basis, and other stress tests are performed in response to specific market events or concerns. Results of stress tests are considered in the formulation of the Firm’s funding plan and assessment of its liquidity position.

The Firm maintains liquidity at the Parent Company, the Intermediate Holding Company (“IHC”), and operating subsidiaries at levels sufficient to comply with liquidity risk tolerances and minimum liquidity requirements, and to

manage through periods of stress when access to normal funding sources may be disrupted.

Other liquidity sources

In addition to the assets reported in the Firm’s eligible HQLA discussed above, the Firm had unencumbered marketable securities, such as equity and debt securities, that the Firm believes would be available to raise liquidity. This includes excess eligible HQLA securities at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates. The fair value of these securities was approximately $620 billion and $694 billion as of June 30, 2023 and December 31, 2022, respectively, although the amount of liquidity that could be raised at any particular time would be dependent on prevailing market conditions. The decrease compared to December 31, 2022, was driven by a reduction in excess eligible HQLA securities at JPMorgan Chase Bank, N.A., largely offset by an increase in CIB trading assets and AFS securities associated with the First Republic acquisition.

The Firm also had available borrowing capacity at the Federal Home Loan Banks (“FHLBs”) and the discount window at the Federal Reserve Banks as a result of collateral pledged by the Firm to such banks of approximately $332 billion and $323 billion as of June 30, 2023 and December 31, 2022, respectively. This borrowing capacity excludes the benefit of cash and securities reported in the Firm’s eligible HQLA or other unencumbered securities that are currently pledged at the Federal Reserve Banks discount window and other central banks. Although available, the Firm does not view this borrowing capacity at the Federal Reserve Banks discount window and the other central banks as a primary source of liquidity.

NSFR

The net stable funding ratio (“NSFR”) is a liquidity requirement for large banking organizations that is intended to measure the adequacy of “available” stable funding that is sufficient to meet their “required” amounts of stable funding over a one-year horizon.

As of June 30, 2023, the Firm and JPMorgan Chase Bank, N.A. were compliant with the 100% minimum NSFR requirement, based on the Firm's current interpretation of the final rule. By the end of August 2023, the Firm will be required to publicly disclose its quarterly average NSFR on a semiannual basis.

Funding

Sources of funds

Management believes that the Firm’s unsecured and secured funding capacity is sufficient to meet its on- and off-balance sheet obligations, which includes both short- and long-term cash requirements.

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

Firm’s non-bank subsidiaries are primarily funded from long-term unsecured borrowings and short-term secured borrowings which are primarily securities loaned or sold under repurchase agreements. Excess funding is invested by Treasury and CIO in the Firm’s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk characteristics.

Refer to Note 24 for additional information on off-balance sheet obligations.

Deposits

The table below summarizes, by LOB and Corporate, the period-end deposit balances as of June 30, 2023, and December 31, 2022, and the average deposit balances for the three and six months ended June 30, 2023 and 2022, respectively.


	June 30, 2023		December 31, 2022		Three months ended June 30,				Six months ended June 30,
					Average				Average
(in millions)					2023		2022		2023		2022
Consumer & Community Banking	$	1,173,514	$	1,131,611	$	1,157,309	$	1,180,453	$	1,135,261	$	1,167,057
Corporate & Investment Bank	735,576		689,893		722,818		773,664		711,266		765,200
Commercial Banking	269,026		271,342		275,196		300,339		270,595		308,518
Asset & Wealth Management	199,763		233,130		211,872		268,861		218,078		278,256
Corporate	21,083		14,203		20,219		8,995		18,931		4,948
Total Firm	$	2,398,962	$	2,340,179	$	2,387,414	$	2,532,312	$	2,354,131	$	2,523,979

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

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

Average deposits were lower for the three months ended June 30, 2023 compared to the three months ended June 30, 2022. The decrease was driven by:

•the continued migration into higher-yielding investments in AWM as a result of the rising interest rate environment,

•continued deposit attrition in CIB, including actions to reduce certain deposits, partially offset by net issuances of structured notes as a result of client demand,

•continued deposit attrition in CB, partially offset by continued inflows as a result of disruptions in the market in the first quarter of 2023, and

•a net decline in CCB primarily from existing accounts due to increased customer spending, largely offset by the impact of the First Republic acquisition,

partially offset by

•an increase in Corporate related to the Firm's international consumer initiatives.

Average deposits were lower for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The decrease was driven by:

•the continued migration into higher-yielding investments in AWM as a result of the rising interest rate environment,

•continued deposit attrition in CIB, including actions to reduce certain deposits, partially offset by net issuances of structured notes as a result of client demand,

•continued deposit attrition in CB, partially offset by continued inflows as a result of disruptions in the market in the first quarter of 2023, and

•a net decline in CCB primarily from existing accounts due to increased customer spending, partially offset by the impact of the First Republic acquisition,

partially offset by

•an increase in Corporate related to the Firm's international consumer initiatives.

Period-end deposits increased, reflecting:

•increases in CIB due to deposit inflows related to client-driven activities and net issuances of structured notes as a result of client demand,

•$68 billion of deposits in CCB associated with the First Republic acquisition, partially offset by a net decline primarily in existing accounts due to increased customer spending, and

•an increase in Corporate related to the Firm's international consumer initiatives,

partially offset by

•the continued migration into higher-yielding investments in AWM as a result of the rising interest rate environment, and

•ongoing attrition in CB driven by higher rates and seasonal outflows, predominantly offset by inflows as a result of disruptions in the market in the first quarter of 2023.

Refer to the Firm’s Consolidated Balance Sheets Analysis and the Business Segment Results on pages 16-19 and pages 22-46, respectively, for further information on deposit and liability balance trends. Refer to Note 3 for further information on structured notes.

Certain deposits are covered by insurance protection that provides additional funding stability and results in a benefit to the LCR. Deposit insurance protection may be available to depositors in the countries in which the deposits are placed. For example, the FDIC provides deposit insurance protection for deposits placed in a U.S. depository institution. At June 30, 2023 and December 31, 2022(a), the Firmwide estimated uninsured deposits were $1,381.1 billion and $1,353.1 billion, respectively, primarily reflecting wholesale operating deposits.

Total uninsured deposits include time deposits. The table below presents an estimate of uninsured U.S. and non-U.S. time deposits, and their remaining maturities. The Firm’s estimates of its uninsured U.S. time deposits are based on data that the Firm calculates periodically under applicable FDIC regulations. For purposes of this presentation, all non-U.S. time deposits are deemed to be uninsured.


(in millions)	June 30, 2023				December 31, 2022
	U.S.		Non-U.S.		U.S.			Non-U.S.
Three months or less	$	33,242	$	74,455	$	25,910	(a)	$	68,765
Over three months but within 6 months	15,044		5,452		8,670			3,658
Over six months but within 12 months	8,014		3,524		7,035			2,850
Over 12 months	770		2,506		787			2,634
Total	$	57,070	$	85,937	$	42,402		$	77,907

(a)Prior-period amounts for the Firmwide estimated uninsured deposits, including uninsured U.S. time deposits, have been revised to conform with the current presentation, reflecting refinements to the calculation.

Refer to pages 100-101 of JPMorgan Chase's 2022 Form 10-K for additional disclosure on the Firm's deposit balances.

The table below shows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of total liabilities, as of June 30, 2023 and December 31, 2022.


(in billions except ratios)	June 30, 2023			December 31, 2022
Deposits	$	2,399.0		$	2,340.2
Deposits as a % of total liabilities	67		%	69		%
Loans	$	1,300.1		$	1,135.6
Loans-to-deposits ratio	54		%	49		%

The following tables provide a summary of the average balances and average interest rates of JPMorgan Chase’s deposits for the three and six months ended June 30, 2023 and 2022.


(Unaudited) (in millions)	Average balances
	Three months ended				Six months ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
U.S. offices
Noninterest-bearing	$	646,767	$	713,059	$	635,748	$	709,294
Interest-bearing
Demand(a)	286,453		352,081		283,524		346,005
Savings(b)	883,737		987,067		887,257		996,138
Time	138,985		54,670		118,960		52,904
Total interest-bearing deposits	1,309,175		1,393,818		1,289,741		1,395,047
Total deposits in U.S. offices	1,955,942		2,106,877		1,925,489		2,104,341
Non-U.S. offices
Noninterest-bearing	24,948		28,832		25,390		28,789
Interest-bearing
Demand	320,822		335,102		320,527		331,348
Time	85,702		61,501		82,725		59,501
Total interest-bearing deposits	406,524		396,603		403,252		390,849
Total deposits in non-U.S. offices	431,472		425,435		428,642		419,638
Total deposits	$	2,387,414	$	2,532,312	$	2,354,131	$	2,523,979


(Unaudited)	Average interest rates
	Three months ended				Six months ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
U.S. offices
Noninterest-bearing	NA		NA		NA		NA
Interest-bearing
Demand(a)	3.41	%	0.32	%	3.09	%	0.18	%
Savings(b)	1.04		0.12		0.97		0.10
Time	4.53		0.92		4.52		0.60
Total interest-bearing deposits	1.93		0.20		1.75		0.14
Total deposits in U.S. offices	1.28		0.12		1.19		0.08
Non-U.S. offices
Noninterest-bearing	NA		NA		NA		NA
Interest-bearing
Demand	2.53		0.08		2.38		0.02
Time	5.66		0.72		5.32		0.38
Total interest-bearing deposits	3.21		0.20		2.98		0.08
Total deposits in non-U.S. offices	3.01		0.16		2.80		0.06
Total deposits	1.60	%	0.16	%	1.47	%	0.08	%

(a)Includes Negotiable Order of Withdrawal (“NOW”) accounts, and certain trust accounts.

(b)Includes Money Market Deposit Accounts (“MMDAs”).

Refer to Note 16 for additional information on deposits.

The following table summarizes short-term and long-term funding, excluding deposits, as of June 30, 2023, and December 31, 2022, and average balances for the three and six months ended June 30, 2023 and 2022, respectively. Refer to the Consolidated Balance Sheets Analysis on pages 16-19 and Note 11 for additional information.

Sources of funds (excluding deposits)


	June 30, 2023			December 31, 2022			Three months ended June 30,					Six months ended June 30,
						Average						Average
(in millions)						2023			2022				2023			2022
Commercial paper	$	11,686		$	12,557		$	11,057		$	19,589			$	11,930		$	17,097
Other borrowed funds	7,532			8,418			9,791			12,533				9,931			13,061
Federal funds purchased	1,783			1,684			1,564			1,241				1,729			1,467
Total short-term unsecured funding	$	21,001		$	22,659		$	22,412		$	33,363			$	23,590		$	31,625
Securities sold under agreements to repurchase(a)	$	260,999		$	198,382		$	258,297		$	227,075			$	252,322		$	235,300
Securities loaned(a)	3,490			2,547			3,857			5,060				3,994			4,982
Other borrowed funds	21,804		(g)	23,052			21,179			26,376				22,037			27,152
Obligations of Firm-administered multi-seller conduits(b)	16,383			9,236			12,741			6,779				11,622			6,625
Total short-term secured funding	$	302,676		$	233,217		$	296,074		$	265,290			$	289,975		$	274,059
Senior notes	$	177,966		$	188,025		$	180,712		$	187,143			$	182,830		$	188,779
Subordinated debt	19,763			21,803			20,543			19,139				21,182			19,688
Structured notes(c)	76,648			70,839			75,075			66,025				74,413			68,584
Total long-term unsecured funding	$	274,377		$	280,667		$	276,330		$	272,307			$	278,425		$	277,051
Credit card securitization(b)	$	999		$	1,999		$	999		$	1,748			$	1,087		$	2,010

FHLB advances	36,094		(d)	11,093			28,420			11,106				19,804			11,107
Purchase Money Note(d)	48,883			NA			32,745			NA				16,463			NA
Other long-term secured funding(e)	4,724			4,105			4,667			3,807				4,383			3,858
Total long-term secured funding	$	90,700		$	17,197		$	66,831		$	16,661			$	41,737		$	16,975
Preferred stock(f)	$	27,404		$	27,404		$	27,404		$	32,838			$	27,404		$	33,180
Common stockholders’ equity(f)	$	285,112		$	264,928		$	277,885		$	247,986			$	274,560		$	250,234

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

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

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

(d)As of June 30, 2023, included $25.0 billion FHLB advances and the Purchase Money Note associated with the First Republic acquisition. Refer to Note 28 for additional information.

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

(f)Refer to Capital Risk Management on pages 48-53, Consolidated statements of changes in stockholders’ equity on page 99 of this Form 10-Q, and Note 21 and Note 22 of JPMorgan Chase’s 2022 Form 10-K for additional information on preferred stock and common stockholders’ equity.

(g)As of June 30, 2023, included FHLB advances with original maturities of less than one year of $2.3 billion associated with the First Republic acquisition. Refer to Note 28 for additional information.

Short-term funding

The Firm’s sources of short-term secured funding primarily consist of securities loaned or sold under agreements to repurchase. These instruments are secured predominantly by high-quality securities collateral, including government-issued debt and U.S. GSE and government agency MBS. Securities sold under agreements to repurchase increased at June 30, 2023, compared with December 31, 2022, due to higher secured financing of trading assets and the impact of a lower level of netting on client-driven market-making activities in Markets.

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

The Firm’s sources of short-term unsecured funding primarily consist of issuances of wholesale commercial paper and other borrowed funds.

The decrease in commercial paper at June 30, 2023 from December 31, 2022, and for the average three and six months ended June 30, 2023 compared to the prior year periods, was due to lower net issuance levels resulting from short-term liquidity management.

The decrease in average unsecured other borrowed funds for the three and six months ended June 30, 2023 compared to the prior year periods was due to a lower level of overdrafts as well as net maturities of structured notes classified as other borrowed funds in CIB.

Long-term funding and issuance

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

The significant majority of the Firm’s long-term unsecured funding is issued by the Parent Company to provide flexibility in support of the funding needs of both bank and non-bank subsidiaries. The Parent Company advances substantially all net funding proceeds to its subsidiary, the IHC. The IHC does not issue debt to external counterparties. The following table summarizes long-term unsecured issuance and maturities or redemptions for the three and six months ended June 30, 2023 and 2022. Refer to Note 18 of this Form 10-Q and Liquidity Risk Management on pages 97-104 of JPMorgan Chase’s 2022 Form 10-K for additional information on the IHC and long-term debt.


Long-term unsecured funding
	Three months ended June 30,				Six months ended June 30,				Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022		2023		2022		2023		2022
(Notional in millions)	Parent Company								Subsidiaries
Issuance
Senior notes issued in the U.S. market	$	2,500	$	13,000	$	2,500	$	21,100	$	—	$	—	$	—	$	—
Senior notes issued in non-U.S. markets	—		—		—		2,752		—		—		—		—
Total senior notes	2,500		13,000		2,500		23,852		—		—		—		—

Structured notes(a)	563		918		1,444		2,074		7,947		11,230		15,665		19,679
Total long-term unsecured funding – issuance	$	3,063	$	13,918	$	3,944	$	25,926	$	7,947	$	11,230	$	15,665	$	19,679
Maturities/redemptions
Senior notes	$	6,335	$	5,000	$	13,433	$	8,693	$	2	$	—	$	67	$	64
Subordinated debt	2,027		—		2,027		—		—		—		—		—
Structured notes	324		415		771		1,392		6,479		7,428		13,981		15,075
Total long-term unsecured funding – maturities/redemptions	$	8,686	$	5,415	$	16,231	$	10,085	$	6,481	$	7,428	$	14,048	$	15,139

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

The Firm can also raise secured long-term funding through securitization of consumer credit card loans and FHLB advances. The following table summarizes the securitization issuance, as well as the FHLB advances and the Purchase Money Note associated with the First Republic acquisition, and their respective maturities or redemptions, as applicable for the three and six months ended June 30, 2023 and 2022, respectively.


Long-term secured funding
	Three months ended June 30,									Six months ended June 30,
	Issuance					Maturities/Redemptions				Issuance					Maturities/Redemptions
(in millions)	2023			2022		2023		2022		2023			2022		2023		2022
Credit card securitization	$	—		$	—	$	—	$	—	$	—		$	—	$	1,000	$	650

FHLB advances	25,775		(a)	—		602		4		25,775		(a)	—		604		6
Purchase Money Note(a)	50,000			NA		—		NA		50,000			NA		—		NA
Other long-term secured funding(b)	591			82		58		31		742			284		112		92
Total long-term secured funding	$	76,366		$	82	$	660	$	35	$	76,517		$	284	$	1,716	$	748

(a)As of June 30, 2023, included FHLB advances and the Purchase Money Note associated with the First Republic acquisition. Refer to Note 28 for additional information.

(b)Includes long-term structured notes that are secured.

The Firm’s wholesale businesses also securitize loans for client-driven transactions; those client-driven loan securitizations are not considered to be a source of funding for the Firm and are not included in the table above. Refer to Note 14 of JPMorgan Chase’s 2022 Form 10-K for a further description of client-driven loan securitizations.

Credit ratings

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

and stress testing metrics. The Firm believes that it maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.

Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. Refer to Note 5 and Note 14 for additional information.

The credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries as of June 30, 2023, were as follows:

JPMorgan Chase & Co.

JPMorgan Chase Bank, N.A.

J.P. Morgan Securities LLC
J.P. Morgan Securities plc
J.P. Morgan SE

June 30, 2023

Long-term issuer

Short-term issuer

Outlook

Long-term issuer

Short-term issuer

Outlook

Long-term issuer

Short-term issuer

Outlook

Moody’s Investors Service

P-1

Stable

Aa2

P-1

Stable

Aa3

P-1

Stable

Standard & Poor’s (a)

A-

A-2

Stable

A+

A-1

Stable

A+

A-1

Stable

Fitch Ratings

AA-

F1+

Stable

F1+

Stable

F1+

Stable

(a) On March 31, 2023, Standard & Poor's affirmed the credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries, and revised the outlook from positive to stable.

Refer to page 104 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the factors that could affect the credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries.

CREDIT AND INVESTMENT RISK MANAGEMENT

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

wholesale credit risk, and investment portfolio risk. Refer to Consumer Credit Portfolio, Wholesale Credit Portfolio and

Allowance for Credit Losses on pages 65-82 for a further discussion of Credit Risk.

Refer to page 83 for a further discussion of Investment Portfolio Risk. Refer to Credit and Investment Risk Management on pages 106-130 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of the Firm’s Credit and Investment Risk Management framework.

CREDIT PORTFOLIO

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

In the following tables, total loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm accounts for at fair value and classifies as trading assets; refer to Notes 2 and 3 for further information regarding these loans. Refer to Notes 12, 24 and 5 for additional information on the Firm’s loans, lending-related commitments and derivative receivables.

Refer to Note 10 for information regarding the credit risk inherent in the Firm’s investment securities portfolio; and refer to Note 11 for information regarding the credit risk inherent in the securities financing portfolio. Refer to Consumer Credit Portfolio on pages 65-69 and Note 12 for further discussions of the consumer credit environment and consumer loans. Refer to Wholesale Credit Portfolio on pages 70-79 and Note 12 for further discussions of the wholesale credit environment and wholesale loans.

On January 1, 2023, the Firm adopted changes to the TDR accounting guidance, which eliminated the accounting and disclosure requirements for TDRs including the requirement to assess whether a modification is reasonably expected or involves a concession. The new guidance requires disclosure for loan modifications to borrowers experiencing financial difficulty consisting of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or a combination of these modifications. The Firm has defined these types of modifications as financial difficulty modifications ("FDMs"). As a result of the elimination of the requirement to assess whether a modification is reasonably expected or involves a concession, the population of loans considered FDMs will differ from those previously considered TDRs. Refer to Note 1 and Note 12 for further information.


Total credit portfolio
	Credit exposure					Nonperforming(d)
(in millions)	Jun 30, 2023			Dec 31, 2022		Jun 30, 2023		Dec 31, 2022
Loans retained	$	1,255,688		$	1,089,598	$	6,377	$	5,837
Loans held-for-sale	5,592			3,970		119		54
Loans at fair value	38,789			42,079		777		829
Total loans	1,300,069			1,135,647		7,273		6,720
Derivative receivables	64,217			70,880		286		296
Receivables from customers(a)	42,741			49,257		—		—
Total credit-related assets	1,407,027			1,255,784		7,559		7,016
Assets acquired in loan satisfactions
Real estate owned	NA			NA		243		203
Other	NA			NA		36		28
Total assets acquired in loan satisfactions	NA			NA		279		231
Lending-related commitments	1,473,420			1,326,782		332		455
Total credit portfolio	$	2,880,447	(c)	$	2,582,566	$	8,170	$	7,702
Credit derivatives and credit-related notes used in credit portfolio management activities(b)	$	(32,090)		$	(19,330)	$	—	$	—
Liquid securities and other cash collateral held against derivatives	(23,282)			(23,014)		NA		NA

(a)Receivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM; these are reported within accrued interest and accounts receivable on the Consolidated balance sheets.

(b)Represents the net notional amount of protection purchased and sold through credit derivatives and credit-related notes used to manage credit exposures.

(c)Included credit exposure associated with the First Republic acquisition consisting of $104.6 billion in the Consumer credit portfolio and $98.2 billion in the Wholesale credit portfolio.

(d)At June 30, 2023, and December 31, 2022, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $215 million and $302 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.

The following table provides information on Firmwide nonaccrual loans to total loans.


(in millions, except ratios)	June 30, 2023			Dec 31, 2022

Total nonaccrual loans	$	7,273		$	6,720
Total loans	1,300,069			1,135,647
Firmwide nonaccrual loans to total loans outstanding	0.56		%	0.59		%

The following table provides information about the Firm’s net charge-offs and recoveries.


(in millions, except ratios)	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Net charge-offs	$	1,411		$	657		$	2,548		$	1,239
Average retained loans	1,194,044			1,035,933			1,138,550			1,020,180
Net charge-off rates	0.47		%	0.25		%	0.45		%	0.24		%

CONSUMER CREDIT PORTFOLIO

The Firm’s retained consumer portfolio consists primarily of loans and lending-related commitments for residential real estate, credit card, scored auto and business banking. The consumer credit portfolio also includes certain loans and lending-related commitments associated with the First Republic acquisition, primarily in residential real estate. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. Refer to Note 12 of this Form 10-Q; and Consumer Credit Portfolio on pages 110-115 and Note 12 of JPMorgan Chase's 2022 Form 10-K for further information on consumer loans, as well as the Firm’s nonaccrual and charge-off accounting policies. Refer to Note 24 of this Form 10-Q and Note 28 of JPMorgan Chase's 2022 Form 10-K for further information on lending-related commitments.

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


Consumer credit portfolio
(in millions)	Credit exposure					Nonaccrual loans((j)(k)(l)
	Jun 30, 2023			Dec 31, 2022		Jun 30, 2023		Dec 31, 2022
Consumer, excluding credit card
Residential real estate(a)	$	328,010		$	237,561	$	3,641	$	3,745
Auto and other(b)(c)	68,185			63,192		143		129
Total loans – retained	396,195			300,753		3,784		3,874
Loans held-for-sale	549			618		71		28
Loans at fair value(d)	11,460			10,004		410		423
Total consumer, excluding credit card loans	408,204			311,375		4,265		4,325
Lending-related commitments(e)	50,846			33,518
Total consumer exposure, excluding credit card	459,050		(i)	344,893
Credit card
Loans retained(f)	191,348			185,175		NA		NA

Total credit card loans	191,348			185,175		NA		NA
Lending-related commitments(e)(g)	881,485			821,284
Total credit card exposure	1,072,833			1,006,459
Total consumer credit portfolio	$	1,531,883		$	1,351,352	$	4,265	$	4,325
Credit-related notes used in credit portfolio management activities(h)	$	(985)		$	(1,187)


	Three months ended June 30,
(in millions, except ratios)	Net charge-offs/(recoveries)				Average loans - retained				Net charge-off/(recovery) rate(m)
	2023		2022		2023		2022		2023		2022
Consumer, excluding credit card
Residential real estate	$	(25)	$	(67)	$	293,073	$	232,770	(0.03)	%	(0.12)	%
Auto and other	147		94		66,470		66,879		0.89		0.56
Total consumer, excluding credit card - retained	122		27		359,543		299,649		0.14		0.04
Credit card - retained	1,124		580		187,027		158,434		2.41		1.47
Total consumer - retained	$	1,246	$	607	$	546,570	$	458,083	0.91	%	0.53	%


	Six months ended June 30,
(in millions, except ratios)	Net charge-offs/(recoveries)				Average loans - retained				Net charge-off/(recovery) rate(m)
	2023		2022		2023		2022		2023		2022
Consumer, excluding credit card
Residential real estate	$	(45)	$	(134)	$	265,082	$	229,369	(0.03)	%	(0.12)	%
Auto and other	299		207		65,145		68,197		0.93		0.61
Total consumer, excluding credit card - retained	254		73		330,227		297,566		0.16		0.05
Credit card - retained	2,046		1,086		183,757		153,941		2.25		1.42
Total consumer - retained	$	2,300	$	1,159	$	513,984	$	451,507	0.90	%	0.52	%

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

(b)At June 30, 2023 and December 31, 2022, excluded operating lease assets of $10.9 billion and $12.0 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. Refer to Note 17 for further information.

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

(d)Includes scored mortgage loans held in CCB and CIB, and other consumer unsecured loans in CIB.

(e)Credit card, home equity and certain business banking lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. For credit card commitments, and if certain conditions are met, home equity commitments and certain business banking commitments, the Firm can reduce or cancel these lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. Refer to Note 24 for further information.

(f)Includes billed interest and fees.

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

(h)Represents the notional amount of protection obtained through the issuance of credit-related notes that reference certain pools of residential real estate and auto loans in the retained consumer portfolio.

(i)Included credit exposure of $104.6 billion associated with the First Republic acquisition consisting of $101.5 billion in residential real estate and $3.1 billion in auto and other.

(j)At June 30, 2023 and December 31, 2022, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $215 million and $302 million, respectively. These amounts have been excluded from nonaccrual loans based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance.

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

(l)At June 30, 2023 and December 31, 2022, nonaccrual loans excluded $39 million and $101 million, respectively, of PPP loans 90 or more days past due and guaranteed by the SBA.

(m)Average consumer loans held-for-sale and loans at fair value were $13.3 billion and $18.2 billion for the three months ended June 30, 2023 and 2022, respectively, and $12.4 billion and $21.0 billion for the six months ended June 30, 2023 and 2022, respectively. These amounts were excluded when calculating net charge-off/(recovery) rates.

Maturities and sensitivity to changes in interest rates

The table below sets forth loan maturities by scheduled repayments, by class of loan and the distribution between fixed and floating interest rates based on the stated terms of the loan agreements. Refer to Consumer Credit Portfolio on pages 110-115 of JPMorgan Chase's 2022 Form 10-K for further information.


June 30, 2023 (in millions)	Within 1 year(d)			1-5 years		5-15 years		After 15 years		Total
Consumer, excluding credit card
Residential real estate	$	16,797		$	27,570	$	109,586	$	183,944	$	337,897
Auto and other	19,826		(e)	45,847		4,629		5		70,307
Total consumer, excluding credit card loans(a)	$	36,623		$	73,417	$	114,215	$	183,949	$	408,204
Total credit card loans	$	190,780		$	568	$	—	$	—	$	191,348
Total consumer loans	$	227,403		$	73,985	$	114,215	$	183,949	$	599,552

Loans due after one year at fixed interest rates
Residential real estate(b)				$	20,332	$	59,618	$	91,537
Auto and other				45,771		3,678		5
Credit card				568		—		—

Loans due after one year at variable interest rates
Residential real estate(c)				$	7,238	$	49,968	$	92,407
Auto and other				76		951		—

Total consumer loans				$	73,985	$	114,215	$	183,949

(a)Included $3.6 billion, $4.7 billion, $27.3 billion, and $58.3 billion of loans within 1 year, 1-5 years, 5-15 years, and after 15 years, respectively, associated with the First Republic acquisition.

(b)Included $3.0 billion, $8.8 billion, and $15.6 billion in 1-5 years, 5-15 years, and after 15 years, respectively, associated with the First Republic acquisition.

(c)Included $1.7 billion, $18.6 billion, and $42.7 billion in 1-5 years, 5-15 years, and after 15 years, respectively, associated with the First Republic acquisition.

(d)Includes loans held-for-sale and loans at fair value.

(e)Includes overdrafts.

Consumer, excluding credit card

Portfolio analysis

Loans increased compared to December 31, 2022 driven by residential real estate loans associated with the First Republic acquisition and higher auto loans.

Residential real estate: The residential real estate portfolio, including loans held-for-sale and loans at fair value, predominantly consists of prime mortgage loans and home equity lines of credit.

Retained loans increased compared to December 31, 2022, reflecting residential real estate loans associated with the First Republic acquisition. Retained nonaccrual loans decreased compared to December 31, 2022. Net recoveries were lower for the three and six months ended June 30, 2023 compared to the same periods in the prior year driven by lower prepayments due to higher interest rates.

Loans at fair value decreased from December 31, 2022, driven by a decrease in CIB due to sales outpacing purchases largely offset by an increase in Home Lending as originations outpaced warehouse loan sales. Nonaccrual loans at fair value were relatively flat compared to December 31, 2022.

At June 30, 2023 and December 31, 2022, the carrying value of interest-only residential mortgage loans was $90.0 billion and $36.3 billion, respectively. The increase was driven by the impact of the First Republic acquisition. These loans have an interest-only payment period generally followed by an adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as higher-balance loans to higher-income borrowers. The credit performance of this portfolio is comparable with the performance of the broader prime mortgage portfolio and there were no charge-offs associated with the First Republic acquisition.

The carrying value of home equity lines of credit outstanding was $16.9 billion at June 30, 2023, which included $2.6 billion associated with the First Republic acquisition. The carrying value of home equity lines of credit outstanding included $4.6 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $4.7 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.

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


(in millions)	June 30, 2023		December 31, 2022
Current	$	614	$	659
30-89 days past due	112		136
90 or more days past due	215		302
Total government guaranteed loans	$	941	$	1,097

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

At June 30, 2023, $229.8 billion, or 70% of the total retained residential real estate loan portfolio, was concentrated in California, New York, Florida, Texas and Massachusetts, compared with $147.8 billion, or 62% at December 31, 2022.

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

Modified residential real estate loans

For the three and six months ended June 30, 2023, residential real estate FDMs were $35 million and $75 million, respectively. In addition to FDMs, the Firm also had $33 million and $48 million of loans subject to trial modification where the terms of the loans have not been permanently modified, as well as $3 million and $5 million of loans subject to discharge under Chapter 7 bankruptcy proceedings ("Chapter 7 loans") for the three and six months ended June 30, 2023, respectively. The changes to the TDR accounting guidance eliminated the TDR reasonably expected and concession assessment criteria. Accordingly, trial modifications and Chapter 7 loans were considered TDRs, but not FDMs. Refer to Note 1 and Note 12 for further information.

For the three and six months ended June 30, 2022, residential real estate TDRs were $115 million and $233 million, respectively. Refer to Note 12 for further information on TDRs in prior periods.

Auto and other: The auto and other loan portfolio, including loans at fair value consists of prime-quality scored auto and business banking loans, other consumer unsecured loans, and overdrafts. The portfolio increased when compared to December 31, 2022 due to originations of scored Auto loans and an increase in other consumer unsecured fair value option loans associated with the First Republic acquisition, largely offset by paydowns. Net charge-offs increased for the three and six months ended June 30, 2023 compared to the same periods in the prior year due to higher scored Auto charge-offs as delinquency levels normalized and vehicle valuations declined. The scored Auto net charge-off rates were 0.41% and 0.12% for the three months ended June 30, 2023 and 2022, respectively, and 0.43% and 0.15% for the six months ended June 30, 2023 and 2022, respectively.

Nonperforming assets

The following table presents information as of June 30, 2023 and December 31, 2022, about consumer, excluding credit card, nonperforming assets.


Nonperforming assets(a)
(in millions)	June 30, 2023		December 31, 2022
Nonaccrual loans
Residential real estate(b)	$	4,122	$	4,196
Auto and other(c)	143		129
Total nonaccrual loans	4,265		4,325
Assets acquired in loan satisfactions
Real estate owned	126		129
Other	36		28
Total assets acquired in loan satisfactions	162		157
Total nonperforming assets	$	4,427	$	4,482

(a)At June 30, 2023 and December 31, 2022, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $215 million and $302 million, respectively. These amounts have been excluded based upon the government guarantee.

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

(c)At June 30, 2023 and December 31, 2022, nonaccrual loans excluded $39 million and $101 million, respectively, of PPP loans 90 or more days past due and guaranteed by the SBA.

Nonaccrual loans

The following table presents changes in consumer, excluding credit card, nonaccrual loans for the six months ended June 30, 2023 and 2022.


Nonaccrual loan activity
Six months ended June 30, (in millions)	2023		2022
Beginning balance	$	4,325	$	5,350
Additions	1,290		1,149
Reductions:
Principal payments and other(a)	486		789
Charge-offs	202		117
Returned to performing status	573		824
Foreclosures and other liquidations	89		97
Total reductions	1,350		1,827
Net changes	(60)		(678)
Ending balance	$	4,265	$	4,672

(a)Other reductions include loan sales.

Refer to Note 12 for further information about the consumer credit portfolio, including information about delinquencies, other credit quality indicators, loan modifications and loans that were in the process of active or suspended foreclosure.

Credit card

Total credit card loans increased from December 31, 2022 reflecting growth from new accounts and revolving balances which continued to normalize to pre-pandemic levels. The June 30, 2023 30+ and 90+ day delinquency rates of 1.70% and 0.84%, respectively, increased compared to the December 31, 2022 30+ and 90+ day delinquency rates of 1.45% and 0.68% respectively, and net charge-offs increased for the three and six months ended June 30, 2023 compared to the same periods in the prior year as 30+ day delinquencies have normalized.

Consistent with the Firm’s policy, all credit card loans typically remain on accrual status until charged off. However, the Firm’s allowance for loan losses includes the estimated uncollectible portion of accrued and billed interest and fee income. Refer to Note 12 for further information about this portfolio, including information about delinquencies.

Geographic and FICO composition of credit card loans

Refer to Note 12 for information on the geographic and FICO composition of the Firm’s credit card loans.

Modifications of credit card loans

For the three and six months ended June 30, 2023, credit card FDMs were $181 million and $326 million, respectively. In addition to FDMs, the Firm also had $26 million of loans subject to trial modification where the terms of the loans have not been permanently modified for both the three and six months ended June 30, 2023. The changes to the TDR accounting guidance eliminated the TDR reasonably expected and concession assessment criteria. Accordingly, trial modifications were considered TDRs, but not FDMs.

For the three and six months ended June 30, 2022, credit card TDRs were $81 million and $163 million, respectively.

Refer to Note 1 and Note 12 for further information.

WHOLESALE CREDIT PORTFOLIO

In its wholesale businesses, the Firm is exposed to credit risk primarily through its underwriting, lending, market-making, and hedging activities with and for clients and counterparties, as well as through various operating services (such as cash management and clearing activities), securities financing activities and cash placed with banks. A portion of the loans originated or acquired by the Firm’s wholesale businesses is generally retained on the balance sheet. The Firm distributes a significant percentage of the loans that it originates into the market as part of its syndicated loan business and to manage portfolio concentrations and credit risk. The wholesale portfolio is actively managed, in part by conducting ongoing, in-depth reviews of client credit quality and transaction structure inclusive of collateral where applicable, and of industry, product and client concentrations. Refer to the industry discussion on pages 72-75 for further information.

The Firm’s wholesale credit portfolio includes exposure held in CIB, CB, AWM and Corporate, as well as risk-rated BWM and auto dealer exposure held in CCB, for which the wholesale methodology is applied when determining the allowance for loan losses. The Firm continues to convert certain operations, and to integrate clients, products and services, associated with the First Republic acquisition to align with the Firm’s businesses and operations. Accordingly, reporting classifications and internal risk rating profiles in the wholesale portfolio may change in future periods. Refer to Business Developments on page 9 for additional information.

As of June 30, 2023, the increase in nonperforming exposure was driven by loans, resulting from client-specific downgrades in CB and AWM, partially offset by a reduction in lending-related commitments. For the six months ended June 30, 2023, wholesale charge-offs remained low, despite an increase in charge-offs in the second quarter of 2023 concentrated in Office real estate.

As of June 30, 2023, retained loans increased $64.5 billion predominantly driven by the impact of the First Republic acquisition. Lending-related commitments increased $69.1 billion driven by the impact of the First Republic acquisition, and net portfolio activity in CIB and CB, including an increase in held-for-sale positions in the bridge financing portfolio.


Wholesale credit portfolio
	Credit exposure					Nonperforming
(in millions)	Jun 30, 2023			Dec 31, 2022		Jun 30, 2023		Dec 31, 2022
Loans retained	$	668,145		$	603,670	$	2,593	$	1,963
Loans held-for-sale	5,043			3,352		48		26
Loans at fair value	27,329			32,075		367		406
Loans	700,517			639,097		3,008		2,395
Derivative receivables	64,217			70,880		286		296
Receivables from customers(a)	42,741			49,257		—		—
Total wholesale credit-related assets	807,475			759,234		3,294		2,691
Assets acquired in loan satisfactions
Real estate owned	—			NA		117		74
Other	—			NA		—		—
Total assets acquired in loan satisfactions	—			NA		117		74
Lending-related commitments	541,089			471,980		332		455
Total wholesale credit portfolio	$	1,348,564	(c)	$	1,231,214	$	3,743	$	3,220
Credit derivatives and credit-related notes used in credit portfolio management activities(b)	$	(31,105)		$	(18,143)	$	—	$	—
Liquid securities and other cash collateral held against derivatives	(23,282)			(23,014)		—		NA

(b)Represents the net notional amount of protection purchased and sold through credit derivatives and credit-related notes used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 79 and Note 5 for additional information.

(c)Included credit exposure of $98.2 billion associated with the First Republic acquisition.

Wholesale credit exposure – maturity and ratings profile

The following tables present the maturity and internal risk rating profiles of the wholesale credit portfolio as of June 30, 2023, and December 31, 2022. The Firm generally considers internal ratings with qualitative characteristics equivalent to BBB-/Baa3 or higher as investment grade, and takes into consideration collateral and structural support when determining the internal risk rating for each credit facility. Refer to Note 12 of JPMorgan Chase's 2022 Form 10-K for further information on internal risk ratings.



	Maturity profile(d)								Ratings profile
	1 year or less		1 year through 5 years		After 5 years		Total		Investment-grade		Noninvestment-grade		Total		Total % of IG
June 30, 2023, (in millions, except ratios)
Loans retained	$	225,626	$	265,856	$	176,663	$	668,145	$	451,978	$	216,167	$	668,145	68	%
Derivative receivables							64,217						64,217
Less: Liquid securities and other cash collateral held against derivatives							(23,282)						(23,282)
Total derivative receivables, net of collateral	12,198		11,089		17,648		40,935		32,682		8,253		40,935		80
Lending-related commitments	141,356		375,289		24,444		541,089		354,209		186,880		541,089		65
Subtotal	379,180		652,234		218,755		1,250,169		838,869		411,300		1,250,169		67
Loans held-for-sale and loans at fair value(a)							32,372						32,372
Receivables from customers							42,741						42,741
Total exposure – net of liquid securities and other cash collateral held against derivatives							$	1,325,282					$	1,325,282
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c)	$	(6,612)	$	(22,502)	$	(1,991)	$	(31,105)	$	(26,836)	$	(4,269)	$	(31,105)	86	%


	Maturity profile(d)								Ratings profile
	1 year or less		1 year through 5 years		After 5 years		Total		Investment-grade		Noninvestment-grade		Total		Total % of IG
December 31, 2022 (in millions, except ratios)
Loans retained	$	204,761	$	253,896	$	145,013	$	603,670	$	425,412	$	178,258	$	603,670	70	%
Derivative receivables							70,880						70,880
Less: Liquid securities and other cash collateral held against derivatives							(23,014)						(23,014)
Total derivative receivables, net of collateral	13,508		14,880		19,478		47,866		36,231		11,635		47,866		76
Lending-related commitments	101,083		347,456		23,441		471,980		327,168		144,812		471,980		69
Subtotal	319,352		616,232		187,932		1,123,516		788,811		334,705		1,123,516		70
Loans held-for-sale and loans at fair value(a)							35,427						35,427
Receivables from customers							49,257						49,257
Total exposure – net of liquid securities and other cash collateral held against derivatives							$	1,208,200					$	1,208,200
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c)	$	(2,817)	$	(13,530)	$	(1,796)	$	(18,143)	$	(15,115)	$	(3,028)	$	(18,143)	83	%

(a)Loans held-for-sale are primarily related to syndicated loans and loans transferred from the retained portfolio.

(b)These derivatives do not qualify for hedge accounting under U.S. GAAP.

(c)The notional amounts are presented on a net basis by underlying reference entity and the ratings profile shown is based on the ratings of the reference entity on which protection has been purchased. Predominantly all of the credit derivatives entered into by the Firm where it has purchased protection used in credit portfolio management activities are executed with investment-grade counterparties. In addition, the Firm obtains credit protection against certain loans in the retained loan portfolio through the issuance of credit-related notes.

(d)The maturity profile of retained loans, lending-related commitments and derivative receivables is generally based on remaining contractual maturity. Derivative contracts that are in a receivable position as of June 30, 2023, may become payable prior to maturity based on their cash flow profile or changes in market conditions.

Wholesale credit exposure – industry exposures

The Firm focuses on the management and diversification of its industry exposures, and pays particular attention to industries with actual or potential credit concerns.

Exposures deemed criticized align with the U.S. banking regulators’ definition of criticized exposures, which consist of the special mention, substandard and doubtful categories. Total criticized exposure, excluding loans held-for-sale and loans at fair value, was $35.0 billion and $31.3 billion as of June 30, 2023 and December 31, 2022, representing approximately 2.8% and 2.7% of total wholesale credit exposure, respectively. Criticized exposure increased, driven by client-specific downgrades largely in Real Estate, Consumer and Retail, Technology, Media & Telecommunications, and Healthcare, as well as exposures associated with the First Republic acquisition, partially offset by client-specific upgrades. Of the $35.0 billion of criticized exposure at June 30, 2023, approximately half was undrawn and $31.8 billion was performing.

The table below summarizes by industry the Firm’s exposures as of June 30, 2023 and December 31, 2022. The industry of risk category is generally based on the client or counterparty’s primary business activity. Refer to Note 4 for additional information on industry concentrations.


Wholesale credit exposure – industries(a)
											Selected metrics
											30 days or more past due and accruing loans		Net charge-offs/ (recoveries)		Credit derivative hedges and credit-related notes(i)		Liquid securities and other cash collateral held against derivative receivables
					Noninvestment-grade
As of or for the six months ended	Credit exposure(f)(g)(h)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming
June 30, 2023
(in millions)
Real Estate	$	206,912	$	151,293	$	50,328	$	4,715	$	576	$	286	$	102	$	(671)	$	—
Individuals and Individual Entities(b)	141,178		115,505		24,954		210		509		1,158		—		—		—
Asset Managers	138,143		87,284		50,713		138		8		72		—		—		(8,906)
Consumer & Retail	125,935		62,890		54,980		7,511		554		416		59		(3,618)		—
Industrials	77,206		43,489		30,310		3,242		165		362		16		(2,072)		(3)
Technology, Media & Telecommunications	76,444		41,401		27,127		7,708		208		125		78		(3,396)		—
Healthcare	65,547		43,569		19,435		2,140		403		292		13		(2,829)		(13)
Banks & Finance Cos	61,659		31,037		29,540		1,061		21		71		4		(470)		(1,123)
State & Municipal Govt(c)	37,157		33,372		3,560		222		3		7		—		(4)		—
Utilities	35,757		25,124		9,746		768		119		60		(2)		(1,989)		—
Oil & Gas	33,233		18,969		13,768		446		50		42		4		(1,384)		—
Automotive	32,947		23,385		9,174		235		153		56		—		(623)		—
Chemicals & Plastics	22,195		12,020		9,243		811		121		26		—		(835)		—
Insurance	21,874		15,513		6,062		299		—		14		—		(531)		(7,529)
Central Govt	16,845		16,396		318		127		4		—		—		(3,724)		(229)
Metals & Mining	15,631		8,528		6,623		450		30		—		(6)		(209)		—
Transportation	15,447		6,879		7,002		1,516		50		64		(18)		(598)		—
Securities Firms	9,077		6,116		2,961		—		—		4		—		(14)		(2,693)
Financial Markets Infrastructure	4,993		4,599		394		—		—		—		—		(1)		—
All other(d)	135,271		114,197		20,621		216		237		40		(2)		(8,137)		(2,786)
Subtotal	$	1,273,451	$	861,566	$	376,859	$	31,815	$	3,211	$	3,095	$	248	$	(31,105)	$	(23,282)
Loans held-for-sale and loans at fair value	32,372
Receivables from customers	42,741
Total(e)	$	1,348,564


(continued from previous page)
											Selected metrics
											30 days or more past due and accruing loans		Net charge-offs/ (recoveries)		Credit derivative hedges and credit-related notes(i)		Liquid securities and other cash collateral held against derivative receivables
					Noninvestment-grade
As of or for the year ended	Credit exposure(f)(g)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming
December 31, 2022
(in millions)
Real Estate	$	170,857	$	129,866	$	36,945	$	3,609	$	437	$	543	$	19	$	(113)	$	—
Individuals and Individual Entities(b)	130,815		112,006		18,104		360		345		1,038		1		—		—
Asset Managers	95,656		78,925		16,665		61		5		15		(1)		—		(8,278)
Consumer & Retail	120,555		60,781		51,871		7,295		608		321		49		(1,157)		—
Industrials	72,483		39,052		30,500		2,809		122		282		44		(1,258)		—
Technology, Media & Telecommunications	72,286		39,199		25,689		7,096		302		62		39		(1,766)		—
Healthcare	62,613		43,839		17,117		1,479		178		43		27		(1,055)		—
Banks & Finance Cos	51,816		27,811		22,994		961		50		36		—		(262)		(994)
State & Municipal Govt(c)	33,847		33,191		529		126		1		36		—		(9)		(5)
Utilities	36,218		25,981		9,294		807		136		21		15		(607)		(1)
Oil & Gas	38,668		20,547		17,616		474		31		57		(6)		(414)		—
Automotive	33,287		23,908		8,839		416		124		198		(2)		(513)		—
Chemicals & Plastics	20,030		12,134		7,103		744		49		10		3		(298)		—
Insurance	21,045		15,468		5,396		181		—		1		—		(273)		(7,296)
Central Govt	19,095		18,698		362		35		—		—		10		(4,591)		(677)
Metals & Mining	15,915		8,825		6,863		222		5		7		(1)		(27)		(4)
Transportation	15,009		6,497		6,862		1,574		76		24		2		(339)		—
Securities Firms	8,066		4,235		3,716		115		—		—		(13)		(26)		(2,811)
Financial Markets Infrastructure	4,962		4,525		437		—		—		—		—		—		—
All other(d)	123,307		105,284		17,555		223		245		4		(5)		(5,435)		(2,948)
Subtotal	$	1,146,530	$	810,772	$	304,457	$	28,587	$	2,714	$	2,698	$	181	$	(18,143)	$	(23,014)
Loans held-for-sale and loans at fair value	35,427
Receivables from customers	49,257
Total(e)	$	1,231,214

(a)The industry rankings presented in the table as of December 31, 2022, are based on the industry rankings of the corresponding exposures as of June 30, 2023, not actual rankings of such exposures as of December 31, 2022.

(b)Individuals and Individual Entities predominantly consists of Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB, and includes exposure to personal investment companies and personal and testamentary trusts.

(c)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) noted above, the Firm held $6.8 billion and $6.6 billion of trading assets as of June 30, 2023, and December 31, 2022, respectively; $24.0 billion and $6.8 billion, respectively, of AFS securities; and $11.6 billion and $19.7 billion, respectively, of HTM securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 10 for further information.

(d)All other includes: SPEs, and Private education and civic organizations, representing approximately 94% and 6%, respectively, as of June 30, 2023 and 95% and 5%, respectively, as of December 31, 2022.

(e)Excludes cash and other deposits placed with banks of $485.4 billion and $556.6 billion, as of June 30, 2023, and December 31, 2022, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.

(f)Credit exposure is net of risk participations and excludes the benefit of credit derivatives and credit-related notes used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.

(g)Credit exposure includes held-for-sale and fair value option elected lending-related commitments.

(h)Included credit exposure of $98.2 billion associated with the First Republic acquisition predominantly in Asset Managers, Real Estate, and Individuals and Individual Entities.

(i)Represents the net notional amounts of protection purchased and sold through credit derivatives and credit-related notes used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The All other category includes purchased credit protection on certain credit indices.

Presented below is additional detail on certain of the Firm’s industry exposures.

Real Estate

Real Estate exposure was $206.9 billion as of June 30, 2023. Criticized exposure increased by $1.3 billion from $4.0 billion as of December 31, 2022 to $5.3 billion as of June 30, 2023, driven by client-specific downgrades, partially offset by client-specific upgrades.


	June 30, 2023
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure			% Investment-grade		% Drawn(e)
Multifamily(a)	$	119,840	$	11	$	119,851		83	%	89	%
Other Income Producing Properties(b)	18,664		178		18,842			56		68
Industrial	17,997		—		17,997			66		74
Office	17,623		24		17,647			62		76
Services and Non Income Producing	15,656		63		15,719			64		53
Retail	12,899		35		12,934			61		71
Lodging	3,902		20		3,922			16		47
Total Real Estate Exposure(c)	$	206,581	$	331	$	206,912	(d)	73	%	80	%

	December 31, 2022
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure			% Investment- grade		% Drawn(e)
Multifamily(a)	$	99,555	$	17	$	99,572		82	%	87	%
Other Income Producing Properties(b)	12,701		150		12,851			70		62
Industrial	15,928		1		15,929			72		71
Office	14,917		25		14,942			74		73
Services and Non Income Producing	13,968		10		13,978			65		48
Retail	10,192		8		10,200			75		68
Lodging	3,347		38		3,385			6		37
Total Real Estate Exposure	$	170,608	$	249	$	170,857		76	%	77	%

(a)Multifamily exposure is largely in California.

(b)Other Income Producing Properties consists of clients with diversified property types or other property types outside of categories listed in the table above.

(c)Real Estate exposure is approximately 82% secured; unsecured exposure is approximately 76% investment-grade.

(d)Included $33.2 billion of credit exposure associated with the First Republic acquisition.

(e)Represents drawn exposure as a percentage of credit exposure.

Consumer & Retail

Consumer & Retail exposure was $125.9 billion as of June 30, 2023. Criticized exposure increased by $162 million from $7.9 billion as of December 31, 2022 to $8.1 billion as of June 30, 2023, driven by client-specific downgrades predominantly offset by client-specific upgrades and net portfolio activity.


	June 30, 2023
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment-grade		% Drawn(d)
Retail(a)	$	35,745	$	329	$	36,074	53	%	32	%
Business and Consumer Services	33,127		348		33,475		49		41
Food and Beverage	31,747		1,195		32,942		56		40
Consumer Hard Goods	13,927		285		14,212		47		36
Leisure(b)	9,111		121		9,232		25		44
Total Consumer & Retail(c)	$	123,657	$	2,278	$	125,935	50	%	38	%

	December 31, 2022
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment- grade		% Drawn(d)
Retail(a)	$	33,891	$	309	$	34,200	50	%	33	%
Business and Consumer Services	31,256		384		31,640		50		40
Food and Beverage	31,706		736		32,442		59		39
Consumer Hard Goods	13,879		172		14,051		51		39
Leisure(b)	8,173		49		8,222		21		45
Total Consumer & Retail	$	118,905	$	1,650	$	120,555	50	%	38	%

(a)Retail consists of Home Improvement & Specialty Retailers, Restaurants, Supermarkets, Discount & Drug Stores, Specialty Apparel and Department Stores.

(b)Leisure consists of Gaming, Arts & Culture, Travel Services and Sports & Recreation. As of June 30, 2023 approximately 88% of the noninvestment-grade Leisure portfolio is secured.

(c)Consumer & Retail exposure is approximately 57% secured; unsecured exposure is approximately 79% investment-grade.

(d)Represents drawn exposure as a percent of credit exposure.

Oil & Gas

Oil & Gas exposure was $33.2 billion as of June 30, 2023 of which $496 million was considered criticized exposure.


	June 30, 2023
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment-grade		% Drawn(c)
Exploration & Production (“E&P”) and Oil field Services	$	16,592	$	1,186	$	17,778	56	%	29	%
Other Oil & Gas(a)	15,289		166		15,455		58		28
Total Oil & Gas(b)	$	31,881	$	1,352	$	33,233	57	%	29	%

	December 31, 2022
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment- grade		% Drawn(c)
Exploration & Production (“E&P”) and Oil field Services	$	17,729	$	4,666	$	22,395	50	%	25	%
Other Oil & Gas(a)	15,818		455		16,273		57		25
Total Oil & Gas	$	33,547	$	5,121	$	38,668	53	%	25	%

(a)Other Oil & Gas includes Integrated Oil & Gas companies, Midstream/Oil Pipeline companies and refineries.

(b)Oil & Gas exposure is approximately 40% secured, approximately half of which is reserve-based lending to the Exploration & Production sub-sector; unsecured exposure is approximately 68% investment-grade.

(c)Represents drawn exposure as a percent of credit exposure.

Loans

In its wholesale businesses, the Firm provides loans to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals. Refer to Note 12 for a further discussion on loans, including information about delinquencies, loan modifications and other credit quality indicators.

The following table presents the change in the nonaccrual loan portfolio for the six months ended June 30, 2023 and 2022. Since June 30, 2022, nonaccrual loan exposure increased by $518 million driven by Healthcare, Consumer & Retail, and Real Estate resulting from downgrades, partially offset by Transportation and civic organizations resulting from net portfolio activity.


Wholesale nonaccrual loan activity
Six months ended June 30, (in millions)	2023		2022
Beginning balance	$	2,395	$	2,445
Additions	1,649		1,239
Reductions:
Paydowns and other	618		776
Gross charge-offs	281		83
Returned to performing status	85		326
Sales	52		9
Total reductions	1,036		1,194
Net changes	613		45
Ending balance	$	3,008	$	2,490

The following table presents net charge-offs/recoveries, which are defined as gross charge-offs less recoveries, for the three and six months ended June 30, 2023 and 2022. The amounts in the table below do not include gains or losses from sales of nonaccrual loans recognized in noninterest revenue.


Wholesale net charge-offs/(recoveries)
(in millions, except ratios)	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
Loans
Average loans retained	$	647,474		$	577,850		$	624,566		$	568,673
Gross charge-offs	189			71			294			123
Gross recoveries collected	(24)			(21)			(46)			(43)
Net charge-offs/(recoveries)	165			50			248			80
Net charge-off/(recovery) rate	0.10		%	0.03		%	0.08		%	0.03		%

Modified wholesale loans

The amortized cost of wholesale FDMs was $673 million and $854 million for the three and six months ended June 30, 2023, respectively. Refer to Note 1 and Note 12 for further information.

Wholesale TDRs were $60 million and $479 million for the three and six months ended June 30, 2022, respectively. Refer to Note 12 for further information on TDRs in prior periods.

Maturities and sensitivity to changes in interest rates

The table below sets forth loan maturities by scheduled repayments, by class of loan and the distribution between fixed and floating interest rates based on the stated terms of the loan agreements. Refer to Wholesale Credit Portfolio on pages 116-126 of JPMorgan Chase's 2022 Form 10-K for further information. Refer to Note 12 for further information on loan classes.


June 30, 2023 (in millions, except ratios)	1 year or less(f)		After 1 year through 5 years		After 5 years through 15 years		After 15 years		Total
Wholesale loans:
Secured by real estate(a)	$	17,025	$	61,188	$	50,001	$	41,680	$	169,894
Commercial and industrial	54,346		114,370		8,863		197		177,776
Other(b)	184,593		127,299		35,378		5,577		352,847
Total wholesale loans	$	255,964	$	302,857	$	94,242	$	47,454	$	700,517
Loans due after one year at fixed interest rates
Secured by real estate(c)			$	15,915	$	11,563	$	520
Commercial and industrial			5,775		1,238		66
Other			30,048		15,690		3,808
Loans due after one year at variable interest rates
Secured by real estate(d)			$	45,273	$	38,438	$	41,160
Commercial and industrial			108,595		7,625		131
Other(e)			97,251		19,688		1,769
Total wholesale loans			$	302,857	$	94,242	$	47,454

(a)Included $6.5 billion, $17.0 billion, and $9.9 billion of loans in 1 year or less, after 1 year through 5 years, and after 5 years though 15, respectively, associated with the First Republic acquisition.

(b)Included $12.0 billion, and $3.8 billion of loans in 1 year or less, and after 1 year through 5 years, respectively, associated with the First Republic acquisition.

(c)Included $9.7 billion, and $5.7 billion in after 1 year through 5 years, and after 5 years though 15, respectively, associated with the First Republic acquisition.

(d)Included $7.3 billion, and $4.2 billion in after 1 year through 5 years, and after 5 years though 15, respectively, associated with the First Republic acquisition.

(e)Included $3.2 billion in after 1 year through 5 years associated with the First Republic acquisition.

(f)Includes loans held-for-sale, demand loans and overdrafts.

The following table presents net charge-offs/recoveries, average retained loans and net charge-off/recovery rate by loan class for the three and six months ended June 30, 2023 and 2022.


	Three months ended June 30,
	Secured by real estate						Commercial and industrial						Other						Total
(in millions, except ratios)	2023			2022			2023			2022			2023			2022			2023			2022
Net charge-offs/(recoveries)	$	85		$	2		$	81		$	47		$	(1)		$	1		$	165		$	50
Average retained loans	153,590			120,441			171,684			162,702			322,200			294,707			647,474			577,850
Net charge-off/(recovery) rate	0.22		%	0.01		%	0.19		%	0.12		%	—		%	—		%	0.10		%	0.03		%


	Six months ended June 30,
	Secured by real estate						Commercial and industrial						Other						Total
(in millions, except ratios)	2023			2022			2023			2022			2023			2022			2023			2022
Net charge-offs/(recoveries)	$	90		$	8		$	151		$	54		$	7		$	18		$	248		$	80
Average retained loans	139,822			119,139			171,136			158,222			313,608			291,312			624,566			568,673
Net charge-off/(recovery) rate	0.13		%	0.01		%	0.18		%	0.07		%	—		%	0.01		%	0.08		%	0.03		%

Lending-related commitments

The Firm uses lending-related financial instruments, such as commitments (including revolving credit facilities) and guarantees, to address the financing needs of its clients. The contractual amounts of these financial instruments represent the maximum possible credit risk should the clients draw down on these commitments or when the Firm fulfills its obligations under these guarantees, and the clients subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees have historically been refinanced, extended, cancelled, or expired without being drawn upon or a default occurring. As a result, the Firm does not believe that the total contractual amount of these wholesale lending-related commitments is representative of the Firm’s expected future credit exposure or funding requirements. Refer to Note 24 for further information on wholesale lending-related commitments.

Receivables from customers

Receivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g., cash on deposit, and liquid and readily marketable debt or equity securities). Because of this collateralization, no allowance for credit losses is generally held against these receivables. To manage its credit risk the Firm establishes margin requirements and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.

Derivative contracts

Derivatives enable clients and counterparties to manage risk including credit risk and risks arising from fluctuations in interest rates, foreign exchange and equities and commodities prices. The Firm makes markets in derivatives in order to meet these needs and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. The Firm also uses derivative instruments to manage its own credit risk and other market risk exposure. The nature of the counterparty and the settlement mechanism of the derivative affect the credit risk to which the Firm is exposed. For over-the-counter ("OTC") derivatives the Firm is exposed to the credit risk of the derivative counterparty. For exchange-traded derivatives (“ETD”), such as futures and options, and cleared over-the-counter (“OTC-cleared”) derivatives, the Firm can also be exposed to the credit risk of the relevant central counterparty clearing house (“CCP”). Where possible, the Firm seeks to mitigate its credit risk exposures arising from derivative contracts through the use of legally enforceable master netting arrangements and collateral agreements.

The percentage of the Firm’s over-the-counter derivative transactions subject to collateral agreements — excluding foreign exchange spot trades, which are not typically covered by collateral agreements due to their short maturity, and centrally cleared trades that are settled daily — was approximately 88% and 87% at June 30, 2023, and December 31, 2022, respectively. Refer to Note 5 for additional information on the Firm’s use of collateral agreements and for a further discussion of derivative contracts, counterparties and settlement types.

The fair value of derivative receivables reported on the Consolidated balance sheets was $64.2 billion and $70.9 billion at June 30, 2023, and December 31, 2022, respectively. The decrease was primarily driven by market movements in CIB Markets. Derivative receivables represent the fair value of the derivative contracts after giving effect to legally enforceable master netting agreements and the related cash collateral held by the Firm.

In addition, the Firm held liquid securities and other cash collateral that may be used as security when the fair value of the client’s exposure is in the Firm’s favor. For these purposes, the definition of liquid securities is consistent with the definition of high quality liquid assets as defined in the LCR rule.

In management’s view, the appropriate measure of current credit risk should also take into consideration other collateral, which generally represents securities that do not qualify as high quality liquid assets under the LCR rule. The benefits of these additional collateral amounts for each counterparty are subject to a legally enforceable master netting agreement and limited to the net amount of the derivative receivables for each counterparty.

The Firm also holds additional collateral (primarily cash, G7 government securities, other liquid government agency and guaranteed securities, and corporate debt and equity securities) delivered by clients at the initiation of transactions, as well as collateral related to contracts that have a non-daily call frequency and collateral that the Firm has agreed to return but has not yet settled as of the reporting date. Although this collateral does not reduce the balances and is not included in the tables below, it is available as security against potential exposure that could arise should the fair value of the client’s derivative contracts move in the Firm’s favor. Refer to Note 5 for additional information on the Firm’s use of collateral agreements for derivatives transactions.

The following tables summarize the net derivative receivables and the internal ratings profile for the periods presented.


Derivative receivables
(in millions)	June 30, 2023		December 31, 2022
Total, net of cash collateral	$	64,217	$	70,880
Liquid securities and other cash collateral held against derivative receivables	(23,282)		(23,014)
Total, net of liquid securities and other cash collateral	$	40,935	$	47,866
Other collateral held against derivative receivables	(1,257)		(1,261)
Total, net of collateral	$	39,678	$	46,605


Ratings profile of derivative receivables
	June 30, 2023				December 31, 2022
(in millions, except ratios)	Exposure net of collateral		% of exposure net of collateral		Exposure net of collateral			% of exposure net of collateral
Investment-grade	$	31,560	80	%	$	35,097		75	%
Noninvestment-grade	8,118		20		11,508		(a)	25
Total	$	39,678	100	%	$	46,605		100	%

Credit portfolio management activities

The Firm uses credit derivatives for two primary purposes: first, in its capacity as a market-maker, and second, as an end-user, to manage the Firm’s own credit risk associated with traditional lending activities (loans and lending-related commitments) and derivatives counterparty exposure in the Firm’s wholesale businesses. In addition, the Firm obtains credit protection against certain loans in the retained wholesale portfolio through the issuance of credit-related notes. Information on credit portfolio management activities is provided in the table below.


Credit derivatives and credit-related notes used in credit portfolio management activities
	Notional amount of protection purchased and sold(a)
(in millions)	June 30, 2023		December 31, 2022
Credit derivatives and credit-related notes used to manage:
Loans and lending-related commitments	$	16,801	$	6,422
Derivative receivables	14,304		11,721
Credit derivatives and credit-related notes used in credit portfolio management activities	$	31,105	$	18,143

(a)Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.

Refer to Credit derivatives in Note 5 of this Form 10-Q and Note 5 of JPMorgan Chase’s 2022 Form 10-K for further information on credit derivatives and derivatives used in credit portfolio management activities.

ALLOWANCE FOR CREDIT LOSSES

The Firm’s allowance for credit losses represents management's estimate of expected credit losses over the remaining expected life of the Firm's financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The allowance for credit losses generally consists of:

•the allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated),

•the allowance for lending-related commitments, which is reflected in accounts payable and other liabilities on the Consolidated balance sheets, and

•the allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.

Discussion of changes in the allowance

The allowance for credit losses as of June 30, 2023 was $24.3 billion, reflecting a net addition of $2.7 billion from December 31, 2022.

The net addition to the allowance for credit losses included $1.5 billion, consisting of:

•$819 million in wholesale, predominantly driven by net downgrade activity, updates to certain assumptions related to office real estate in CB in the second quarter of 2023, and the impact of the additional weight placed on the adverse scenarios in the first quarter of 2023, and

The net addition also included $1.2 billion to establish the allowance for the First Republic loans and lending-related commitments in the second quarter of 2023.

The Firm has maintained the additional weight placed on the relative adverse scenario in the first quarter of 2023, reflecting an increased probability of a moderate recession due to tightening financial conditions.

The allowance for credit losses also reflected a reduction of $587 million as a result of the adoption of changes to the TDR accounting guidance on January 1, 2023. Refer to Note 1 for further information.

The Firm's allowance for credit losses is estimated using a weighted average of five internally developed macroeconomic scenarios. The adverse scenarios incorporate more punitive macroeconomic factors than the central case assumptions provided in the table below, resulting in a weighted average U.S. unemployment rate peaking at 5.8% in the third quarter of 2024, and a 1.5% lower U.S. real GDP exiting the fourth quarter of 2024.

The Firm’s central case assumptions reflected U.S. unemployment rates and U.S. real GDP as follows:


	Assumptions at June 30, 2023
	4Q23		2Q24		4Q24
U.S. unemployment rate(a)	4.2	%	4.9	%	5.0	%
YoY growth in U.S. real GDP(b)	0.5	%	—	%	1.0	%

	Assumptions at December 31, 2022
	2Q23		4Q23		2Q24
U.S. unemployment rate(a)	3.8	%	4.3	%	5.0	%
YoY growth in U.S. real GDP(b)	1.5	%	0.4	%	—	%

(a)Reflects quarterly average of forecasted U.S. unemployment rate.

(b)The year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percentage change in U.S. real GDP levels from the prior year.

Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.

Refer to Note 13 and Note 10 of JPMorgan Chase's 2022 Form 10-K for a description of the policies, methodologies and judgments used to determine the Firm’s allowance for credit losses on loans, lending-related commitments, and investment securities.

Refer to Consumer Credit Portfolio on pages 65-69, Wholesale Credit Portfolio on pages 70-79 and Note 12 for additional information on the consumer and wholesale credit portfolios.

Refer to Critical Accounting Estimates Used by the Firm on pages 91-93 for further information on the allowance for credit losses and related management judgments.


Allowance for credit losses and related information
	2023												2022
Six months ended June 30,	Consumer, excluding credit card			Credit card			Wholesale			Total			Consumer, excluding credit card			Credit card			Wholesale			Total
(in millions, except ratios)
Allowance for loan losses
Beginning balance at January 1,	$	2,040		$	11,200		$	6,486		$	19,726		$	1,765		$	10,250		$	4,371		$	16,386
Cumulative effect of a change in accounting principle(a)	(489)			(100)			2			(587)			NA			NA			NA			NA
Gross charge-offs	501			2,432			294			3,227			384			1,505			123			2,012
Gross recoveries collected	(247)			(386)			(46)			(679)			(311)			(419)			(43)			(773)
Net charge-offs/(recoveries)	254			2,046			248			2,548			73			1,086			80			1,239
Provision for loan losses	751			2,546			2,067			5,364			237			1,236			1,125			2,598
Other	—			—			25			25						—			5			5
Ending balance at June 30,	$	2,048		$	11,600		$	8,332		$	21,980		$	1,929		$	10,400		$	5,421		$	17,750

Allowance for lending-related commitments
Beginning balance at January 1,	$	76		$	—		$	2,306		$	2,382		$	113		$	—		$	2,148		$	2,261
Provision for lending-related commitments	52			—			(253)			(201)			(2)			—			(37)			(39)
Other	1			—			4			5			(1)			—			1			—
Ending balance at June 30,	$	129		$	—		$	2,057		$	2,186		$	110		$	—		$	2,112		$	2,222

Impairment methodology
Asset-specific(b)	$	(971)		$	—		$	478		$	(493)		$	(676)		$	227		$	332		$	(117)
Portfolio-based	3,019			11,600			7,854			22,473			2,605			10,173			5,089			17,867
Total allowance for loan losses	$	2,048		$	11,600		$	8,332		$	21,980		$	1,929		$	10,400		$	5,421		$	17,750

Impairment methodology
Asset-specific	$	—		$	—		$	65		$	65		$	—		$	—		$	78		$	78
Portfolio-based	129			—			1,992			2,121			110			—			2,034			2,144
Total allowance for lending-related commitments	$	129		$	—		$	2,057		$	2,186		$	110		$	—		$	2,112		$	2,222
Total allowance for investment securities	NA			NA			NA			$	104		NA			NA			NA			$	47
Total allowance for credit losses(c)(d)	$	2,177		$	11,600		$	10,389		$	24,270		$	2,039		$	10,400		$	7,533		$	20,019

Memo:
Retained loans, end-of-period	$	396,195		$	191,348		$	668,145		$	1,255,688		$	302,631		$	165,494		$	584,265		$	1,052,390
Retained loans, average	330,227			183,757			624,566			1,138,550			297,566			153,941			568,673			1,020,180
Credit ratios
Allowance for loan losses to retained loans	0.52		%	6.06		%	1.25		%	1.75		%	0.64		%	6.28		%	0.93		%	1.69		%
Allowance for loan losses to retained nonaccrual loans(e)	54			NM			321			345			46			NM			260			283
Allowance for loan losses to retained nonaccrual loans excluding credit card	54			NM			321			163			46			NM			260			117
Net charge-off/(recovery) rates	0.16			2.25			0.08			0.45			0.05			1.42			0.03			0.24

(a)Represents the impact to the allowance for loan losses upon the Firm's adoption of changes to the TDR accounting guidance on January 1, 2023. The adoption of this guidance eliminated the existing accounting and disclosure requirements for TDRs, including the requirement to measure the allowance using a discounted cash flow ("DCF") methodology. The Firm elected to change from an asset-specific allowance approach to its non-DCF, portfolio-based allowance approach for modified loans to troubled borrowers for all portfolios except collateral-dependent loans and nonaccrual risk-rated loans, for which the asset-specific allowance approach will continue to apply. Refer to Note 1 for further information.

(b)Includes collateral-dependent loans, including those for which foreclosure is deemed probable, and nonaccrual risk-rated loans for all periods presented. Prior periods also include non collateral-dependent TDRs or reasonably expected TDRs and modified purchased credit deteriorated ("PCD") loans.

(c)At June 30, 2023, in addition to the allowance for credit losses in the table above, the Firm also had an allowance for credit losses of $18 million associated with certain accounts receivable in CIB.

(d)As of June 30, 2023 included$1.2 billion allowance for credit losses associated with the First Republic acquisition.

(e)The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.

Allocation of allowance for loan losses

The table below presents a breakdown of the allowance for loan losses by loan class. Refer to Note 12 for further information on loan classes.


	June 30, 2023				December 31, 2022
(in millions, except ratios)	Allowance for loan losses		Percent of retained loans to total retained loans		Allowance for loan losses		Percent of retained loans to total retained loans
Residential real estate	$	1,022	26	%	$	1,070	22	%
Auto and other	1,026		5		970		6
Consumer, excluding credit card	2,048		32		2,040		28
Credit card	11,600		15		11,200		17
Total consumer	13,648		47		13,240		45
Secured by real estate	2,548		13		1,782		12
Commercial and industrial	3,837		14		3,507		15
Other	1,947		27		1,197		28
Total wholesale	8,332		53		6,486		55
Total(a)	$	21,980	100	%	$	19,726	100	%

(a) As of June 30, 2023 included $1.1 billion allowance for loan losses associated with the First Republic acquisition, consisting of $377 million in Residential real estate, $290 million in Secured by real estate, and $404 million in Commercial and industrial.

INVESTMENT PORTFOLIO RISK MANAGEMENT

Investment portfolio risk is the risk associated with the loss of principal or a reduction in expected returns on investments arising from the investment securities portfolio or from principal investments. The investment securities portfolio is predominantly held by Treasury and CIO in connection with the Firm’s balance sheet and asset-liability management objectives. Principal investments are predominantly privately-held financial instruments and are managed in the LOBs and Corporate. Investments are typically intended to be held over extended periods and, accordingly, the Firm has no expectation for short-term realized gains with respect to these investments.

Investment securities risk

Investment securities risk includes the exposure associated with a default in the payment of principal and interest. This risk is mitigated given that the investment securities portfolio held by Treasury and CIO predominantly consists of high-quality securities. At June 30, 2023, the Treasury and CIO investment securities portfolio, net of the allowance for credit losses, was $610.2 billion, and the average credit rating of the securities comprising the portfolio was AA+ (based upon external ratings where available, and where not available, based primarily upon internal risk ratings). Refer to Corporate segment results on pages 45-46 and Note 10 for further information on the investment securities portfolio and internal risk ratings. Refer to Liquidity Risk Management on pages 54-61 for further information on related liquidity risk. Refer to Market Risk Management on pages 84-89 for further information on the market risk inherent in the portfolio.

Principal investment risk

Principal investments are typically privately-held financial instruments representing ownership interests or other forms of junior capital. In general, principal investments include tax-oriented investments and investments made to enhance or accelerate the Firm’s business strategies and exclude those that are consolidated on the Firm's balance sheets. These investments are made by dedicated investing businesses or as part of a broader business strategy. The Firm’s principal investments are managed by the LOBs and Corporate and are reflected within their respective financial results. The Firm’s investments will continue to evolve in line with its strategies, including the Firm’s commitment to support underserved communities and minority-owned businesses.

The table below presents the aggregate carrying values of the principal investment portfolios as of June 30, 2023 and December 31, 2022.


(in billions)	June 30, 2023		December 31, 2022
Tax-oriented investments, primarily in alternative energy and affordable housing(a)	$	27.5	$	26.2
Private equity, various debt and equity instruments, and real assets(b)	11.4		10.8
Total carrying value	$	38.9	$	37.0

(a)As of June 30, 2023, included approximately $1.2 billion in tax-oriented investments in CIB associated with the First Republic acquisition.

(b)Includes the Firm’s 40% ownership in C6 Bank and 49% ownership in Viva Wallet.

Refer to page 130 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the Firm’s Investment Portfolio Risk Management governance and oversight.

MARKET RISK MANAGEMENT

Market risk is the risk associated with the effect of changes in market factors such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term. Refer to Market Risk Management on pages 131-138 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the Firm’s Market Risk Management organization, market risk measurement, risk monitoring and control, and predominant business activities that give rise to market risk.

Models used to measure market risk are inherently imprecise and are limited in their ability to measure certain risks or to predict losses. This imprecision may be heightened when sudden or severe shifts in market conditions occur. For additional discussion on model uncertainty refer to Estimations and Model Risk Management on page 148 of JPMorgan Chase’s 2022 Form 10-K.

Market Risk Management periodically reviews the Firm’s existing market risk measures to identify opportunities for enhancement, and to the extent appropriate, will calibrate those measures accordingly over time.

Value-at-risk

JPMorgan Chase utilizes value-at-risk (“VaR”), a statistical risk measure, to estimate the potential loss from adverse market moves in the current market environment. The Firm has a single VaR framework used as a basis for calculating Risk Management VaR and Regulatory VaR.

The Firm’s Risk Management VaR is calculated assuming a one-day holding period and an expected tail-loss methodology which approximates a 95% confidence level. For risk management purposes, the Firm believes this methodology provides a daily measure of risk that is closely aligned to risk management decisions made by the LOBs and Corporate and, along with other market risk measures, provides the appropriate information needed to respond to risk events. The Firm calculates separately a daily aggregated VaR in accordance with regulatory rules (“Regulatory VaR”), which is used to derive the Firm’s regulatory VaR-based capital requirements under Basel III.

The Firm’s VaR model calculations are periodically evaluated and enhanced in response to changes in the composition of the Firm’s portfolios, changes in market conditions, improvements in the Firm’s modeling techniques and measurements, and other factors. Such changes may affect historical comparisons of VaR results. Refer to Estimations and Model Risk Management on page 148 of JPMorgan Chase’s 2022 Form 10-K for information regarding model reviews and approvals.

Refer to page 133 of JPMorgan Chase’s 2022 Form 10-K for further information regarding VaR, including the inherent limitations, and the key differences between Risk Management VaR and Regulatory VaR. Refer to JPMorgan Chase’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for additional information on Regulatory VaR and the other components of market risk regulatory capital for the Firm (e.g., VaR-based measure, stressed VaR-based measure and the respective backtesting). Refer to Other risk measures on pages 136-138 of JPMorgan Chase’s 2022 Form 10-K for further information regarding nonstatistical market risk measures used by the Firm.

The table below shows the results of the Firm’s Risk Management VaR measure using a 95% confidence level. VaR can vary significantly as positions change, market volatility fluctuates, and diversification benefits change.


Total VaR
	Three months ended
	June 30, 2023							March 31, 2023						June 30, 2022
(in millions)	Avg.			Min		Max		Avg.		Min		Max		Avg.			Min		Max
CIB trading VaR by risk type
Fixed income	$	57		$	50	$	66	$	56	$	45	$	71	$	60		$	48	$	79
Foreign exchange	12			7		24		10		6		17		8			4		13
Equities	8			5		11		7		5		10		11			7		15
Commodities and other	12			8		17		15		11		19		14			12		17
Diversification benefit to CIB trading VaR(a)	(48)			NM		NM		(44)		NM		NM		(43)			NM		NM
CIB trading VaR	41			31		50		44		34		55		50			38		66
Credit Portfolio VaR(b)	14			11		18		11		8		17		17			6		31		(e)
Diversification benefit to CIB VaR(a)	(11)			NM		NM		(10)		NM		NM		(15)			NM		NM
CIB VaR	44			34		55		45		35		58		52			38		70
CCB VaR	9		(d)	6		14		11		6		15		5		(d)	4		6
Corporate and other LOB VaR(c)	13			11		15		15		13		17		10			9		11
Diversification benefit to other VaR(a)	(7)			NM		NM		(8)		NM		NM		(3)			NM		NM
Other VaR	15			13		19		18		14		22		12			10		14
Diversification benefit to CIB and other VaR(a)	(12)			NM		NM		(16)		NM		NM		(10)			NM		NM
Total VaR	$	47		$	36	$	56	$	47	$	37	$	57	$	54		$	41	$	71

(a)Diversification benefit represents the difference between the portfolio VaR and the sum of its individual components. This reflects the non-additive nature of VaR due to imperfect correlation across LOBs, Corporate, and risk types. For maximum and minimum VaR, diversification benefit is not meaningful as the maximum and minimum VaR for each portfolio may have occurred on different trading days than the components.

(b)Credit portfolio VaR 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. In the first quarter of 2022, in line with the Firm's internal model governance, the credit risk component of CVA related to certain counterparties was removed from Credit Portfolio VaR due to the widening of the credit spreads for those counterparties to elevated levels. The related hedges were also removed to maintain consistency. This exposure is now reflected in other sensitivity-based measures.

(c)Corporate and other LOB VaR includes a legacy private equity position in Corporate which is publicly traded.

(d)The increase in CCB VaR is driven by interest rate volatility impacting Home Lending warehouse loans, MSR, and related hedges.

(e)For the period ended June 30, 2022, maximum Credit Portfolio VaR remained elevated due to the effects of nickel price increases and the associated volatility in the nickel market which occurred during the first quarter of 2022.

Quarter over quarter results

Average total VaR was flat for the three months ended June 30, 2023, when compared with March 31, 2023, reflecting increases in fixed income offset by market volatility relating to commodities rolling out of the one-year historical look-back period.

Year over year results

Average total VaR decreased by $7 million for the three months ended June 30, 2023, compared with the same period in the prior year predominantly driven by risk reductions impacting Credit Portfolio VaR as well as fixed income.

The following graph presents daily Risk Management VaR for the five trailing quarters.

Daily Risk Management VaR

Second Quarter
2022

Third Quarter
2022

Fourth Quarter
2022

First Quarter
2023

Second Quarter
2023

VaR backtesting

The Firm performs daily VaR model backtesting, which compares the daily Risk Management VaR results with the daily gains and losses that are utilized for VaR backtesting purposes. The gains and losses depicted in the chart below do not reflect the Firm’s reported revenue as they exclude certain components of total net revenue, such as those associated with the execution of new transactions (i.e., intraday client-driven trading and intraday risk management activities), fees, commissions, other valuation adjustments and net interest income. These excluded components of total net revenue may more than offset the backtesting gain or loss on a particular day. The definition of backtesting gains and losses above is consistent with the requirements for backtesting under Basel III capital rules.

A backtesting exception occurs when the daily backtesting loss exceeds the daily Risk Management VaR for the prior day. Under the Firm’s Risk Management VaR methodology, assuming current changes in market values are consistent with the historical changes used in the simulation, the Firm would expect to incur VaR backtesting exceptions five times every 100 trading days on average. The number of VaR backtesting exceptions observed can differ from the statistically expected number of backtesting exceptions if the current level of market volatility is materially different from the level of market volatility during the 12 months of historical data used in the VaR calculation.

For the 12 months ended June 30, 2023, the Firm posted backtesting gains on 134 of the 259 days, and observed 15 VaR backtesting exceptions. For the three months ended June 30, 2023, the Firm posted backtesting gains on 34 of the 65 days, and observed two VaR backtesting exceptions.

The following chart presents the distribution of Firmwide daily backtesting gains and losses for the trailing 12 months and three months ended June 30, 2023. The daily backtesting losses are displayed as a percentage of the corresponding daily Risk Management VaR. The count of days with backtesting losses are shown in aggregate, in fifty percentage point intervals. Backtesting exceptions are displayed within the intervals that are greater than one hundred percent. The results in the chart below differ from the results of backtesting disclosed in the Market Risk section of the Firm’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are based on Regulatory VaR applied to the Firm’s covered positions.

Distribution of Daily Backtesting Gains and Losses

Structural interest rate risk management

The effect of interest rate exposure on the Firm’s reported net income is important as interest rate risk represents one of the Firm’s significant market risks. Interest rate risk arises not only from trading activities but also from the Firm’s traditional banking activities, which include extension of loans and credit facilities, taking deposits, issuing debt and the investment securities portfolio.

One way that the Firm evaluates its structural interest rate risk is through earnings-at-risk. Earnings-at-risk estimates the Firm’s interest rate exposure for a given interest rate scenario. It is presented as a sensitivity to a baseline, which includes net interest income and certain interest rate sensitive fees. The baseline uses market interest rates and in the case of deposits, pricing assumptions. The Firm conducts simulations of changes to this baseline for interest rate-sensitive assets and liabilities denominated in U.S. dollars and other currencies (“non-U.S. dollar” currencies). These simulations primarily include retained loans, deposits, deposits with banks, investment securities, long-term debt and any related interest rate hedges, and funds transfer pricing of other positions in risk management VaR and other sensitivity-based measures as described on page 132 of JPMorgan Chase’s 2022 Form 10-K.

Earnings-at-risk scenarios estimate the potential change to a net interest income baseline, over the following 12 months utilizing multiple assumptions. These scenarios include a parallel shift involving changes to both short-term and long-term rates by an equal amount; a steeper yield curve involving holding short-term rates constant and increasing long-term rates; and a flatter yield curve involving increasing short-term rates and holding long-term rates constant or holding short-term rates constant and decreasing long-term rates. These scenarios consider many different factors, including:

•The impact on exposures as a result of instantaneous changes in interest rates from baseline rates.

•Forecasted balance sheet, as well as modeled prepayment and reinvestment behavior, but excluding assumptions about actions that could be taken by the Firm or its clients and customers in response to instantaneous rate changes. Mortgage prepayment assumptions are based on the interest rates used in the scenarios compared with underlying contractual rates, the time since origination, and other factors which are updated periodically based on historical experience. Deposit forecasts are a key assumption in the Firm's earnings-at-risk. The baseline reflects certain assumptions relating to the reversal of Quantitative Easing that are highly uncertain and require management judgment. Therefore, the actual amount of deposits held by the Firm, at any particular time, could be impacted by actions the Federal Reserve may take as part of monetary policy, including through the use of the Reverse Repurchase Facility. In addition, there are other factors that impact the amount of deposits held at the Firm such

as the level of loans across the industry and competition for deposits.

•The pricing sensitivity of deposits, known as deposit betas, represent the amount by which deposit rates paid could change upon a given change in market interest rates. As part of the Firm's continuous evaluation and periodic enhancements to its earnings-at-risk calculations, the Firm updated its model in the second quarter of 2023 to incorporate deposit repricing lags impacting both consumer and wholesale deposits. The model change incorporated observed pricing and customer behavior in both rising and falling interest rate environments. Actual deposit rates paid may differ from the modeled assumptions, primarily due to customer behavior and competition for deposits.

The Firm’s earnings-at-risk scenarios are periodically evaluated and enhanced in response to changes in the composition of the Firm’s balance sheet, changes in market conditions, improvements in the Firm’s simulation and other factors. While a relevant measure of the Firm’s interest rate exposure, the earnings-at-risk analysis does not represent a forecast of the Firm’s net interest income. Refer to Outlook on page 8 for additional information.

The Firm’s U.S. dollar sensitivities are presented in the table below.


(in billions)	June 30, 2023		(a)	December 31, 2022
Parallel shift:
+100 bps shift in rates	$	2.5		$	(2.0)
-100 bps shift in rates	(2.2)			2.4
Steeper yield curve:
+100 bps shift in long-term rates	0.6			0.8
-100 bps shift in short-term rates	(1.6)			3.2
Flatter yield curve:
+100 bps shift in short-term rates	1.8			(2.8)
-100 bps shift in long-term rates	(0.6)			(0.9)

(a)Reflects the impact of the aforementioned model update to incorporate deposit repricing lags. Prior periods have not been revised.

In the absence of the model update to incorporate deposit repricing lags in the second quarter of 2023, the Firm's U.S. dollar sensitivities as of June 30, 2023, would have been lower by $4.2 billion to the +100 basis points shift in short-term and parallel rate scenarios and higher by $4.4 billion to the -100 basis points shift in short-term and parallel rate scenarios.

In addition, the change in the Firm’s U.S. dollar sensitivities as of June 30, 2023 compared to December 31, 2022 reflected the impact of changes in the Firm’s balance sheet including the impact of the First Republic acquisition.

As of June 30, 2023, the Firm’s sensitivity to the +/-100 basis points parallel shift in rates is primarily the result of a greater impact from assets repricing compared to the impact of liabilities repricing.

The Firm continues to convert certain operations, and to integrate products associated with the First Republic acquisition to align with the Firm’s business and operations. The Firm also continues to evaluate to which segments certain products associated with the First Republic acquisition, including deposits, should be allocated. Accordingly, earnings-at-risk results may be impacted in future periods.

The Firm’s non-U.S. dollar sensitivities are presented in the table below.


(in billions)	June 30, 2023		December 31, 2022
Parallel shift:
+100 bps shift in rates	$	0.8	$	0.7
-100 bps shift in rates	(0.8)		(0.6)
Steeper yield curve:
-100 bps shift in short-term rates	(0.7)		(0.6)
Flatter yield curve:
+100 bps shift in short-term rates	0.8		0.6

The results of the non-U.S. dollar interest rate scenario involving a steeper/flatter yield curve with long-term rates increasing/decreasing by 100 basis points and short-term rates staying at current levels were not material to the Firm’s earnings-at-risk at June 30, 2023 and December 31, 2022.

In addition to earnings-at-risk, the Firm also measures Economic Value Sensitivity (EVS). EVS stress tests the longer-term economic value of equity by measuring the sensitivity of the Firm’s current balance sheet, primarily retained loans, deposits, debt and investment securities as well as related hedges, under various interest rate scenarios. In accordance with the CTC structural interest rate risk policy, the Firm has established limits on EVS as a percentage of TCE.

Refer to Other Risk Measures on pages 136–138 of JPMorgan Chase’s 2022 Form 10-K for additional information.

Other sensitivity-based measures

The Firm quantifies the market risk of certain debt and equity and credit and funding-related exposures by assessing the potential impact on net revenue, other comprehensive income (“OCI”) and noninterest expense due to changes in relevant market variables. Refer to the predominant business activities that give rise to market risk on page 138 of JPMorgan Chase’s 2022 Form 10-K for additional information on the positions captured in other sensitivity-based measures.

The table below represents the potential impact to net revenue, OCI or noninterest expense for market risk-sensitive instruments that are not included in VaR or earnings-at-risk. Where appropriate, instruments used for hedging purposes are reported net of the positions being hedged. The sensitivities disclosed in the table below may not be representative of the actual gain or loss that would have been realized at June 30, 2023 and December 31, 2022, as the movement in market parameters across maturities may vary and are not intended to imply management’s expectation of future changes in these sensitivities.

Gain/(loss) (in millions)

June 30, 2023

December 31, 2022

Activity

Description

Sensitivity measure

Debt and equity(a)

Asset Management activities

Consists of seed capital and related hedges; fund co-investments(c); and certain deferred compensation and related hedges(d)

10% decline in market value

(58)

(56)

Other debt and equity

Consists of certain real estate-related fair value option elected loans, privately held equity and other investments held at fair value(c)

10% decline in market value

(1,016)

(1,046)

Credit- and funding-related exposures

Non-USD LTD cross-currency basis

Represents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD(e)

1 basis point parallel tightening of cross currency basis

(11)

(12)

Non-USD LTD hedges foreign currency (“FX”) exposure

Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(e)

10% depreciation of currency

Derivatives – funding spread risk

Impact of changes in the spread related to derivatives FVA(c)

1 basis point parallel increase in spread

(4)

CVA - counterparty credit risk(b)

Credit risk component of CVA and associated hedges

10% credit spread widening

—

(1)

Fair value option elected liabilities – funding spread risk

Impact of changes in the spread related to fair value option elected liabilities DVA(e)

1 basis point parallel increase in spread

Fair value option elected liabilities – interest rate sensitivity

Interest rate sensitivity on fair value option elected liabilities resulting from a change in the Firm’s own credit spread(e)

1 basis point parallel increase in spread

—

Interest rate sensitivity related to risk management of changes in the Firm’s own credit spread on the fair value option elected liabilities noted above(c)

1 basis point parallel increase in spread

—

(a)Excludes equity securities without readily determinable fair values that are measured under the measurement alternative. Refer to Note 2 for additional information.

(b)In the first quarter of 2022, in line with the Firm's internal model governance, the credit risk component of CVA related to certain counterparties was removed from Credit Portfolio VaR due to the widening of the credit spreads for those counterparties to elevated levels. The related hedges were also removed to maintain consistency. This exposure is now reflected in other sensitivity-based measures.

(c)Impact recognized through net revenue.

(d)Impact recognized through noninterest expense.

(e)Impact recognized through OCI.

COUNTRY RISK MANAGEMENT

The Firm, through its LOBs and Corporate, may be exposed to country risk resulting from financial, economic, political or other significant developments which adversely affect the value of the Firm’s exposures related to a particular country or set of countries. The Country Risk Management group actively monitors the various portfolios which may be impacted by these developments and measures the extent to which the Firm’s exposures are diversified given the Firm’s strategy and risk tolerance relative to a country.

Refer to pages 139-140 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of the Firm’s country risk management.

Risk Reporting

The following table presents the Firm’s top 20 exposures by country (excluding the U.S.) as of June 30, 2023 and their comparative exposures as of December 31, 2022. The selection of countries represents the Firm’s largest total exposures by individual country, based on the Firm’s internal country risk management approach, and does not represent the Firm’s view of any existing or potentially adverse credit conditions. Country exposures may fluctuate from period to period due to client activity and market flows.

The increases in exposures to Germany and the United Kingdom were primarily driven by increases in cash placed with the central banks of those countries, due to client-driven activities, including as a result of changes in interest rates.

The decrease in exposure to Australia was driven by a reduction in cash placed with the central bank of Australia due to client-driven activities resulting from changes in interest rates.

The Firm continues to monitor potential impacts to the Firm associated with the war in Ukraine. As of June 30, 2023, exposure to Russia was approximately $430 million. This amount excludes certain deposits placed on behalf of clients at the Depository Insurance Agency of Russia.


Top 20 country exposures (excluding the U.S.)(a)
(in billions)	June 30, 2023										December 31, 2022(f)
	Deposits with banks(b)		Lending(c)		Trading and investing(d)		Other(e)		Total exposure		Total exposure
Germany	$	94.0	$	12.5	$	5.5	$	0.3	$	112.3	$	93.2
United Kingdom	44.1		25.6		17.4		1.9		89.0		70.1
Japan	32.7		2.7		7.7		0.3		43.4		55.8
Brazil	1.9		4.6		11.2		—		17.7		17.8
Canada	2.4		10.7		3.0		0.2		16.3		14.4
Australia	5.0		6.3		3.0		—		14.3		25.7
Switzerland	7.6		3.3		1.4		1.7		14.0		15.3
France	0.4		10.7		0.1		1.4		12.6		18.1
China	3.3		5.0		4.1		—		12.4		13.7
Belgium	6.7		1.7		1.4		—		9.8		9.2
Singapore	1.8		3.9		3.6		0.2		9.5		9.9
India	1.2		3.6		3.9		0.6		9.3		9.0
South Korea	1.0		3.8		3.5		0.2		8.5		10.0
Netherlands	0.1		6.4		0.6		0.2		7.3		7.1
Mexico	1.0		4.3		2.0		—		7.3		5.4
Saudi Arabia	0.8		4.0		1.8		—		6.6		7.9
Spain	0.4		5.1		0.9		—		6.4		5.8
Hong Kong SAR	2.3		1.4		0.8		0.4		4.9		4.5
Luxembourg	0.8		2.6		1.3		—		4.7		5.3
Sweden	1.2		3.4		(0.1)		—		4.5		4.4

(a)Country exposures presented in the table reflect 88% of total Firmwide non-U.S. exposure, where exposure is attributed to an individual country based on the Firm’s internal country risk management approach, as of both June 30, 2023 and December 31, 2022.

(b)Predominantly represents cash placed with central banks.

(c)Includes loans and accrued interest receivable, lending-related commitments (net of eligible collateral and the allowance for credit losses). Excludes intra-day and operating exposures, such as those from settlement and clearing activities.

(d)Includes market-making inventory, investment securities, and counterparty exposure on derivative and securities financings net of eligible collateral and hedging. Includes exposure from single reference entity (“single-name”), index and other multiple reference entity transactions for which one or more of the underlying reference entities is in a country listed in the above table.

(e)Includes physical commodities inventory and clearing house guarantee funds.

(f)The country rankings presented in the table as of December 31, 2022, are based on the country rankings of the corresponding exposures at June 30, 2023, not actual rankings of such exposures as of December 31, 2022.

CRITICAL ACCOUNTING ESTIMATES USED BY THE FIRM

JPMorgan Chase’s accounting policies and use of estimates are integral to understanding its reported results. The Firm’s most complex accounting estimates require management’s judgment to ascertain the appropriate carrying value of assets and liabilities. The Firm has established policies and control procedures intended to ensure that estimation methods, including any judgments made as part of such methods, are well-controlled, independently reviewed and applied consistently from period to period. The methods used and judgments made reflect, among other factors, the nature of the assets or liabilities and the related business and risk management strategies, which may vary across the Firm’s businesses and portfolios. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. The Firm believes its estimates for determining the carrying value of its assets and liabilities are appropriate. The following is a brief description of the Firm’s critical accounting estimates involving significant judgments.

Allowance for credit losses

The Firm’s allowance for credit losses represents management’s estimate of expected credit losses over the remaining expected life of the Firm’s financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The allowance for credit losses generally consists of:

•The allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated).

•The allowance for lending-related commitments, which is reflected in accounts payable and other liabilities on the Consolidated balance sheets, and

•The allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.

The allowance for credit losses involves significant judgment on a number of matters including development and weighting of macroeconomic forecasts, incorporation of historical loss experience, assessment of risk characteristics, assignment of risk ratings, valuation of collateral, and the determination of remaining expected life. Refer to Note 10 and Note 13 of JPMorgan Chase's 2022 Form 10-K for further information on these judgments as well as the Firm’s policies and methodologies used to determine the Firm’s allowance for credit losses; and refer to Allowance for credit losses on pages 80-82 and Note 13 of this Form 10-Q for further information.

One of the most significant judgments involved in estimating the Firm’s allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the eight-quarter forecast period within the Firm’s methodology. The eight-quarter forecast incorporates hundreds of macroeconomic variables ("MEVs") that are relevant for exposures across the Firm, with modeled credit losses being driven primarily by a subset of less than twenty

variables. The specific variables that have the greatest effect on the modeled losses of each portfolio vary by portfolio and geography.

•Key MEVs for the consumer portfolio include regional U.S. unemployment and HPI.

•Key MEVs for the wholesale portfolio include U.S. unemployment, U.S. real GDP, U.S. equity prices, U.S. interest rates, corporate credit spreads, oil prices, commercial real estate prices and HPI.

Changes in the Firm’s assumptions and forecasts of economic conditions could significantly affect its estimate of expected credit losses in the portfolio at the balance sheet date or lead to significant changes in the estimate from one reporting period to the next.

As a result of the First Republic acquisition, the Firm recorded an allowance for credit losses for the loans acquired and lending-related commitments assumed as of May 1, 2023. Given the differences in risk rating methodologies for the First Republic Portfolio, and the ongoing integration of products and systems, the allowance for credit losses for the acquired wholesale portfolio was measured based on other facilities underwritten by the Firm with similar risk characteristics and not based on modeled estimates. As such, the First Republic wholesale portfolio is excluded from the modeled estimates sensitivity analysis below. The allowance for credit losses for predominantly all of the consumer portfolio was measured using the Firm’s modeled approach, as the consumer portfolio is predominantly residential real estate that has more commonly defined risk characteristics including loan to value ratio and credit score, and therefore is reflected in the sensitivity analysis below. Refer to Note 28 for additional information on the First Republic acquisition.

It is difficult to estimate how potential changes in any one factor or input might affect the overall allowance for credit losses because management considers a wide variety of factors and inputs in estimating the allowance for credit losses. Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and inputs may be directionally inconsistent, such that improvement in one factor or input may offset deterioration in others.

To consider the impact of a hypothetical alternate macroeconomic forecast, the Firm compared the modeled credit losses determined using its central and relative adverse macroeconomic scenarios, which are two of the five scenarios considered in estimating the allowances for loan losses and lending-related commitments. The central and relative adverse scenarios each included a full suite of MEVs, but differed in the levels, paths and peaks/troughs of those variables over the eight-quarter forecast period.

For example, compared to the Firm’s central scenario shown on page 80 and in Note 13, the Firm’s relative adverse scen

ario assumes an elevated U.S. unemployment rate, averaging approximately 1.6% higher

over the eight-quarter forecast, with a peak difference of

2.2% in the first quarter of 2024; lower

U.S. real GDP with a slower recovery, remaining approximately 3.1% lower at the end of the eight-quarter forecast, with a peak difference of approximately 3.4% in the third quarter of 2024; and lower national HPI with a peak difference of approximately 10.5% in the first quarter of 2025.

This analysis is not intended to estimate expected future changes in the allowance for credit losses, for a number of reasons, including:

•The allowance as of June 30, 2023, reflects credit losses beyond those estimated under the central scenario due to the weight placed on the adverse scenarios.

•The impacts of changes in many MEVs are both interrelated and nonlinear, so the results of this analysis cannot be simply extrapolated for more severe changes in macroeconomic variables.

•Expectations of future changes in portfolio composition and borrower behavior can significantly affect the allowance for credit losses.

To demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts as of June 30, 2023, the Firm compared the modeled estimates under its relative adverse scenario to its central scenario. Without considering offsetting or correlated effects in other qualitative components of the Firm’s allowance for credit losses, the comparison between these two scenarios for the exposures below reflect the following differences:

•An increase of approximately $750 million for residential real estate loans and lending-related commitments, including the First Republic portfolios

•An increase of approximately $2.4 billion for credit card loans

▪An increase of approximately $3.8 billion for wholesale loans and lending-related commitments, excluding the First Republic portfolios.

This analysis relates only to the modeled credit loss estimates and is not intended to estimate changes in the overall allowance for credit losses as it does not reflect any potential changes in other adjustments to the quantitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these modeled lifetime loss estimates based on then-current circumstances and conditions.

Recognizing that forecasts of macroeconomic conditions are inherently uncertain, particularly in light of the recent economic conditions, the Firm believes that its process to consider the available information and associated risks and uncertainties is appropriately governed and that its estimates of expected credit losses were reasonable and appropriate for the period ended June 30, 2023.

Fair value

JPMorgan Chase carries a portion of its assets and liabilities at fair value. The majority of such assets and liabilities are measured at fair value on a recurring basis, including derivatives, structured note products and certain securities financing agreements. Certain assets and liabilities are measured at fair value on a nonrecurring basis, including certain mortgage, home equity and other loans, where the carrying value is based on the fair value of the underlying collateral.

Assets measured at fair value

The following table includes the Firm’s assets measured at fair value and the portion of such assets that are classified within level 3 of the fair value hierarchy. Refer to Note 2 for further information.


June 30, 2023 (in millions, except ratios)	Total assets at fair value		Total level 3 assets
Federal funds sold and securities purchased under resale agreements	$	322,579	$	—
Securities borrowed	55,905		—
Trading assets:
Trading–debt and equity instruments	572,739		3,313
Derivative receivables(a)	64,217		10,749
Total trading assets	636,956		14,062
AFS securities	203,262		267
Loans	38,789		3,808
MSRs	8,229		8,229
Other	13,250		417
Total assets measured at fair value on a recurring basis	1,278,970		26,783
Total assets measured at fair value on a nonrecurring basis	1,936		1,126
Total assets measured at fair value	$	1,280,906	$	27,909
Total Firm assets	$	3,868,240
Level 3 assets at fair value as a percentage of total Firm assets(a)			0.7		%
Level 3 assets at fair value as a percentage of total Firm assets at fair value(a)			2.2		%

(a)For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $10.7 billion of derivative receivables classified as level 3 does not reflect the netting adjustment as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.

Valuation

Estimating fair value requires the application of judgment. The type and level of judgment required is largely dependent on the amount of observable market information available to the Firm. For instruments valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs and are therefore classified within level 3 of the fair value hierarchy, judgments used to estimate fair value are more significant than those required when estimating the fair value of instruments classified within levels 1 and 2.

In arriving at an estimate of fair value for an instrument within level 3, management must first determine the appropriate valuation model or other valuation technique to use. Second, the lack of observability of certain significant inputs requires management to assess relevant empirical data in deriving valuation inputs including, for example, transaction details, yield curves, interest rates, prepayment speeds, default rates, volatilities, correlations, prices (such as commodity, equity or debt prices), valuations of comparable instruments, foreign exchange rates and credit curves. Refer to Note 2 for a further discussion of the valuation of level 3 instruments, including unobservable inputs used.

For instruments classified in levels 2 and 3, management judgment must be applied to assess the appropriate level of valuation adjustments to reflect counterparty credit quality, the Firm’s creditworthiness, market funding rates, liquidity considerations, unobservable parameters, and for portfolios that meet specified criteria, the size of the net open risk position. The judgments made are typically affected by the type of product and its specific contractual terms, and the level of liquidity for the product or within the market as a whole. In periods of heightened market volatility and uncertainty judgments are further affected by the wider variation of reasonable valuation estimates, particularly for positions that are less liquid. Refer to Note 2 for a further discussion of valuation adjustments applied by the Firm.

Imprecision in estimating unobservable market inputs or other factors can affect the amount of gain or loss recorded for a particular position. Furthermore, while the Firm believes its valuation methods are appropriate and consistent with those of other market participants, the methods and assumptions used reflect management judgment and may vary across the Firm’s businesses and portfolios.

The Firm uses various methodologies and assumptions in the determination of fair value. The use of methodologies or assumptions different than those used by the Firm could result in a different estimate of fair value at the reporting date. Refer to Note 2 for a detailed discussion of the Firm’s valuation process and hierarchy, and its determination of fair value for individual financial instruments.

Credit card rewards liability

The credit card rewards liability was $12.2 billion and $11.3 billion at June 30, 2023 and December 31, 2022, respectively, and is recorded in accounts payable and other liabilities on the Consolidated balance sheets. The increase in the liability was predominantly driven by continued growth in rewards points earned on higher spend and promotional offers outpacing redemptions throughout 2023, and, to a lesser extent, adjustments to certain reward program terms in the second quarter. Refer to pages 151-152 of JPMorgan Chase’s 2022 Form 10-K for a description of the significant assumptions and sensitivities, associated with the Firm’s credit card rewards liability.

Income taxes

Refer to Income taxes on page 152 of JPMorgan Chase’s 2022 Form 10-K for a description of the significant assumptions, judgments and interpretations associated with the accounting for income taxes.

Goodwill impairment

Management applies significant judgment when testing goodwill for impairment. Refer to Goodwill impairment on page 151 of JPMorgan Chase’s 2022 Form 10-K for a description of the significant valuation judgments associated with goodwill impairment.

Refer to Note 15 for additional information on goodwill, including the goodwill impairment assessment as of June 30, 2023.

Litigation reserves

Refer to Note 26 of this Form 10-Q, and Note 30 of JPMorgan Chase’s 2022 Form 10-K for a description of the significant estimates and judgments associated with establishing litigation reserves.

ACCOUNTING AND REPORTING DEVELOPMENTS


Financial Accounting Standards Board (“FASB”) Standards Adopted since January 1, 2021
Standard	Summary of guidance	Effects on financial statements
Reference Rate Reform Issued March 2020 and updated January 2021 and December 2022	•Provides optional expedients and exceptions to current accounting guidance when financial instruments, hedge accounting relationships, and other transactions are amended due to reference rate reform.	•Issued and effective March 12, 2020. The January 7, 2021 and December 21, 2022 updates were effective when issued. •Refer to Accounting and Reporting Developments on page 153 of JPMorgan Chase's 2022 Form 10-K for further information.
FASB Standards Adopted since January 1, 2023
Standard	Summary of guidance	Effects on financial statements
Derivatives and Hedging: Fair Value Hedging – Portfolio Layer Method Issued March 2022	•Expands the current ability to hedge a portfolio of prepayable assets to allow more of the portfolio to be hedged. Non-prepayable assets can also be included in the same portfolio, thus increasing the size of the portfolio and the amount available to be hedged. •Clarifies the types of derivatives that can be used as hedges, and the balance sheet presentation and disclosure requirements for the hedge accounting adjustments. •Allows a one-time reclassification from HTM to AFS upon adoption.	•Adopted prospectively on January 1, 2023. •Refer to Note 1 for further information.
Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures Issued March 2022	•Eliminates existing accounting and disclosure requirements for Troubled Debt Restructurings, including the requirement to measure the allowance using a discounted cash flow methodology. •Requires disclosure of loan modifications for borrowers experiencing financial difficulty involving principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or a combination of these modifications. •Requires disclosure of current period loan charge-off information by origination year. •May be adopted prospectively, or by using a modified retrospective method wherein the effect of adoption is reflected as an adjustment to retained earnings at the effective date.	•Adopted under the modified retrospective method on January 1, 2023. •Refer to Note 1 for further information.
FASB Standards Issued but not yet Adopted
Standard	Summary of guidance	Effects on financial statements
Investments - Equity Method and Joint Ventures: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method Issued March 2023	•Expands the ability to elect proportional amortization for more types of tax-oriented investments (beyond low income housing tax credit investments) on a program-by-program basis. •May be adopted using a full retrospective method, or a modified retrospective method wherein the effect of adoption is reflected as an adjustment to retained earnings at the effective date.	•Required effective date: January 1, 2024. (a) •The Firm is currently evaluating the potential impact on the Consolidated Financial Statements.

(a) Early adoption is permitted.

FORWARD-LOOKING STATEMENTS

From time to time, the Firm has made and will make forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe,” or other words of similar meaning. Forward-looking statements provide JPMorgan Chase’s current expectations or forecasts of future events, circumstances, results or aspirations. JPMorgan Chase’s disclosures in this Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Firm also may make forward-looking statements in its other documents filed or furnished with the SEC. In addition, the Firm’s senior management may make forward-looking statements orally to investors, analysts, representatives of the media and others.

All forward-looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Firm’s control. JPMorgan Chase’s actual future results may differ materially from those set forth in its forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ from those in the forward-looking statements:

•Local, regional and global business, economic and political conditions and geopolitical events, including the war in Ukraine;

•Changes in laws, rules and regulatory requirements, including capital and liquidity requirements affecting the Firm’s businesses, and the ability of the Firm to address those requirements;

•Heightened regulatory and governmental oversight and scrutiny of JPMorgan Chase’s business practices, including dealings with retail customers;

•Changes in trade, monetary and fiscal policies and laws;

•Changes in the level of inflation;

•Changes in income tax laws, rules and regulations;

•Changes in FDIC assessments;

•Securities and capital markets behavior, including changes in market liquidity and volatility;

•Changes in investor sentiment or consumer spending or savings behavior;

•Ability of the Firm to manage effectively its capital and liquidity;

•Changes in credit ratings assigned to the Firm or its subsidiaries;

•Damage to the Firm’s reputation;

•Ability of the Firm to appropriately address social, environmental and sustainability concerns that may arise, including from its business activities;

•Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption, including, but not limited to, in the interest rate environment;

•Technology changes instituted by the Firm, its counterparties or competitors;

•The effectiveness of the Firm’s control agenda;

•Ability of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;

•Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;

•Ability of the Firm to attract and retain qualified and diverse employees;

•Ability of the Firm to control expenses;

•Competitive pressures;

•Changes in the credit quality of the Firm’s clients, customers and counterparties;

•Adequacy of the Firm’s risk management framework, disclosure controls and procedures and internal control over financial reporting;

•Adverse judicial or regulatory proceedings;

•Ability of the Firm to determine accurate values of certain assets and liabilities;

•Occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, epidemics or pandemics, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond the Firm's control, and the Firm’s ability to deal effectively with disruptions caused by the foregoing;

•Ability of the Firm to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities;

•Ability of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties;

•Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and

•The other risks and uncertainties detailed in Part I, Item 1A: Risk Factors in JPMorgan Chase’s 2022 Form 10-K.

Any forward-looking statements made by or on behalf of the Firm speak only as of the date they are made, and JPMorgan Chase does not undertake to update any forward-looking statements. The reader should, however, consult any further disclosures of a forward-looking nature the Firm may make in any subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

JPMorgan Chase & Co.

Consolidated statements of income (unaudited)


	Three months ended June 30,				Six months ended June 30,
(in millions, except per share data)	2023		2022		2023		2022
Revenue
Investment banking fees	$	1,513	$	1,586	$	3,162	$	3,594
Principal transactions	6,910		4,990		14,525		10,095
Lending- and deposit-related fees	1,828		1,873		3,448		3,712
Asset management fees	3,774		3,517		7,239		7,169
Commissions and other fees	1,739		1,723		3,434		3,433

Investment securities losses	(900)		(153)		(1,768)		(547)
Mortgage fees and related income	278		378		499		838
Card income	1,094		1,133		2,328		2,108
Other income	3,292		540		4,299		2,030
Noninterest revenue	19,528		15,587		37,166		32,432
Interest income	41,644		18,646		78,648		34,142
Interest expense	19,865		3,518		36,158		5,142
Net interest income	21,779		15,128		42,490		29,000
Total net revenue	41,307		30,715		79,656		61,432

Provision for credit losses	2,899		1,101		5,174		2,564

Noninterest expense
Compensation expense	11,216		10,301		22,892		21,088
Occupancy expense	1,070		1,129		2,185		2,263
Technology, communications and equipment expense	2,267		2,376		4,451		4,736
Professional and outside services	2,561		2,469		5,009		5,041
Marketing	1,122		881		2,167		1,801
Other expense	2,586		1,593		4,225		3,011
Total noninterest expense	20,822		18,749		40,929		37,940
Income before income tax expense	17,586		10,865		33,553		20,928
Income tax expense	3,114		2,216		6,459		3,997
Net income	$	14,472	$	8,649	$	27,094	$	16,931
Net income applicable to common stockholders	$	14,011	$	8,195	$	26,204	$	16,039
Net income per common share data
Basic earnings per share	$	4.76	$	2.77	$	8.86	$	5.40
Diluted earnings per share	4.75		2.76		8.85		5.39

Weighted-average basic shares	2,943.8		2,962.2		2,956.1		2,969.6
Weighted-average diluted shares	2,948.3		2,966.3		2,960.5		2,973.7

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

JPMorgan Chase & Co.

Consolidated statements of comprehensive income (unaudited)


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Net income	$	14,472	$	8,649	$	27,094	$	16,931
Other comprehensive income/(loss), after–tax
Unrealized gains/(losses) on investment securities	757		(4,031)		2,969		(11,484)
Translation adjustments, net of hedges	70		(679)		267		(741)
Fair value hedges	11		51		(10)		161
Cash flow hedges	(497)		(1,348)		301		(4,139)
Defined benefit pension and OPEB plans	(6)		20		(61)		87
DVA on fair value option elected liabilities	(207)		1,185		(415)		1,831
Total other comprehensive income/(loss), after–tax	128		(4,802)		3,051		(14,285)
Comprehensive income	$	14,600	$	3,847	$	30,145	$	2,646

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

JPMorgan Chase & Co.

Consolidated balance sheets (unaudited)


(in millions, except share data)	June 30, 2023		December 31, 2022
Assets
Cash and due from banks	$	26,064	$	27,697
Deposits with banks	469,059		539,537
Federal funds sold and securities purchased under resale agreements (included $322,579 and $311,883 at fair value)	325,628		315,592
Securities borrowed (included $55,905 and $70,041 at fair value)	163,563		185,369
Trading assets (included assets pledged of $142,625 and $93,687)	636,996		453,799
Available-for-sale securities (amortized cost of $209,876 and $216,188; included assets pledged of $12,864 and $9,158)	203,262		205,857
Held-to-maturity securities	408,941		425,305
Investment securities, net of allowance for credit losses	612,203		631,162
Loans (included $38,789 and $42,079 at fair value)	1,300,069		1,135,647
Allowance for loan losses	(21,980)		(19,726)
Loans, net of allowance for loan losses	1,278,089		1,115,921
Accrued interest and accounts receivable	111,561		125,189
Premises and equipment	29,493		27,734
Goodwill, MSRs and other intangible assets	64,238		60,859
Other assets (included $14,166 and $14,921 at fair value and assets pledged of $5,844 and $7,998)	151,346		182,884
Total assets(a)	$	3,868,240	$	3,665,743
Liabilities
Deposits (included $51,568 and $28,620 at fair value)	$	2,398,962	$	2,340,179
Federal funds purchased and securities loaned or sold under repurchase agreements (included $216,604 and $151,999 at fair value)	266,272		202,613
Short-term borrowings (included $17,942 and $15,792 at fair value)	41,022		44,027
Trading liabilities	178,809		177,976
Accounts payable and other liabilities (included $5,101 and $7,038 at fair value)	286,934		300,141
Beneficial interests issued by consolidated VIEs (included $1 and $5 at fair value)	19,647		12,610
Long-term debt (included $78,609 and $72,281 at fair value)	364,078		295,865
Total liabilities(a)	3,555,724		3,373,411
Commitments and contingencies (refer to Notes 22, 23 and 24)
Stockholders’ equity
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,740,375 shares)	27,404		27,404
Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares)	4,105		4,105
Additional paid-in capital	89,578		89,044
Retained earnings	317,359		296,456
Accumulated other comprehensive losses	(14,290)		(17,341)
Treasury stock, at cost (1,198,848,622 and 1,170,676,094 shares)	(111,640)		(107,336)
Total stockholders’ equity	312,516		292,332
Total liabilities and stockholders’ equity	$	3,868,240	$	3,665,743

(a) The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at June 30, 2023, and December 31, 2022. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. Refer to Note 14 for a further discussion.


(in millions)	June 30, 2023		December 31, 2022
Assets
Trading assets	$	2,368	$	2,151
Loans	39,125		34,411
All other assets	532		550
Total assets	$	42,025	$	37,112
Liabilities
Beneficial interests issued by consolidated VIEs	$	19,647	$	12,610
All other liabilities	247		279
Total liabilities	$	19,894	$	12,889

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

JPMorgan Chase & Co.

Consolidated statements of changes in stockholders’ equity (unaudited)


	Three months ended June 30,				Six months ended June 30,
(in millions, except per share data)	2023		2022		2023		2022
Preferred stock
Balance at the beginning of the period	$	27,404	$	32,838	$	27,404	$	34,838
Issuance	—		—		—		—
Redemption	—		—		—		(2,000)
Balance at June 30	27,404		32,838		27,404		32,838

Common stock
Balance at the beginning and end of the period	4,105		4,105		4,105		4,105

Additional paid-in capital
Balance at the beginning of the period	89,155		88,260		89,044		88,415
Shares issued and commitments to issue common stock for employee share-based compensation awards, and related tax effects	423		354		534		199

Balance at June 30	89,578		88,614		89,578		88,614

Retained earnings
Balance at the beginning of the period	306,208		277,177		296,456		272,268
Cumulative effect of change in accounting principles	—		—		449		—
Net income	14,472		8,649		27,094		16,931
Dividends declared:
Preferred stock	(373)		(410)		(729)		(807)
Common stock ($1.00 and $1.00 per share and $2.00 and $2.00 per share, respectively)	(2,948)		(2,971)		(5,911)		(5,947)
Balance at June 30	317,359		282,445		317,359		282,445

Accumulated other comprehensive income/(loss)
Balance at the beginning of the period	(14,418)		(9,567)		(17,341)		(84)
Other comprehensive income/(loss), after-tax	128		(4,802)		3,051		(14,285)
Balance at June 30	(14,290)		(14,369)		(14,290)		(14,369)

Treasury stock, at cost
Balance at the beginning of the period	(109,372)		(106,914)		(107,336)		(105,415)
Repurchase	(2,316)		(622)		(5,271)		(3,122)
Reissuance	48		46		967		1,047
Balance at June 30	(111,640)		(107,490)		(111,640)		(107,490)

Total stockholders’ equity	$	312,516	$	286,143	$	312,516	$	286,143

Effective January 1, 2023, the Firm adopted the Financial Instruments – Credit Losses: Troubled Debt Restructurings and Derivatives and Hedging: Fair Value Hedging – Portfolio Layer Method accounting guidance. Refer to Note 1 for further information.

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

JPMorgan Chase & Co.

Consolidated statements of cash flows (unaudited)


	Six months ended June 30,
(in millions)	2023		2022
Operating activities
Net income	$	27,094	$	16,931
Adjustments to reconcile net income to net cash used in operating activities:
Provision for credit losses	5,174		2,564
Depreciation and amortization	2,156		3,609
Deferred tax (benefit)/expense	(2,238)		(2,086)
Bargain purchase gain associated with the First Republic acquisition	(2,712)		—
Other	3,008		2,172
Originations and purchases of loans held-for-sale	(48,270)		(102,857)
Proceeds from sales, securitizations and paydowns of loans held-for-sale	47,746		116,764
Net change in:
Trading assets	(178,766)		(53,816)
Securities borrowed	21,835		3,379
Accrued interest and accounts receivable	16,107		(43,051)
Other assets	44,599		(14,930)
Trading liabilities	(4,846)		23,646
Accounts payable and other liabilities	(24,563)		70,976
Other operating adjustments	1,300		800
Net cash provided by/(used in) operating activities	(92,376)		24,101
Investing activities
Net change in:
Federal funds sold and securities purchased under resale agreements	(9,816)		(60,833)
Held-to-maturity securities:
Proceeds from paydowns and maturities	13,762		20,952
Purchases	(4,141)		(27,490)
Available-for-sale securities:
Proceeds from paydowns and maturities	23,470		21,913
Proceeds from sales	69,875		36,217
Purchases	(52,433)		(66,200)
Proceeds from sales and securitizations of loans held-for-investment	19,526		22,185
Other changes in loans, net	(33,353)		(67,802)


Net cash used in the First Republic acquisition	(9,920)		—
All other investing activities, net	(11,419)		(4,753)
Net cash provided by/(used in) investing activities	5,551		(125,811)
Financing activities
Net change in:
Deposits	(27,782)		5,841
Federal funds purchased and securities loaned or sold under repurchase agreements	63,590		28,586
Short-term borrowings	(3,135)		5,622
Beneficial interests issued by consolidated VIEs	7,708		552
Proceeds from long-term borrowings	19,357		45,873
Payments of long-term borrowings	(32,003)		(25,991)

Redemption of preferred stock	—		(2,000)
Treasury stock repurchased	(5,167)		(3,162)
Dividends paid	(6,651)		(6,774)
All other financing activities, net	(1,275)		423
Net cash provided by financing activities	14,642		48,970
Effect of exchange rate changes on cash and due from banks and deposits with banks	72		(18,834)
Net decrease in cash and due from banks and deposits with banks	(72,111)		(71,574)
Cash and due from banks and deposits with banks at the beginning of the period	567,234		740,834
Cash and due from banks and deposits with banks at the end of the period	$	495,123	$	669,260
Cash interest paid	$	35,250	$	4,457
Cash income taxes paid, net	5,466		3,100

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

100

Refer to the Glossary of Terms and Acronyms on pages 200–205 for definitions of terms and acronyms used throughout the Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1 – Basis of presentation

JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the U.S., with operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the “First Republic acquisition”) from the Federal Deposit Insurance Corporation (“FDIC”). The Firm continues to convert certain operations, and to integrate clients, products and services, associated with the First Republic acquisition, to align with the Firm’s businesses and operations. The Firm also continues to evaluate to which segments certain clients, products and services associated with the First Republic acquisition, including deposits, should be allocated. Accordingly, reporting classifications and allocations may change in future periods including across the Firm's segments. Refer to Note 27 for a further discussion of the Firm’s business segments and Note 28 for additional information on the First Republic acquisition.

The accounting and financial reporting policies of JPMorgan Chase and its subsidiaries conform to U.S. GAAP. Additionally, where applicable, the policies conform to the accounting and reporting guidelines prescribed by regulatory authorities.

The unaudited Consolidated Financial Statements prepared in conformity with U.S. GAAP require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expense, and the disclosures of contingent assets and liabilities. Actual results could be different from these estimates. In the opinion of management, all normal, recurring adjustments have been included such that this interim financial information is fairly stated.

These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, and related notes thereto, included in JPMorgan Chase’s 2022 Form 10-K.

Certain amounts reported in prior periods have been revised to conform with the current presentation.

Consolidation

The Consolidated Financial Statements include the accounts of JPMorgan Chase and other entities in which the Firm has a controlling financial interest. All material intercompany balances and transactions have been eliminated.

Assets held for clients in an agency or fiduciary capacity by the Firm are not assets of JPMorgan Chase and are not included on the Consolidated balance sheets.

The Firm determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity.

Refer to Notes 1 and 14 of JPMorgan Chase’s 2022 Form 10-K for a further description of JPMorgan Chase’s accounting policies regarding consolidation.

Offsetting assets and liabilities

U.S. GAAP permits entities to present derivative receivables and derivative payables with the same counterparty and the related cash collateral receivables and payables on a net basis on the Consolidated balance sheets when a legally enforceable master netting agreement exists. U.S. GAAP also permits securities financing balances to be presented on a net basis when specified conditions are met, including the existence of a legally enforceable master netting agreement. The Firm has elected to net such balances where it has determined that the specified conditions are met. Refer to Note 1 of JPMorgan Chase’s 2022 Form 10-K for further information on offsetting assets and liabilities.

Accounting standards adopted January 1, 2023

Derivatives and Hedging: Fair Value Hedging – Portfolio Layer Method

The adoption of this guidance expanded the ability to hedge a portfolio of prepayable assets to allow more of the portfolio to be hedged. Non-prepayable assets can also be included in the same portfolio, thus increasing the size of the portfolio and the amount available to be hedged. This guidance also clarified the types of derivatives that can be used as hedges, and the balance sheet presentation and disclosure requirements for the hedge accounting adjustments. As permitted by the guidance, the Firm elected to transfer HTM securities to AFS and designate those securities in a portfolio layer method hedge upon adoption. The adoption impact of the transfer on retained earnings was not material.

Refer to Note 5 and Note 10 for additional information.

Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures

The adoption of this guidance eliminated the accounting and disclosure requirements for TDRs, including the requirement to measure the allowance using a discounted cash flow (“DCF”) methodology, and allowed the option of a non-DCF portfolio-based approach for modified loans to troubled borrowers. If a DCF methodology is still applied for these modified loans, the discount rate must be the post-

101

modification effective interest rate, instead of the pre-modification effective interest rate.

The Firm elected to apply its non-DCF, portfolio-based allowance approach for modified loans to troubled borrowers for all portfolios except modified nonaccrual risk-rated loans which the Firm elected to continue applying a DCF methodology. Refer to Note 13 of JPMorgan Chase’s 2022 Form 10-K for a description of the portfolio-based allowance approach and the asset-specific allowance approach.

This guidance was adopted under the modified retrospective method which resulted in a net decrease to the allowance for credit losses of $587 million and an increase to retained earnings of $446 million, after-tax, predominantly driven by residential real estate and credit card.

The adoption of this guidance eliminated the disclosure requirements for TDRs including the requirement to assess whether a modification is reasonably expected or involves a concession. The new guidance requires disclosure for loan modifications to borrowers experiencing financial difficulty consisting of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or a combination of these modifications. The Firm has defined these types of modifications as financial difficulty modifications ("FDMs"). As a result of the elimination of the requirement to assess whether a modification is reasonably expected or involves a concession, the population of loans considered FDMs will differ from those previously considered TDRs. This guidance also requires disclosure of current period gross charge-offs by vintage origination year.

Refer to Note 12 for further information.

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Note 2 – Fair value measurement

Refer to Note 2 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the Firm’s valuation methodologies for assets, liabilities and lending-related commitments measured at fair value and the fair value hierarchy.

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The following table presents the assets and liabilities reported at fair value as of June 30, 2023, and December 31, 2022, by major product category and fair value hierarchy.


Assets and liabilities measured at fair value on a recurring basis
	Fair value hierarchy						Derivative netting adjustments(f)

June 30, 2023 (in millions)	Level 1		Level 2		Level 3				Total fair value
Federal funds sold and securities purchased under resale agreements	$	—	$	322,579	$	—	$	—	$	322,579
Securities borrowed	—		55,905		—		—		55,905
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies(a)	—		88,769		706		—		89,475
Residential – nonagency	—		2,684		5		—		2,689
Commercial – nonagency	—		1,517		6		—		1,523
Total mortgage-backed securities	—		92,970		717		—		93,687
U.S. Treasury, GSEs and government agencies(a)	129,042		9,204		—		—		138,246
Obligations of U.S. states and municipalities	—		6,782		6		—		6,788
Certificates of deposit, bankers’ acceptances and commercial paper	—		2,834		—		—		2,834
Non-U.S. government debt securities	41,423		63,986		199		—		105,608
Corporate debt securities	—		33,106		522		—		33,628
Loans	—		6,984		1,105		—		8,089
Asset-backed securities	—		2,497		14		—		2,511
Total debt instruments	170,465		218,363		2,563		—		391,391
Equity securities	148,222		1,337		631		—		150,190
Physical commodities(b)	2,442		11,265		6		—		13,713
Other	—		17,332		113		—		17,445
Total debt and equity instruments(c)	321,129		248,297		3,313		—		572,739
Derivative receivables:
Interest rate	1,988		282,125		4,199		(260,603)		27,709
Credit	—		12,535		1,150		(12,440)		1,245
Foreign exchange	204		226,130		1,345		(205,485)		22,194
Equity	—		57,619		3,773		(54,068)		7,324
Commodity	—		17,358		282		(11,895)		5,745
Total derivative receivables	2,192		595,767		10,749		(544,491)		64,217
Total trading assets(d)	323,321		844,064		14,062		(544,491)		636,956
Available-for-sale securities:
Mortgage-backed securities:
U.S. GSEs and government agencies(a)	1		79,767		—		—		79,768
Residential – nonagency	—		3,544		—		—		3,544
Commercial – nonagency	—		2,056		—		—		2,056
Total mortgage-backed securities	1		85,367		—		—		85,368
U.S. Treasury and government agencies	62,688		49		—		—		62,737
Obligations of U.S. states and municipalities	—		24,023		—		—		24,023
Non-U.S. government debt securities	13,397		8,643		—		—		22,040
Corporate debt securities	—		121		267		—		388
Asset-backed securities:
Collateralized loan obligations	—		5,437		—		—		5,437
Other(a)	—		3,269		—		—		3,269
Total available-for-sale securities	76,086		126,909		267		—		203,262
Loans(e)	—		34,981		3,808		—		38,789
Mortgage servicing rights	—		—		8,229		—		8,229
Other assets(d)	6,146		6,687		417		—		13,250
Total assets measured at fair value on a recurring basis	$	405,553	$	1,391,125	$	26,783	$	(544,491)	$	1,278,970
Deposits	$	—	$	49,515	$	2,053	$	—	$	51,568
Federal funds purchased and securities loaned or sold under repurchase agreements	—		216,604		—		—		216,604
Short-term borrowings	—		16,238		1,704		—		17,942
Trading liabilities:
Debt and equity instruments(c)	101,437		30,764		63		—		132,264
Derivative payables:
Interest rate	1,610		270,411		5,321		(262,185)		15,157
Credit	—		13,306		461		(13,201)		566
Foreign exchange	185		222,444		956		(209,408)		14,177
Equity	—		62,016		5,654		(57,865)		9,805
Commodity	—		18,650		635		(12,445)		6,840
Total derivative payables	1,795		586,827		13,027		(555,104)		46,545
Total trading liabilities	103,232		617,591		13,090		(555,104)		178,809
Accounts payable and other liabilities	3,486		1,547		68		—		5,101
Beneficial interests issued by consolidated VIEs	—		1		—		—		1
Long-term debt	—		53,184		25,425		—		78,609
Total liabilities measured at fair value on a recurring basis	$	106,718	$	954,680	$	42,340	$	(555,104)	$	548,634

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	Fair value hierarchy						Derivative netting adjustments(f)

December 31, 2022 (in millions)	Level 1		Level 2		Level 3				Total fair value
Federal funds sold and securities purchased under resale agreements	$	—	$	311,883	$	—	$	—	$	311,883
Securities borrowed	—		70,041		—		—		70,041
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies(a)	—		68,162		759		—		68,921
Residential – nonagency	—		2,498		5		—		2,503
Commercial – nonagency	—		1,448		7		—		1,455
Total mortgage-backed securities	—		72,108		771		—		72,879
U.S. Treasury, GSEs and government agencies(a)	61,191		8,546		—		—		69,737
Obligations of U.S. states and municipalities	—		6,608		7		—		6,615
Certificates of deposit, bankers’ acceptances and commercial paper	—		2,009		—		—		2,009
Non-U.S. government debt securities	18,213		48,429		155		—		66,797
Corporate debt securities	—		25,626		463		—		26,089
Loans	—		5,744		759		—		6,503
Asset-backed securities	—		2,536		23		—		2,559
Total debt instruments	79,404		171,606		2,178		—		253,188
Equity securities	82,483		2,060		665		—		85,208
Physical commodities(b)	9,595		16,673		2		—		26,270
Other	—		18,146		64		—		18,210
Total debt and equity instruments(c)	171,482		208,485		2,909		—		382,876
Derivative receivables:
Interest rate	3,390		292,956		4,069		(271,996)		28,419
Credit	—		9,722		607		(9,239)		1,090
Foreign exchange	169		240,207		1,203		(218,214)		23,365
Equity	—		57,485		4,428		(52,774)		9,139
Commodity	—		24,982		375		(16,490)		8,867
Total derivative receivables	3,559		625,352		10,682		(568,713)		70,880
Total trading assets(d)	175,041		833,837		13,591		(568,713)		453,756
Available-for-sale securities:
Mortgage-backed securities:
U.S. GSEs and government agencies(a)	3		71,500		—		—		71,503
Residential – nonagency	—		4,620		—		—		4,620
Commercial – nonagency	—		1,958		—		—		1,958
Total mortgage-backed securities	3		78,078		—		—		78,081
U.S. Treasury and government agencies	92,060		—		—		—		92,060
Obligations of U.S. states and municipalities	—		6,786		—		—		6,786
Non-U.S. government debt securities	10,591		9,105		—		—		19,696
Corporate debt securities	—		118		239		—		357
Asset-backed securities:
Collateralized loan obligations	—		5,792		—		—		5,792
Other	—		3,085		—		—		3,085
Total available-for-sale securities	102,654		102,964		239		—		205,857
Loans(e)	—		40,661		1,418		—		42,079
Mortgage servicing rights	—		—		7,973		—		7,973
Other assets(d)	7,544		6,065		405		—		14,014
Total assets measured at fair value on a recurring basis	$	285,239	$	1,365,451	$	23,626	$	(568,713)	$	1,105,603
Deposits	$	—	$	26,458	$	2,162	$	—	$	28,620
Federal funds purchased and securities loaned or sold under repurchase agreements	—		151,999		—		—		151,999
Short-term borrowings	—		14,391		1,401		—		15,792
Trading liabilities:
Debt and equity instruments(c)	98,719		28,032		84		—		126,835
Derivative payables:
Interest rate	2,643		284,280		3,368		(274,321)		15,970
Credit	—		9,377		594		(9,217)		754
Foreign exchange	160		250,647		714		(232,665)		18,856
Equity	—		57,649		4,812		(53,657)		8,804
Commodity	—		22,748		521		(16,512)		6,757
Total derivative payables	2,803		624,701		10,009		(586,372)		51,141
Total trading liabilities	101,522		652,733		10,093		(586,372)		177,976
Accounts payable and other liabilities	5,702		1,283		53		—		7,038
Beneficial interests issued by consolidated VIEs	—		5		—		—		5
Long-term debt	—		48,189		24,092		—		72,281
Total liabilities measured at fair value on a recurring basis	$	107,224	$	895,058	$	37,801	$	(586,372)	$	453,711

(a)At June 30, 2023, and December 31, 2022, included total U.S. GSE obligations of $93.5 billion and $73.8 billion, respectively, which were mortgage-related.

(b)Physical commodities inventories are generally accounted for at the lower of cost or net realizable value. “Net realizable value” is a term defined in U.S. GAAP as not exceeding fair value less costs to sell (“transaction costs”). Transaction costs for the Firm’s physical commodities inventories are either not applicable or immaterial to the value of the inventory. Therefore, net realizable value approximates fair value for the Firm’s physical commodities inventories. When fair value hedging has been applied (or when net realizable value is below cost), the carrying value of physical commodities approximates fair value, because under fair value hedge accounting, the cost basis is adjusted for changes in fair value. Refer to Note 5 for a further discussion of the Firm’s hedge accounting relationships. To provide consistent fair value disclosure information, all physical commodities inventories have been included in each period presented.

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(c)Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions).

(d)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy. At June 30, 2023, and December 31, 2022, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $956 million and $950 million, respectively. Included in these balances at June 30, 2023, and December 31, 2022, were trading assets of $40 million and $43 million, respectively, and other assets of $916 million and $907 million, respectively.

(e)At June 30, 2023, and December 31, 2022, included $9.3 billion and $9.7 billion, respectively, of residential first-lien mortgages, and $6.8 billion of commercial first-lien mortgages for both periods. Residential mortgage loans include conforming mortgage loans originated with the intent to sell to U.S. GSEs and government agencies of $3.3 billion and $2.4 billion, respectively.

(f)As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.

Level 3 valuations

Refer to Note 2 of JPMorgan Chase’s 2022 Form 10-K for further information on the Firm’s valuation process and a detailed discussion of the determination of fair value for individual financial instruments.

The following table presents the Firm’s primary level 3 financial instruments, the valuation techniques used to measure the fair value of those financial instruments, the significant unobservable inputs, the range of values for those inputs and the weighted or arithmetic averages of such inputs. While the determination to classify an instrument within level 3 is based on the significance of the unobservable inputs to the overall fair value measurement, level 3 financial instruments typically include observable components (that is, components that are actively quoted and can be validated to external sources) in addition to the unobservable components. The level 1 and/or level 2 inputs are not included in the table. In addition, the Firm manages the risk of the observable components of level 3 financial instruments using securities and derivative positions that are classified within levels 1 or 2 of the fair value hierarchy.

The range of values presented in the table is representative of the highest and lowest level input used to value the significant groups of instruments within a product/instrument classification. Where provided, the weighted averages of the input values presented in the table are calculated based on the fair value of the instruments that the input is being used to value.

In the Firm’s view, the input range, weighted and arithmetic average values do not reflect the degree of input uncertainty or an assessment of the reasonableness of the Firm’s estimates and assumptions. Rather, they reflect the characteristics of the various instruments held by the Firm and the relative distribution of instruments within the range of characteristics. For example, two option contracts may have similar levels of market risk exposure and valuation uncertainty, but may have significantly different implied volatility levels because the option contracts have different underlyings, tenors, or strike prices. The input range and weighted average values will therefore vary from period-to-period and parameter-to-parameter based on the characteristics of the instruments held by the Firm at each balance sheet date.

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Level 3 inputs(a)
June 30, 2023
Product/Instrument	Fair value (in millions)		Principal valuation technique	Unobservable inputs(g)	Range of input values		Average(i)
Residential mortgage-backed securities and loans(b)	$	1,641	Discounted cash flows	Yield	6%	40%		7%
				Prepayment speed	3%	11%		8%
				Conditional default rate	0%	5%		0%
				Loss severity	0%	110%		3%
Commercial mortgage-backed securities and loans(c)	2,318		Market comparables	Price	$0	$101		$84
Corporate debt securities	789		Market comparables	Price	$0	$242		$95
Loans(d)	1,671		Market comparables	Price	$0	$108		$78
Non-U.S. government debt securities	199		Market comparables	Price	$6	$106		$91
Net interest rate derivatives	(1,105)		Option pricing	Interest rate volatility	26 bps	674 bps		131 bps
				Interest rate spread volatility	37 bps	77 bps		64 bps
				Bermudan switch value	0%	58%		20%
				Interest rate correlation	(82)%	90%		15%
				IR-FX correlation	(35)%	60%		5%
	(17)		Discounted cash flows	Prepayment speed	0%	15%		5%
Net credit derivatives	673		Discounted cash flows	Credit correlation	35%	65%		48%
				Credit spread	0 bps	11,279 bps		342 bps
				Recovery rate	10%	90%		40%
	16		Market comparables	Price	$15	$115		$83
Net foreign exchange derivatives	461		Option pricing	IR-FX correlation	(40)%	60%		19%
	(72)		Discounted cash flows	Prepayment speed	11%			11%
				Interest rate curve	0%	30%		6%
Net equity derivatives	(1,881)		Option pricing	Forward equity price(h)	84%	142%		101%
				Equity volatility	3%	167%		32%
				Equity correlation	15%	100%		58%
				Equity-FX correlation	(86)%	60%		(29)%
				Equity-IR correlation	10%	35%		21%
Net commodity derivatives	(353)		Option pricing	Oil commodity forward	$95 / BBL	$249 / BBL		$172 / BBL
				Natural gas commodity forward	$1 / MMBTU	$7 / MMBTU		$4 / MMBTU
				Commodity volatility	5%	175%		90%
				Commodity correlation	(28)%	80%		26%
MSRs	8,229		Discounted cash flows	Refer to Note 15
Long-term debt, short-term borrowings, and deposits(e)	27,806		Option pricing	Interest rate volatility	26 bps	674 bps		131 bps
				Bermudan switch value	0%	58%		20%
				Interest rate correlation	(82)%	90%		15%
				IR-FX correlation	(35)%	60%		5%
				Equity correlation	15%	100%		58%
				Equity-FX correlation	(86)%	60%		(29)%
				Equity-IR correlation	10%	35%		21%
	1,376		Discounted cash flows	Credit correlation	35%	65%		48%
Other level 3 assets and liabilities, net(f)	1,056

(a)The categories presented in the table have been aggregated based upon the product type, which may differ from their classification on the Consolidated balance sheets. Furthermore, the inputs presented for each valuation technique in the table are, in some cases, not applicable to every instrument valued using the technique as the characteristics of the instruments can differ.

(b)Comprises U.S. GSE and government agency securities of $706 million, nonagency securities of $5 million and non-trading loans of $930 million.

(c)Comprises nonagency securities of $6 million, trading loans of $72 million and non-trading loans of $2.2 billion.

(d)Comprises trading loans of $1.0 billion and non-trading loans of $638 million.

(e)Long-term debt, short-term borrowings and deposits include structured notes issued by the Firm that are financial instruments that typically contain embedded derivatives. The estimation of the fair value of structured notes includes the derivative features embedded within the instrument. The significant unobservable inputs are broadly consistent with those presented for derivative receivables.

(f)Includes equity securities of $843 million including $213 million in Other assets, for which quoted prices are not readily available and the fair value is generally based on internal valuation techniques such as EBITDA multiples and comparable analysis. All other level 3 assets and liabilities are insignificant both individually and in aggregate.

(g)Price is a significant unobservable input for certain instruments. When quoted market prices are not readily available, reliance is generally placed on price-based internal valuation techniques. The price input is expressed assuming a par value of $100.

(h)Forward equity price is expressed as a percentage of the current equity price.

(i)Amounts represent weighted averages except for derivative related inputs where arithmetic averages are used.

107

Changes in and ranges of unobservable inputs

Refer to Note 2 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the impact on fair value of changes in unobservable inputs and the relationships between unobservable inputs as well as a description of attributes of the underlying instruments and external market factors that affect the range of inputs used in the valuation of the Firm’s positions.

Changes in level 3 recurring fair value measurements

The following tables include a rollforward of the Consolidated balance sheets amounts (including changes in fair value) for financial instruments classified by the Firm within level 3 of the fair value hierarchy for the three months ended June 30, 2023 and 2022. When a determination is made to classify a financial instrument within level 3, the determination is based on the significance of the unobservable inputs to the overall fair value measurement. However, level 3 financial instruments typically include, in addition to the unobservable or level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources); accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology. Also, the Firm risk-manages the observable components of level 3 financial instruments using securities and derivative positions that are classified within level 1 or 2 of the fair value hierarchy; as these level 1 and level 2 risk management instruments are not included below, the gains or losses in the following tables do not reflect the effect of the Firm’s risk management activities related to such level 3 instruments.

108


	Fair value measurements using significant unobservable inputs
Three months ended June 30, 2023 (in millions)	Fair value at April 1, 2023		Total realized/unrealized gains/(losses)											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2023			Change in unrealized gains/(losses) related to financial instruments held at June 30, 2023
						Purchases(g)		Sales				Settlements(h)
Assets:(a)
Federal funds sold and securities purchased under resale agreements	$	—	$	—		$	—	$	—			$	—	$	—	$	—		$	—	$	—
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies	757		—			106		(106)				(40)		—		(11)			706		(6)
Residential – nonagency	5		6			—		(6)				—		—		—			5		—
Commercial – nonagency	10		(1)			—		—				—		5		(8)			6		(1)
Total mortgage-backed securities	772		5			106		(112)				(40)		5		(19)			717		(7)
Obligations of U.S. states and municipalities	6		—			—		—				—		—		—			6		—
Non-U.S. government debt securities	169		29			50		(49)				—		—		—			199		31
Corporate debt securities	538		—			61		(43)				(2)		7		(39)			522		(2)
Loans	926		(6)			246		(65)				(18)		102		(80)			1,105		(6)
Asset-backed securities	7		—			4		(1)				—		4		—			14		—
Total debt instruments	2,418		28			467		(270)				(60)		118		(138)			2,563		16
Equity securities	581		(16)			50		(36)				—		104		(52)			631		(16)
Physical commodities	—		—			6		—				—		—		—			6		—
Other	140		(19)			2		—				(6)		—		(4)			113		(18)
Total trading assets – debt and equity instruments	3,139		(7)		(c)	525		(306)				(66)		222		(194)			3,313		(18)		(c)
Net derivative receivables:(b)
Interest rate	754		(1,043)			60		(42)				49		(914)		14			(1,122)		(960)
Credit	452		228			—		(1)				31		2		(23)			689		240
Foreign exchange	545		(37)			51		(67)				(126)		55		(32)			389		(29)
Equity	(885)		(148)			295		(675)				(726)		349		(91)			(1,881)		9
Commodity	(287)		(50)			35		(51)				16		(12)		(4)			(353)		(71)
Total net derivative receivables	579		(1,050)		(c)	441		(836)				(756)		(520)		(136)			(2,278)		(811)		(c)
Available-for-sale securities:
Corporate debt securities	250		17			—		—				—		—		—			267		17
Total available-for-sale securities	250		17		(d)	—		—				—		—		—			267		17		(d)
Loans	1,479		(3)		(c)	2,137		(7)				(490)		760		(68)			3,808		(52)		(c)
Mortgage servicing rights	7,755		275		(e)	546		(92)				(255)		—		—			8,229		275		(e)
Other assets	406		16		(c)	5		(2)				(14)		8		(2)			417		16		(c)

	Fair value measurements using significant unobservable inputs
Three months ended June 30, 2023 (in millions)	Fair value at April 1, 2023		Total realized/unrealized (gains)/losses											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2023			Change in unrealized (gains)/losses related to financial instruments held at June 30, 2023
						Purchases		Sales		Issuances		Settlements(h)
Liabilities:(a)
Deposits	$	2,208	$	(51)	(c)(f)	$	—	$	—	$	139	$	(181)	$	—	$	(62)		$	2,053	$	(51)	(c)(f)
Short-term borrowings	1,410		50		(c)(f)	—		—		1,191		(927)		2		(22)			1,704		29		(c)(f)
Trading liabilities – debt and equity instruments	63		(1)		(c)	—		(2)		—		(2)		6		(1)			63		(1)		(c)
Accounts payable and other liabilities	56		5		(c)	(2)		3		—		—		8		(2)			68		5		(c)
Long-term debt	25,227		325		(c)(f)	—		—		2,667		(2,550)		113		(357)			25,425		354		(c)(f)

109


	Fair value measurements using significant unobservable inputs
Three months ended June 30, 2022 (in millions)	Fair value at April 1, 2022		Total realized/unrealized gains/(losses)											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2022			Change in unrealized gains/(losses) related to financial instruments held at June 30, 2022
						Purchases(g)		Sales				Settlements(h)
Assets:(a)
Federal funds sold and securities purchased under resale agreements	$	—	$	—		$	—	$	—			$	—	$	1	$	—		$	1	$	—
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies	286		(1)			643		(118)				(7)		—		—			803		(2)
Residential – nonagency	10		—			5		—				(1)		—		—			14		—
Commercial – nonagency	10		—			—		—				—		—		—			10		—
Total mortgage-backed securities	306		(1)			648		(118)				(8)		—		—			827		(2)
Obligations of U.S. states and municipalities	7		—			—		—				—		—		—			7		—
Non-U.S. government debt securities	133		(9)			177		(86)				—		6		(16)			205		(8)
Corporate debt securities	293		(16)			272		(12)				—		57		(20)			574		(16)
Loans	1,049		(33)			122		(164)				(152)		254		(178)			898		(32)
Asset-backed securities	28		—			1		(10)				—		1		—			20		—
Total debt instruments	1,816		(59)			1,220		(390)				(160)		318		(214)			2,531		(58)
Equity securities	663		(99)			98		(61)				—		106		(46)			661		(90)
Physical commodities	—		—			2		—				—		—		—			2		—
Other	175		66			6		—				(158)		—		(2)			87		60
Total trading assets – debt and equity instruments	2,654		(92)		(c)	1,326		(451)				(318)		424		(262)			3,281		(88)		(c)
Net derivative receivables:(b)
Interest rate	367		160			99		(135)				105		44		(220)			420		204
Credit	44		264			4		(3)				(65)		1		4			249		255
Foreign exchange	76		193			15		(19)				(38)		24		(6)			245		174
Equity	(2,583)		1,838			162		(466)				(140)		(227)		182			(1,234)		1,788
Commodity	(414)		382			18		(69)				112		(1)		(2)			26		423
Total net derivative receivables	(2,510)		2,837		(c)	298		(692)				(26)		(159)		(42)			(294)		2,844		(c)
Available-for-sale securities:
Corporate debt securities	205		(19)			—		—				—		—		—			186		(19)
Total available-for-sale securities	205		(19)		(d)	—		—				—		—		—			186		(19)		(d)
Loans	2,072		(82)		(c)	273		(95)				(250)		226		(124)			2,020		(80)		(c)
Mortgage servicing rights	7,294		654		(e)	341		(614)				(236)		—		—			7,439		654		(e)
Other assets	341		116		(c)	5		(28)				(20)		—		(6)			408		116		(c)

	Fair value measurements using significant unobservable inputs
Three months ended June 30, 2022 (in millions)	Fair value at April 1, 2022		Total realized/unrealized (gains)/losses											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2022			Change in unrealized (gains)/losses related to financial instruments held at June 30, 2022
						Purchases		Sales		Issuances		Settlements(h)
Liabilities:(a)
Deposits	$	2,121	$	(160)	(c)(f)	$	—	$	—	$	138	$	(21)	$	—	$	(46)		$	2,032	$	(160)	(c)(f)
Short-term borrowings	2,146		14		(c)(f)	—		—		963		(1,036)		14		—			2,101		93		(c)(f)
Trading liabilities – debt and equity instruments	41		1		(c)	(20)		4		—		—		30		—			56		1		(c)
Accounts payable and other liabilities	108		(2)		(c)	(28)		1		—		—		—		(6)			73		(2)		(c)
Long-term debt	24,394		(2,640)		(c)(f)	—		—		3,470		(2,045)		179		(281)			23,077		(2,613)		(c)(f)

110


	Fair value measurements using significant unobservable inputs
Six months ended June 30, 2023 (in millions)	Fair value at Jan 1, 2023		Total realized/unrealized gains/(losses)											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2023			Change in unrealized gains/(losses) related to financial instruments held at June 30, 2023
						Purchases(g)		Sales				Settlements(h)
Assets:(a)
Federal funds sold and securities purchased under resale agreements	$	—	$	—		$	—	$	—			$	—	$	—	$	—		$	—	$	—
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies	759		7			131		(113)				(64)		—		(14)			706		2
Residential – nonagency	5		7			—		(6)				(2)		1		—			5		1
Commercial – nonagency	7		—			—		—				(1)		8		(8)			6		(1)
Total mortgage-backed securities	771		14			131		(119)				(67)		9		(22)			717		2
Obligations of U.S. states and municipalities	7		—			—		(1)				—		—		—			6		—
Non-U.S. government debt securities	155		40			100		(96)				—		—		—			199		43
Corporate debt securities	463		24			110		(60)				(2)		30		(43)			522		18
Loans	759		2			682		(127)				(113)		125		(223)			1,105		1
Asset-backed securities	23		—			5		(3)				(1)		5		(15)			14		(1)
Total debt instruments	2,178		80			1,028		(406)				(183)		169		(303)			2,563		63
Equity securities	665		(47)			108		(107)				—		140		(128)			631		(27)
Physical Commodities	2		—			6		—				(2)		—		—			6		—
Other	64		(40)			96		—				(4)		1		(4)			113		(19)
Total trading assets – debt and equity instruments	2,909		(7)		(c)	1,238		(513)				(189)		310		(435)			3,313		17		(c)
Net derivative receivables:(b)
Interest rate	701		(697)			95		(92)				27		(1,079)		(77)			(1,122)		(582)
Credit	13		474			3		(4)				202		26		(25)			689		497
Foreign exchange	489		52			79		(108)				(201)		119		(41)			389		29
Equity	(384)		23			613		(1,362)				(726)		460		(505)			(1,881)		95
Commodity	(146)		(42)			39		(118)				(111)		(11)		36			(353)		(206)
Total net derivative receivables	673		(190)		(c)	829		(1,684)				(809)		(485)		(612)			(2,278)		(167)		(c)
Available-for-sale securities:
Corporate debt securities	239		28			—		—				—		—		—			267		28
Total available-for-sale securities	239		28		(d)	—		—				—		—		—			267		28		(d)
Loans	1,418		23		(c)	2,285		(73)				(585)		917		(177)			3,808		24		(c)
Mortgage servicing rights	7,973		264		(e)	577		(90)				(495)		—		—			8,229		264		(e)
Other assets	405		21		(c)	17		(2)				(30)		8		(2)			417		21		(c)

	Fair value measurements using significant unobservable inputs
Six months ended June 30, 2023 (in millions)	Fair value at Jan 1, 2023		Total realized/unrealized (gains)/losses											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2023			Change in unrealized (gains)/losses related to financial instruments held at June 30, 2023
						Purchases		Sales		Issuances		Settlements(h)
Liabilities:(a)
Deposits	$	2,162	$	(3)	(c)(f)	$	—	$	—	$	267	$	(248)	$	—	$	(125)		$	2,053	$	(31)	(c)(f)
Short-term borrowings	1,401		140		(c)(f)	—		—		2,242		(2,059)		2		(22)			1,704		34		(c)(f)
Trading liabilities – debt and equity instruments	84		(13)		(c)	(27)		6		—		(2)		18		(3)			63		—
Accounts payable and other liabilities	53		4		(c)	(2)		7		—		—		8		(2)			68		4		(c)
Long-term debt	24,092		1,681		(c)(f)	—		—		5,400		(5,525)		204		(427)			25,425		1,674		(c)(f)

111


	Fair value measurements using significant unobservable inputs
Six months ended June 30, 2022 (in millions)	Fair value at Jan 1, 2022		Total realized/unrealized gains/(losses)											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2022			Change in unrealized gains/(losses) related to financial instruments held at June 30, 2022
						Purchases(g)		Sales				Settlements(h)
Assets:(a)
Federal funds sold and securities purchased under resale agreements	$	—	$	—		$	—	$	—			$	—	$	1	$	—		$	1	$	—
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies	265		26			665		(125)				(28)		—		—			803		24
Residential – nonagency	28		—			5		—				(12)		—		(7)			14		(1)
Commercial – nonagency	10		—			—		—				—		—		—			10		—
Total mortgage-backed securities	303		26			670		(125)				(40)		—		(7)			827		23
Obligations of U.S. states and municipalities	7		—			—		—				—		—		—			7		—
Non-U.S. government debt securities	81		(42)			405		(266)				—		43		(16)			205		(106)
Corporate debt securities	332		(35)			333		(71)				(37)		98		(46)			574		(44)
Loans	708		(37)			419		(262)				(159)		525		(296)			898		(13)
Asset-backed securities	26		—			2		(10)				—		5		(3)			20		—
Total debt instruments	1,457		(88)			1,829		(734)				(236)		671		(368)			2,531		(140)
Equity securities	662		(912)			321		(301)				—		959		(68)			661		(474)
Physical Commodities	—		—			2		—				—		—		—			2		—
Other	160		67			26		—				(163)		—		(3)			87		70
Total trading assets – debt and equity instruments	2,279		(933)		(c)	2,178		(1,035)				(399)		1,630		(439)			3,281		(544)		(c)
Net derivative receivables:(b)
Interest rate	(16)		393			225		(229)				256		17		(226)			420		428
Credit	74		331			8		(7)				(161)		(2)		6			249		330
Foreign exchange	(419)		538			147		(43)				32		18		(28)			245		486
Equity	(3,626)		2,568			660		(1,025)				303		(558)		444			(1,234)		2,975
Commodity	(907)		804			68		(206)				268		(1)		—			26		469
Total net derivative receivables	(4,894)		4,634		(c)	1,108		(1,510)				698		(526)		196			(294)		4,688		(c)
Available-for-sale securities:
Corporate debt securities	161		8			17		—				—		—		—			186		8
Total available-for-sale securities	161		8		(d)	17		—				—		—		—			186		8		(d)
Loans	1,933		16		(c)	394		(100)				(531)		616		(308)			2,020		(24)		(c)
Mortgage servicing rights	5,494		1,613		(e)	1,471		(671)				(468)		—		—			7,439		1,613		(e)
Other assets	306		125		(c)	46		(28)				(37)		2		(6)			408		119		(c)

	Fair value measurements using significant unobservable inputs
Six months ended June 30, 2022 (in millions)	Fair value at Jan 1, 2022		Total realized/unrealized (gains)/losses											Transfers into level 3		Transfers (out of) level 3		Fair value at June 30, 2022			Change in unrealized (gains)/losses related to financial instruments held at June 30, 2022
						Purchases		Sales		Issuances		Settlements(h)
Liabilities:(a)
Deposits	$	2,317	$	(302)	(c)(f)	$	—	$	—	$	246	$	(69)	$	—	$	(160)		$	2,032	$	(298)	(c)(f)
Short-term borrowings	2,481		(387)		(c)(f)	—		—		2,386		(2,383)		15		(11)			2,101		7		(c)(f)
Trading liabilities – debt and equity instruments	30		(16)		(c)	(34)		34		—		—		44		(2)			56		15		(c)
Accounts payable and other liabilities	69		(6)		(c)	(28)		43		—		—		1		(6)			73		(6)		(c)
Long-term debt	24,374		(4,308)		(c)(f)	—		—		7,520		(4,521)		442		(430)			23,077		(4,151)		(c)(f)

(a)Level 3 assets at fair value as a percentage of total Firm assets at fair value (including assets measured at fair value on a nonrecurring basis) were 2% at both June 30, 2023 and December 31, 2022. Level 3 liabilities at fair value as a percentage of total Firm liabilities at fair value (including liabilities measured at fair value on a nonrecurring basis) were 8% at both June 30, 2023 and December 31, 2022, respectively.

112

(b)All level 3 derivatives are presented on a net basis, irrespective of the underlying counterparty.

(c)Predominantly reported in principal transactions revenue, except for changes in fair value for CCB mortgage loans and lending-related commitments originated with the intent to sell, and mortgage loan purchase commitments, which are reported in mortgage fees and related income.

(d)Realized gains/(losses) on AFS securities are reported in investment securities gains/(losses). Unrealized gains/(losses) are reported in OCI. Realized and unrealized gains/(losses) recorded on level 3 AFS securities were not material both for the three and six months ended June 30, 2023 and 2022.

(e)Changes in fair value for MSRs are reported in mortgage fees and related income.

(f)Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue, and were not material for the three and six months ended June 30, 2023 and 2022. Unrealized (gains)/losses are reported in OCI, and were $23 million and $(344) million for the three months ended June 30, 2023 and 2022, respectively and $(277) million and $(574) million for the six months ended June 30, 2023 and 2022, respectively.

(g)Loan originations are included in purchases.

(h)Includes financial assets and liabilities that have matured, been partially or fully repaid, impacts of modifications, deconsolidations associated with beneficial interests in VIEs and other items.

Level 3 analysis

Consolidated balance sheets changes

The following describes significant changes to level 3 assets since December 31, 2022, for those items measured at fair value on a recurring basis. Refer to Assets and liabilities measured at fair value on a nonrecurring basis on page 115 for further information on changes impacting items measured at fair value on a nonrecurring basis.

Three and six months ended June 30, 2023

Level 3 assets were $26.8 billion at June 30, 2023, reflecting an increase of $3.0 billion from March 31, 2023, and an increase of $3.2 billion from December 31, 2022.

The increase for the three and six months ended June 30, 2023 was predominantly driven by:

•$2.3 billion and $2.4 billion, respectively, in non-trading loans primarily due to $1.9 billion of loans in CIB associated with the First Republic acquisition.

Refer to the sections below for additional information.

Transfers between levels for instruments carried at fair value on a recurring basis

For the three months ended June 30, 2023, significant transfers from level 2 into level 3 included the following:

•$1.2 billion of gross interest rate derivative payables as a result of transition to term SOFR for certain interest rate options.

•$760 million of non-trading loans driven by a decrease in observability.

For the three months ended June 30, 2023, there were no significant transfers from level 3 into level 2.

For the six months ended June 30, 2023, significant transfers from level 2 into level 3 included the following:

•$1.6 billion of gross interest rate derivative payables as a result of transition to term SOFR for certain interest rate options.

•$901 million of gross equity derivative receivables as a result of a decrease in observability and an increase in the significance of unobservable inputs.

•$917 million of non-trading loans driven by a decrease in observability.

For the six months ended June 30, 2023, significant transfers from level 3 into level 2 included the following:

•$1.3 billion and $827 million of gross equity derivative receivables and gross equity derivative payables, respectively, as a result of an increase in observability and a decrease in the significance of unobservable inputs.

For the three months ended June 30, 2022, there were no significant transfers from level 2 into level 3.

For the three months ended June 30, 2022, significant transfers from level 3 into level 2 included the following:

•$930 million of gross interest rate derivative receivables as a result of an increase in observability and a decrease in the significance of unobservable inputs.

For the six months ended June 30, 2022, significant transfers from level 2 into level 3 included the following:

•$1.6 billion of total debt and equity instruments, largely due to equity securities of $959 million driven by a decrease in observability predominantly as a result of restricted access to certain markets.

•$1.3 billion of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.

For the six months ended June 30, 2022, significant transfers from level 3 into level 2 included the following:

•$965 million of gross interest rate derivative receivables as a result of an increase in observability and a decrease in the significance of unobservable inputs.

•$920 million and $1.4 billion of gross equity derivative receivables and gross equity derivative payables, respectively, as a result of an increase in observability and a decrease in the significance of unobservable inputs.

All transfers are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.

113

Gains and losses

The following describes significant components of total realized/unrealized gains/(losses) for instruments measured at fair value on a recurring basis for the periods indicated. These amounts exclude any effects of the Firm’s risk management activities where the financial instruments are classified as level 1 and 2 of the fair value hierarchy. Refer to Changes in level 3 recurring fair value measurements rollforward tables on pages 108-113 for further information on these instruments.

Three months ended June 30, 2023

•$752 million of net losses on assets, driven by losses in net derivative receivables due to market movements.

•$328 million of net losses on liabilities, driven by losses in long-term debt due to market movements.

Three months ended June 30, 2022

•$3.4 billion of net gains on assets, largely driven by gains in net equity derivative receivables due to market movements and MSRs reflecting lower prepayment speeds on higher rates.

•$2.8 billion of net gains on liabilities, predominantly driven by gains in long-term debt due to market movements.

Six months ended June 30, 2023

•$139 million of net gains on assets, driven by gains in MSR reflecting lower prepayment speeds on higher rates.

•$1.8 billion of net losses on liabilities, predominantly driven by losses in long-term debt due to market movements.

Six months ended June 30, 2022

•$5.5 billion of net gains on assets, predominantly driven by gains in net equity derivative receivables due to market movements and MSRs reflecting lower prepayment speeds on higher rates.

•$5.0 billion of net gains on liabilities, predominantly driven by gains in long-term debt due to market movements.

Refer to Note 15 for information on MSRs.

Credit and funding adjustments — derivatives

The following table provides the impact of credit and funding adjustments on principal transactions revenue in the respective periods, excluding the effect of any associated hedging activities. The FVA presented below includes the impact of the Firm’s own credit quality on the inception value of liabilities as well as the impact of changes in the Firm’s own credit quality over time.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Credit and funding adjustments:
Derivatives CVA	$	66	$	147	$	121	$	(165)
Derivatives FVA	63		7		55		(51)

Refer to Note 2 of JPMorgan Chase’s 2022 Form 10-K for further information about both credit and funding

adjustments, as well as information about valuation adjustments on fair value option elected liabilities.

114

Assets and liabilities measured at fair value on a nonrecurring basis

The following tables present the assets and liabilities held as of June 30, 2023 and 2022, for which nonrecurring fair value adjustments were recorded during the six months ended June 30, 2023 and 2022, by major product category and fair value hierarchy.


	Fair value hierarchy							Total fair value
June 30, 2023 (in millions)	Level 1		Level 2		Level 3
Loans	$	—	$	803	$	840	(b)	$	1,643
Other assets(a)	—		7		286			293
Total assets measured at fair value on a nonrecurring basis	$	—	$	810	$	1,126		$	1,936
Accounts payable and other liabilities	—		—		—			—
Total liabilities measured at fair value on a nonrecurring basis	$	—	$	—	$	—		$	—


	Fair value hierarchy						Total fair value
June 30, 2022 (in millions)	Level 1		Level 2		Level 3
Loans	$	—	$	1,516	$	665	$	2,181
Other assets	—		22		1,083		1,105
Total assets measured at fair value on a nonrecurring basis	$	—	$	1,538	$	1,748	$	3,286
Accounts payable and other liabilities	—		—		293		293
Total liabilities measured at fair value on a nonrecurring basis	$	—	$	—	$	293	$	293

(a)Primarily includes equity securities without readily determinable fair values that were adjusted based on observable price changes in orderly transactions from an identical or similar investment of the same issuer (measurement alternative). Of the $286 million in level 3 assets measured at fair value on a nonrecurring basis as of June 30, 2023, $220 million related to equity securities adjusted based on the measurement alternative. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.

(b)Of the $840 million in level 3 assets measured at fair value on a nonrecurring basis as of June 30, 2023, $23 million related to residential real estate loans carried at the net realizable value of the underlying collateral (e.g., collateral-dependent loans). These amounts are classified as level 3 as they are valued using information from broker’s price opinions, appraisals and automated valuation models and discounted based upon the Firm’s experience with actual liquidation values. These discounts ranged from 3% to 56% with a weighted average of 25%.

Nonrecurring fair value changes

The following table presents the total change in value of assets and liabilities for which fair value adjustments have been recognized for the three and six months ended June 30, 2023 and 2022, related to assets and liabilities held at those dates.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Loans	$	(96)	$	(80)	$	(128)	$	(91)
Other assets(a)	(36)		(389)		(99)		(45)
Accounts payable and other liabilities	—		(269)		—		(288)
Total nonrecurring fair value gains/(losses)	$	(132)	$	(738)	$	(227)	$	(424)

(a)Included $(32) million and $(387) million for the three months ended June 30, 2023 and 2022, respectively, and $(93) million and $(29) million for the six months ended June 30, 2023 and 2022, respectively, of net gains/(losses) as a result of the measurement alternative.

Refer to Note 12 for further information about the measurement of collateral-dependent loans.

115

Equity securities without readily determinable fair values

The Firm measures certain equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer (i.e., measurement alternative), with such changes recognized in other income.

In its determination of the new carrying values upon observable price changes, the Firm may adjust the prices if deemed necessary to arrive at the Firm’s estimated fair values. Such adjustments may include adjustments to reflect the different rights and obligations of similar securities, and other adjustments that are consistent with the Firm’s valuation techniques for private equity direct investments.

The following table presents the carrying value of equity securities without readily determinable fair values held as of June 30, 2023 and 2022, that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable.


	Three months ended June 30,				Six months ended June 30,
As of or for the period ended, (in millions)	2023		2022		2023		2022
Other assets
Carrying value(a)	$	4,673	$	4,196	$	4,673	$	4,196
Upward carrying value changes(b)	5		76		40		445
Downward carrying value changes/impairment(c)	(37)		(463)		(133)		(474)

(a)The carrying value as of December 31, 2022 was $4.1 billion. The period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes.

(b)The cumulative upward carrying value changes between January 1, 2018 and June 30, 2023 were $1.5 billion.

(c)The cumulative downward carrying value changes/impairment between January 1, 2018 and June 30, 2023 were $(1.0) billion.

Included in other assets above is the Firm’s interest in approximately 37 million Visa Class B common shares (“Visa B shares”). These shares are subject to certain transfer restrictions and are convertible into Visa Class A common shares (“Visa A shares”) at a specified conversion rate upon final resolution of certain litigation matters involving Visa. On June 29, 2023, Visa filed a Current Report on Form 8-K with the SEC indicating that the conversion rate of Visa B shares to Visa A shares decreased from 1.5991 to 1.5902 effective June 28, 2023. The conversion rate may be further adjusted by Visa depending on developments related to the litigation matters. The outcome of those litigation matters, and the effect that the resolution of those matters may have on the conversion rate, is unknown. Accordingly, as of June 30, 2023, there is significant uncertainty regarding when the transfer restrictions on Visa B shares may be terminated and what the final conversion rate for the Visa B shares will be. As a result of these considerations, as well as differences in voting rights, Visa B shares are not considered to be similar to Visa A shares, and they continue to be held at their nominal carrying value.

In connection with prior sales of Visa B shares, the Firm has entered into derivative instruments with the purchasers of the shares under which the Firm retains the risk associated with changes in the conversion rate. Under the terms of the derivative instruments, the Firm will (a) make or receive payments based on subsequent changes in the conversion rate and (b) make periodic interest payments to the purchasers of the Visa B shares. The payments under the derivative instruments will continue as long as the Visa B shares remain subject to transfer restrictions. The derivative instruments are accounted for at fair value using a discounted cash flow methodology based upon the Firm’s estimate of the timing and magnitude of final resolution of the litigation matters. The derivative instruments are recorded in trading liabilities, and changes in fair value are recognized in other income. As of June 30, 2023, the Firm held derivative instruments associated with 23 million Visa B shares that the Firm had previously sold, which are all subject to similar terms and conditions.

116

Additional disclosures about the fair value of financial instruments that are not carried on the Consolidated balance sheets at fair value

The following table presents, by fair value hierarchy classification, the carrying values and estimated fair values at June 30, 2023, and December 31, 2022, of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and their classification within the fair value hierarchy.


	June 30, 2023										December 31, 2022
			Estimated fair value hierarchy										Estimated fair value hierarchy
(in billions)	Carrying value		Level 1		Level 2		Level 3		Total estimated fair value		Carrying value		Level 1		Level 2		Level 3		Total estimated fair value
Financial assets
Cash and due from banks	$	26.1	$	26.1	$	—	$	—	$	26.1	$	27.7	$	27.7	$	—	$	—	$	27.7
Deposits with banks	469.1		469.0		0.1		—		469.1		539.5		539.3		0.2		—		539.5
Accrued interest and accounts receivable	111.1		—		111.1		0.1		111.2		124.7		—		124.6		0.1		124.7
Federal funds sold and securities purchased under resale agreements	3.0		—		3.0		—		3.0		3.7		—		3.7		—		3.7
Securities borrowed	107.7		—		107.7		—		107.7		115.3		—		115.3		—		115.3
Investment securities, held-to-maturity	408.9		185.8		189.5		—		375.3		425.3		189.1		199.5		—		388.6
Loans, net of allowance for loan losses(a)	1,239.3		—		279.8		936.1		1,215.9		1,073.9		—		194.0		853.9		1,047.9
Other	69.2		—		66.9		2.4		69.3		101.2		—		99.6		1.7		101.3
Financial liabilities
Deposits	$	2,347.4	$	—	$	2,347.5	$	—	$	2,347.5	$	2,311.6	$	—	$	2,311.5	$	—	$	2,311.5
Federal funds purchased and securities loaned or sold under repurchase agreements	49.7		—		49.7		—		49.7		50.6		—		50.6		—		50.6
Short-term borrowings(b)	23.1		—		23.1		—		23.1		28.2		—		28.2		—		28.2
Accounts payable and other liabilities	248.1		—		238.8		8.8		247.6		257.5		—		251.2		5.6		256.8
Beneficial interests issued by consolidated VIEs	19.6		—		19.6		—		19.6		12.6		—		12.6		—		12.6
Long-term debt(b)	285.4		—		232.0		51.7		283.7		223.6		—		216.5		2.8		219.3

(a)Fair value is typically estimated using a discounted cash flow model that incorporates the characteristics of the underlying loans (including principal, contractual interest rate and contractual fees) and other key inputs, including expected lifetime credit losses, interest rates, prepayment rates, and primary origination or secondary market spreads. For certain loans, the fair value is measured based on the value of the underlying collateral. Carrying value of the loan takes into account the loan’s allowance for loan losses, which represents the loan’s expected credit losses over its remaining expected life. The difference between the estimated fair value and carrying value of a loan is generally attributable to changes in market interest rates, including credit spreads, market liquidity premiums and other factors that affect the fair value of a loan but do not affect its carrying value.

(b)Includes FHLB advances in level 2 of Long-term debt and Short-term borrowings and the Purchase Money Note in level 3 of Long-term debt associated with the First Republic acquisition. Refer to Notes 18 and 28 for additional information.

The majority of the Firm’s lending-related commitments are not carried at fair value on a recurring basis on the Consolidated balance sheets. The carrying value and the estimated fair value of these wholesale lending-related commitments were as follows for the periods indicated.


	June 30, 2023										December 31, 2022
			Estimated fair value hierarchy										Estimated fair value hierarchy
(in billions)	Carrying value(a) (b)(c)		Level 1		Level 2		Level 3		Total estimated fair value		Carrying value(a) (b)		Level 1		Level 2		Level 3		Total estimated fair value
Wholesale lending-related commitments	$	3.7	$	—	$	—	$	4.9	$	4.9	$	2.3	$	—	$	—	$	3.2	$	3.2

(a)Excludes the current carrying values of the guarantee liability and the offsetting asset, each of which is recognized at fair value at the inception of the guarantees.

(b)Includes the wholesale allowance for lending-related commitments.

(c)As of June 30, 2023, includes fair value adjustments associated with the First Republic acquisition for other unfunded commitments to extend credit totaling $1.6 billion. Refer to Notes 24 and 28 for additional information.

The Firm does not estimate the fair value of consumer off-balance sheet lending-related commitments. In many cases, the Firm can reduce or cancel these commitments by providing the borrower notice or, in some cases as permitted by law, without notice. Refer to page 169 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of the valuation of lending-related commitments.

117

Note 3 – Fair value option

The fair value option provides an option to elect fair value for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments.

The Firm has elected to measure certain instruments at fair value for several reasons including to mitigate income statement volatility caused by the differences between the measurement basis of elected instruments (e.g., certain instruments that otherwise would be accounted for on an accrual basis) and the associated risk management arrangements that are accounted for on a fair value basis, as well as to better reflect those instruments that are managed on a fair value basis.

The Firm’s election of fair value includes the following instruments:

•Loans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis, including lending-related commitments

•Certain securities financing agreements

•Owned beneficial interests in securitized financial assets that contain embedded credit derivatives, which would otherwise be required to be separately accounted for as a derivative instrument

•Structured notes and other hybrid instruments, which are predominantly financial instruments that contain embedded derivatives, that are issued or transacted as part of client-driven activities

•Certain long-term beneficial interests issued by CIB’s consolidated securitization trusts where the underlying assets are carried at fair value

Changes in fair value under the fair value option election

The following table presents the changes in fair value included in the Consolidated statements of income for the three and six months ended June 30, 2023 and 2022, for items for which the fair value option was elected. The profit and loss information presented below only includes the financial instruments that were elected to be measured at fair value; related risk management instruments, which are required to be measured at fair value, are not included in the table.


	Three months ended June 30,
	2023							2022
(in millions)	Principal transactions		All other income			Total changes in fair value recorded (e)		Principal transactions			All other income			Total changes in fair value recorded (e)
Federal funds sold and securities purchased under resale agreements	$	18	$	—		$	18	$	(145)		$	—		$	(145)
Securities borrowed	(60)		—			(60)		(101)			—			(101)
Trading assets:
Debt and equity instruments, excluding loans	1,160		—			1,160		(1,255)			—			(1,255)
Loans reported as trading assets:
Changes in instrument-specific credit risk	100		—			100		(136)		(f)	—			(136)
Other changes in fair value	2		2		(c)	4		(11)			—			(11)
Loans:
Changes in instrument-specific credit risk	6		(5)		(c)	1		(83)			11		(c)	(72)
Other changes in fair value	(76)		(6)		(c)	(82)		(501)			(260)		(c)	(761)
Other assets	(16)		(1)		(d)	(17)		(2)			4		(d)	2
Deposits(a)	(395)		—			(395)		382			—			382
Federal funds purchased and securities loaned or sold under repurchase agreements	(8)		—			(8)		124			—			124
Short-term borrowings(a)	(110)		—			(110)		471			—			471
Trading liabilities	(15)		—			(15)		54			—			54
Beneficial interests issued by consolidated VIEs	—		—			—		—			—			—
Other liabilities	(1)		—			(1)		(7)			—			(7)
Long-term debt(a)(b)	(663)		(2)		(c)(d)	(665)		5,405			14		(c)(d)	5,419

118


	Six months ended June 30,
	2023							2022
(in millions)	Principal transactions		All other income			Total changes in fair value recorded (e)		Principal transactions			All other income			Total changes in fair value recorded (e)
Federal funds sold and securities purchased under resale agreements	$	220	$	—		$	220	$	(375)		$	—		$	(375)
Securities borrowed	28		—			28		(299)			—			(299)
Trading assets:
Debt and equity instruments, excluding loans	2,755		—			2,755		(911)			—			(911)
Loans reported as trading assets:
Changes in instrument-specific credit risk	231		—			231		(142)		(f)	—			(142)
Other changes in fair value	5		2		(c)	7		(22)			—			(22)
Loans:
Changes in instrument-specific credit risk	71		(4)		(c)	67		(77)			23		(c)	(54)
Other changes in fair value	119		104		(c)	223		(1,220)			(774)		(c)	(1,994)
Other assets	14		(1)		(d)	13		9			1		(d)	10
Deposits(a)	(868)		—			(868)		784			—			784
Federal funds purchased and securities loaned or sold under repurchase agreements	(69)		—			(69)		206			—			206
Short-term borrowings(a)	(269)		—			(269)		773			—			773
Trading liabilities	(30)		—			(30)		(12)			—			(12)
Beneficial interests issued by consolidated VIEs	—		—			—		(1)			—			(1)
Other liabilities	(1)		—			(1)		(4)			—			(4)
Long-term debt(a)(b)	(3,461)		(28)		(c)(d)	(3,489)		9,365			33		(c)(d)	9,398

(a)Unrealized gains/(losses) due to instrument-specific credit risk (DVA) for liabilities for which the fair value option has been elected are recorded in OCI, while realized gains/(losses) are recorded in principal transactions revenue. Realized gains/(losses) due to instrument-specific credit risk recorded in principal transactions revenue were not material both for the three and six months ended June 30, 2023 and 2022.

(b)Long-term debt measured at fair value predominantly relates to structured notes. Although the risk associated with the structured notes is actively managed, the gains/(losses) reported in this table do not include the income statement impact of the risk management instruments used to manage such risk.

(c)Reported in mortgage fees and related income.

(d)Reported in other income.

(e)Changes in fair value exclude contractual interest, which is included in interest income and interest expense for all instruments other than certain hybrid financial instruments in CIB. Refer to Note 7 for further information regarding interest income and interest expense.

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

119

Difference between aggregate fair value and aggregate remaining contractual principal balance outstanding

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of June 30, 2023, and December 31, 2022, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.


	June 30, 2023							December 31, 2022
(in millions)	Contractual principal outstanding			Fair value		Fair value over/(under) contractual principal outstanding		Contractual principal outstanding			Fair value		Fair value over/(under) contractual principal outstanding
Loans
Nonaccrual loans
Loans reported as trading assets	$	2,737		$	529	$	(2,208)	$	2,517		$	368	$	(2,149)
Loans	911			760		(151)		967			829		(138)
Subtotal	3,648			1,289		(2,359)		3,484			1,197		(2,287)
90 or more days past due and government guaranteed
Loans(a)	82			76		(6)		124			115		(9)
All other performing loans(b)
Loans reported as trading assets	9,217			7,560		(1,657)		7,823			6,135		(1,688)
Loans	39,995			37,953		(2,042)		42,588			41,135		(1,453)
Subtotal	49,212			45,513		(3,699)		50,411			47,270		(3,141)
Total loans	$	52,942		$	46,878	$	(6,064)	$	54,019		$	48,582	$	(5,437)
Long-term debt
Principal-protected debt	$	42,889	(d)	$	34,524	$	(8,365)	$	41,341	(d)	$	31,105	$	(10,236)
Nonprincipal-protected debt(c)	NA			44,085		NA		NA			41,176		NA
Total long-term debt	NA			$	78,609	NA		NA			$	72,281	NA
Long-term beneficial interests
Nonprincipal-protected debt(c)	NA			$	1	NA		NA			$	5	NA
Total long-term beneficial interests	NA			$	1	NA		NA			$	5	NA

(a)These balances are excluded from nonaccrual loans as the loans are insured and/or guaranteed by U.S. government agencies.

(b)There were no performing loans that were ninety days or more past due as of June 30, 2023, and December 31, 2022.

(c)Remaining contractual principal is not applicable to nonprincipal-protected structured notes and long-term beneficial interests. Unlike principal-protected structured notes and long-term beneficial interests, for which the Firm is obligated to return a stated amount of principal at maturity, nonprincipal-protected structured notes and long-term beneficial interests do not obligate the Firm to return a stated amount of principal at maturity, but for structured notes to return an amount based on the performance of an underlying variable or derivative feature embedded in the note. However, investors are exposed to the credit risk of the Firm as issuer for both nonprincipal-protected and principal-protected notes.

(d)Where the Firm issues principal-protected zero-coupon or discount notes, the balance reflects the contractual principal payment at maturity or, if applicable, the contractual principal payment at the Firm’s next call date.

At June 30, 2023, and December 31, 2022, the contractual amount of lending-related commitments for which the fair value option was elected was $10.2 billion and $7.6 billion, respectively, with a corresponding fair value of $264 million and $24 million, respectively. Refer to Note 28 of JPMorgan Chase’s 2022 Form 10-K, and Note 24 of this Form 10-Q for further information regarding off-balance sheet lending-related financial instruments.

120

Structured note products by balance sheet classification and risk component

The following table presents the fair value of structured notes, by balance sheet classification and the primary risk type.


	June 30, 2023									December 31, 2022
(in millions)	Long-term debt		Short-term borrowings		Deposits			Total		Long-term debt		Short-term borrowings		Deposits			Total
Risk exposure
Interest rate	$	34,860	$	225	$	46,527		$	81,612	$	31,973	$	260	$	24,655		$	56,888
Credit	4,618		247		—			4,865		4,105		170		—			4,275
Foreign exchange	2,675		997		3			3,675		2,674		788		50			3,512
Equity	33,590		4,830		3,202			41,622		30,864		4,272		3,545			38,681
Commodity	2,017		—		1		(a)	2,018		1,655		16		2		(a)	1,673
Total structured notes	$	77,760	$	6,299	$	49,733		$	133,792	$	71,271	$	5,506	$	28,252		$	105,029

(a)Excludes deposits linked to precious metals for which the fair value option has not been elected of $590 million and $602 million for the periods ended June 30, 2023 and December 31, 2022, respectively.

121

Note 4 – Credit risk concentrations

Concentrations of credit risk arise when a number of clients, counterparties or customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions.

JPMorgan Chase regularly monitors various segments of its credit portfolios to assess potential credit risk concentrations and to obtain additional collateral when deemed necessary and permitted under the Firm’s agreements. Senior management is significantly involved in the credit approval and review process, and risk levels are adjusted as needed to reflect the Firm’s risk appetite.

In the Firm’s consumer portfolio, concentrations are managed primarily by product and by U.S. geographic region, with a key focus on trends and concentrations at the portfolio level, where potential credit risk concentrations can be remedied through changes in underwriting policies and portfolio guidelines. Refer to Note 12 for additional information on the geographic composition of the Firm’s consumer loan portfolios. In the wholesale portfolio, credit risk concentrations are evaluated primarily by industry and monitored regularly on both an aggregate portfolio level and on an individual client or counterparty basis.

The Firm’s wholesale exposure is managed through loan syndications and participations, loan sales, securitizations, credit derivatives, master netting agreements, collateral and other risk-reduction techniques. Refer to Note 12 for additional information on loans.

The Firm does not believe that its exposure to any particular loan product or industry segment results in a significant concentration of credit risk.

Terms of loan products and collateral coverage are included in the Firm’s assessment when extending credit and establishing its allowance for loan losses.

122

The table below presents both on–balance sheet and off–balance sheet consumer and wholesale credit exposure by the Firm’s three credit portfolio segments as of June 30, 2023 and December 31, 2022. The wholesale industry of risk category is generally based on the client or counterparty’s primary business activity.


	June 30, 2023								December 31, 2022
	Credit exposure(h)(i)		On-balance sheet				Off-balance sheet(j)		Credit exposure(h)		On-balance sheet				Off-balance sheet(j)
(in millions)			Loans		Derivatives						Loans		Derivatives
Consumer, excluding credit card	$	459,050	$	408,204	$	—	$	50,846	$	344,893	$	311,375	$	—	$	33,518
Credit card(a)	1,072,833		191,348		—		881,485		1,006,459		185,175		—		821,284
Total consumer(a)	1,531,883		599,552		—		932,331		1,351,352		496,550		—		854,802
Wholesale(b)
Real Estate	206,912		165,069		331		41,512		170,857		131,681		249		38,927
Individuals and Individual Entities(c)	141,178		122,056		730		18,392		130,815		120,424		434		9,957
Asset Managers	138,143		52,730		14,751		70,662		95,656		40,511		16,397		38,748
Consumer & Retail	125,935		47,410		2,278		76,247		120,555		45,867		1,650		73,038
Industrials	77,206		27,537		1,424		48,245		72,483		26,960		1,770		43,753
Technology, Media & Telecommunications	76,444		21,159		2,601		52,684		72,286		21,622		2,950		47,714
Healthcare	65,547		22,727		1,720		41,100		62,613		22,970		1,683		37,960
Banks & Finance Cos	61,659		34,934		4,679		22,046		51,816		32,172		3,246		16,398
State & Municipal Govt(d)	37,157		20,656		457		16,044		33,847		18,147		585		15,115
Utilities	35,757		7,162		3,089		25,506		36,218		9,107		3,269		23,842
Oil & Gas	33,233		9,607		1,352		22,274		38,668		9,632		5,121		23,915
Automotive	32,947		15,169		602		17,176		33,287		14,735		529		18,023
Chemicals & Plastics	22,195		6,343		510		15,342		20,030		5,771		407		13,852
Insurance	21,874		2,772		8,175		10,927		21,045		2,387		8,081		10,577
Central Govt	16,845		3,670		10,827		2,348		19,095		3,167		12,955		2,973
Metals & Mining	15,631		4,786		311		10,534		15,915		5,398		475		10,042
Transportation	15,447		5,779		606		9,062		15,009		5,005		567		9,437
Securities Firms	9,077		957		3,392		4,728		8,066		556		3,387		4,123
Financial Markets Infrastructure	4,993		184		2,491		2,318		4,962		13		3,050		1,899
All other(e)	135,271		97,438		3,891		33,942		123,307		87,545		4,075		31,687
Subtotal	1,273,451		668,145		64,217		541,089		1,146,530		603,670		70,880		471,980
Loans held-for-sale and loans at fair value	32,372		32,372		—		—		35,427		35,427		—		—
Receivables from customers(f)	42,741		—		—		—		49,257		—		—		—
Total wholesale	1,348,564		700,517		64,217		541,089		1,231,214		639,097		70,880		471,980
Total exposure(g)(h)	$	2,880,447	$	1,300,069	$	64,217	$	1,473,420	$	2,582,566	$	1,135,647	$	70,880	$	1,326,782

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

(b)The industry rankings presented in the table as of December 31, 2022, are based on the industry rankings of the corresponding exposures as of June 30, 2023, not actual rankings of such exposures at December 31, 2022.

(c)Individuals and Individual Entities predominantly consists of Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB, and includes exposure to personal investment companies and personal and testamentary trusts.

(d)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) as of June 30, 2023 and December 31, 2022, noted above, the Firm held: $6.8 billion and $6.6 billion, respectively, of trading assets; $24.0 billion and $6.8 billion, respectively, of AFS securities; and $11.6 billion and $19.7 billion, respectively, of HTM securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 10 for further information.

(e)All other includes: SPEs and Private education and civic organizations, representing approximately 94% and 6%, respectively, as of June 30, 2023 and 95% and 5%, respectively, as of December 31, 2022. Refer to Note 14 for more information on exposures to SPEs.

(f)Receivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g., cash on deposit, liquid and readily marketable debt or equity securities). Because of this collateralization, no allowance for credit losses is generally held against these receivables. To manage its credit risk the Firm establishes margin requirements and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.

(g)Excludes cash placed with banks of $485.4 billion and $556.6 billion, as of June 30, 2023 and December 31, 2022, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.

(h)Credit exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.

(i)Included credit exposure associated with the First Republic acquisition consisting of $104.6 billion in the Consumer, excluding credit card portfolio, and $98.2 billion in the Wholesale portfolio predominantly in Asset Managers, Real Estate, and Individuals and Individual Entities.

(j)Represents lending-related financial instruments.

123

Note 5 – Derivative instruments

JPMorgan Chase makes markets in derivatives for clients and also uses derivatives to hedge or manage its own risk exposures. Refer to Note 5 of JPMorgan Chase’s 2022 Form 10-K for a further discussion of the Firm’s use of and accounting policies regarding derivative instruments.

The Firm’s disclosures are based on the accounting treatment and purpose of these derivatives. A limited number of the Firm’s derivatives are designated in hedge

accounting relationships and are disclosed according to the type of hedge (fair value hedge, cash flow hedge, or net investment hedge). Derivatives not designated in hedge accounting relationships include certain derivatives that are used to manage risks associated with specified assets and liabilities (“specified risk management” positions) as well as derivatives used in the Firm’s market-making businesses or for other purposes.

The following table outlines the Firm’s primary uses of derivatives and the related hedge accounting designation or disclosure category.

Type of Derivative

Use of Derivative

Designation and disclosure

Affected
segment or unit

10-Q page reference

Manage specifically identified risk exposures in qualifying hedge accounting relationships:

•Interest rate

Hedge fixed rate assets and liabilities

Fair value hedge

Corporate

130-131

•Interest rate

Hedge floating-rate assets and liabilities

Cash flow hedge

Corporate

132

•Foreign exchange

Hedge foreign currency-denominated assets and liabilities

Fair value hedge

Corporate

130-131

•Foreign exchange

Hedge foreign currency-denominated forecasted revenue and expense

Cash flow hedge

Corporate

132

•Foreign exchange

Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entities

Net investment hedge

Corporate

133

•Commodity

Hedge commodity inventory

Fair value hedge

CIB, AWM

130-131

Manage specifically identified risk exposures not designated in qualifying hedge accounting relationships:

•Interest rate

Manage the risk associated with mortgage commitments, warehouse loans and MSRs

Specified risk management

CCB

134

•Credit

Manage the credit risk associated with wholesale lending exposures

Specified risk management

CIB

134

•Interest rate and foreign exchange

Manage the risk associated with certain other specified assets and liabilities

Specified risk management

Corporate

134

Market-making derivatives and other activities:

•Various

Market-making and related risk management

Market-making and other

CIB

134

•Various

Other derivatives

Market-making and other

CIB, AWM, Corporate

134

124

Notional amount of derivative contracts

The following table summarizes the notional amount of free-standing derivative contracts outstanding as of June 30, 2023, and December 31, 2022.


	Notional amounts(b)
(in billions)	June 30, 2023		December 31, 2022
Interest rate contracts
Swaps	$	29,292	$	24,491
Futures and forwards	3,341		2,636
Written options	3,329		3,047
Purchased options	3,390		2,992
Total interest rate contracts	39,352		33,166
Credit derivatives(a)	1,477		1,132
Foreign exchange contracts
Cross-currency swaps	4,436		4,196
Spot, futures and forwards	8,681		7,017
Written options	867		775
Purchased options	826		759
Total foreign exchange contracts	14,810		12,747
Equity contracts
Swaps	598		618
Futures and forwards	110		110
Written options	755		636
Purchased options	707		580
Total equity contracts	2,170		1,944
Commodity contracts
Swaps	137		136
Spot, futures and forwards	142		136
Written options	133		117
Purchased options	110		98
Total commodity contracts	522		487
Total derivative notional amounts	$	58,331	$	49,476

(a)Refer to the Credit derivatives discussion on page 135 for more information on volumes and types of credit derivative contracts.

(b)Represents the sum of gross long and gross short third-party notional derivative contracts.

While the notional amounts disclosed above give an indication of the volume of the Firm’s derivatives activity, the notional amounts significantly exceed, in the Firm’s view, the possible losses that could arise from such transactions. For most derivative contracts, the notional amount is not exchanged; it is simply a reference amount used to calculate payments.

125

Impact of derivatives on the Consolidated balance sheets

The following table summarizes information on derivative receivables and payables (before and after netting adjustments) that are reflected on the Firm’s Consolidated balance sheets as of June 30, 2023, and December 31, 2022, by accounting designation (e.g., whether the derivatives were designated in qualifying hedge accounting relationships or not) and contract type.


Free-standing derivative receivables and payables(a)
	Gross derivative receivables								Gross derivative payables
June 30, 2023 (in millions)	Not designated as hedges		Designated as hedges		Total derivative receivables		Net derivative receivables(b)		Not designated as hedges		Designated as hedges		Total derivative payables		Net derivative payables(b)
Trading assets and liabilities
Interest rate	$	288,312	$	—	$	288,312	$	27,709	$	277,334	$	8	$	277,342	$	15,157
Credit	13,685		—		13,685		1,245		13,767		—		13,767		566
Foreign exchange	226,793		886		227,679		22,194		222,739		846		223,585		14,177
Equity	61,392		—		61,392		7,324		67,670		—		67,670		9,805
Commodity	16,872		768		17,640		5,745		18,465		820		19,285		6,840
Total fair value of trading assets and liabilities	$	607,054	$	1,654	$	608,708	$	64,217	$	599,975	$	1,674	$	601,649	$	46,545

	Gross derivative receivables								Gross derivative payables
December 31, 2022 (in millions)	Not designated as hedges		Designated as hedges		Total derivative receivables		Net derivative receivables(b)		Not designated as hedges		Designated as hedges		Total derivative payables		Net derivative payables(b)
Trading assets and liabilities
Interest rate	$	300,411	$	4	$	300,415	$	28,419	$	290,291	$	—	$	290,291	$	15,970
Credit	10,329		—		10,329		1,090		9,971		—		9,971		754
Foreign exchange	239,946		1,633		241,579		23,365		248,911		2,610		251,521		18,856
Equity	61,913		—		61,913		9,139		62,461		—		62,461		8,804
Commodity	23,652		1,705		25,357		8,867		20,758		2,511		23,269		6,757
Total fair value of trading assets and liabilities	$	636,251	$	3,342	$	639,593	$	70,880	$	632,392	$	5,121	$	637,513	$	51,141

(a)Balances exclude structured notes for which the fair value option has been elected. Refer to Note 3 for further information.

(b)As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral receivables and payables when a legally enforceable master netting agreement exists.

126

Derivatives netting

The following tables present, as of June 30, 2023, and December 31, 2022, gross and net derivative receivables and payables by contract and settlement type. Derivative receivables and payables, as well as the related cash collateral from the same counterparty, have been netted on the Consolidated balance sheets where the Firm has obtained an appropriate legal opinion with respect to the master netting agreement. Where such a legal opinion has not been either sought or obtained, amounts are not eligible for netting on the Consolidated balance sheets, and those derivative receivables and payables are shown separately in the tables below.

In addition to the cash collateral received and transferred that is presented on a net basis with derivative receivables and payables, the Firm receives and transfers additional collateral (financial instruments and cash). These amounts mitigate counterparty credit risk associated with the Firm’s derivative instruments, but are not eligible for net presentation:

•collateral that consists of liquid securities and other cash collateral held at third-party custodians, which are shown separately as “Collateral not nettable on the Consolidated balance sheets” in the tables below, up to the fair value exposure amount. For the purpose of this disclosure, the definition of liquid securities is consistent with the definition of high quality liquid assets as defined in the LCR rule;

•the amount of collateral held or transferred that exceeds the fair value exposure at the individual counterparty level, as of the date presented, which is excluded from the tables below; and

•collateral held or transferred that relates to derivative receivables or payables where an appropriate legal opinion has not been either sought or obtained with respect to the master netting agreement, which is excluded from the tables below.


	June 30, 2023							December 31, 2022
(in millions)	Gross derivative receivables		Amounts netted on the Consolidated balance sheets		Net derivative receivables			Gross derivative receivables		Amounts netted on the Consolidated balance sheets		Net derivative receivables
U.S. GAAP nettable derivative receivables
Interest rate contracts:
Over-the-counter (“OTC”)	$	194,218	$	(168,569)	$	25,649		$	203,922	$	(178,261)	$	25,661
OTC–cleared	91,665		(91,508)		157			93,800		(93,424)		376
Exchange-traded(a)	573		(526)		47			559		(311)		248
Total interest rate contracts	286,456		(260,603)		25,853			298,281		(271,996)		26,285
Credit contracts:
OTC	8,850		(7,818)		1,032			8,474		(7,535)		939
OTC–cleared	4,674		(4,622)		52			1,746		(1,704)		42
Total credit contracts	13,524		(12,440)		1,084			10,220		(9,239)		981
Foreign exchange contracts:
OTC	223,998		(204,582)		19,416			237,941		(216,796)		21,145
OTC–cleared	910		(901)		9			1,461		(1,417)		44
Exchange-traded(a)	11		(2)		9			15		(1)		14
Total foreign exchange contracts	224,919		(205,485)		19,434			239,417		(218,214)		21,203
Equity contracts:
OTC	24,672		(21,496)		3,176			30,323		(25,665)		4,658
Exchange-traded(a)	34,196		(32,572)		1,624			28,467		(27,109)		1,358
Total equity contracts	58,868		(54,068)		4,800			58,790		(52,774)		6,016
Commodity contracts:
OTC	9,317		(5,539)		3,778			14,430		(7,633)		6,797
OTC–cleared	111		(111)		—			120		(112)		8
Exchange-traded(a)	6,266		(6,245)		21			9,103		(8,745)		358
Total commodity contracts	15,694		(11,895)		3,799			23,653		(16,490)		7,163
Derivative receivables with appropriate legal opinion	599,461		(544,491)		54,970		(d)	630,361		(568,713)		61,648		(d)
Derivative receivables where an appropriate legal opinion has not been either sought or obtained	9,247				9,247			9,232				9,232
Total derivative receivables recognized on the Consolidated balance sheets	$	608,708			$	64,217		$	639,593			$	70,880
Collateral not nettable on the Consolidated balance sheets(b)(c)					(23,282)							(23,014)
Net amounts					$	40,935						$	47,866

127


	June 30, 2023							December 31, 2022
(in millions)	Gross derivative payables		Amounts netted on the Consolidated balance sheets		Net derivative payables			Gross derivative payables		Amounts netted on the Consolidated balance sheets		Net derivative payables
U.S. GAAP nettable derivative payables
Interest rate contracts:
OTC	$	180,016	$	(167,127)	$	12,889		$	190,108	$	(176,890)	$	13,218
OTC–cleared	94,771		(94,554)		217			97,417		(97,126)		291
Exchange-traded(a)	512		(504)		8			327		(305)		22
Total interest rate contracts	275,299		(262,185)		13,114			287,852		(274,321)		13,531
Credit contracts:
OTC	9,240		(8,768)		472			8,054		(7,572)		482
OTC–cleared	4,438		(4,433)		5			1,674		(1,645)		29
Total credit contracts	13,678		(13,201)		477			9,728		(9,217)		511
Foreign exchange contracts:
OTC	220,326		(208,507)		11,819			246,457		(231,248)		15,209
OTC–cleared	993		(901)		92			1,488		(1,417)		71
Exchange-traded(a)	15		—		15			20		—		20
Total foreign exchange contracts	221,334		(209,408)		11,926			247,965		(232,665)		15,300
Equity contracts:
OTC	28,206		(25,293)		2,913			29,833		(26,554)		3,279
Exchange-traded(a)	35,657		(32,572)		3,085			28,291		(27,103)		1,188
Total equity contracts	63,863		(57,865)		5,998			58,124		(53,657)		4,467
Commodity contracts:
OTC	9,591		(6,061)		3,530			11,954		(7,642)		4,312
OTC–cleared	116		(116)		—			112		(112)		—
Exchange-traded(a)	7,050		(6,268)		782			9,021		(8,758)		263
Total commodity contracts	16,757		(12,445)		4,312			21,087		(16,512)		4,575
Derivative payables with appropriate legal opinion	590,931		(555,104)		35,827		(d)	624,756		(586,372)		38,384		(d)
Derivative payables where an appropriate legal opinion has not been either sought or obtained	10,718				10,718			12,757				12,757
Total derivative payables recognized on the Consolidated balance sheets	$	601,649			$	46,545		$	637,513			$	51,141
Collateral not nettable on the Consolidated balance sheets(b)(c)					(4,248)							(3,318)
Net amounts					$	42,297						$	47,823

(a)Exchange-traded derivative balances that relate to futures contracts are settled daily.

(b)Includes liquid securities and other cash collateral held at third-party custodians related to derivative instruments where an appropriate legal opinion has been obtained. For some counterparties, the collateral amounts of financial instruments may exceed the derivative receivables and derivative payables balances. Where this is the case, the total amount reported is limited to the net derivative receivables and net derivative payables balances with that counterparty.

(c)Derivative collateral relates only to OTC and OTC-cleared derivative instruments.

(d)Net derivatives receivable included cash collateral netted of $52.5 billion and $51.5 billion at June 30, 2023, and December 31, 2022, respectively. Net derivatives payable included cash collateral netted of $63.2 billion and $69.2 billion at June 30, 2023, and December 31, 2022, respectively. Derivative cash collateral relates to OTC and OTC-cleared derivative instruments.

128

Liquidity risk and credit-related contingent features

Refer to Note 5 of JPMorgan Chase’s 2022 Form 10-K for a more detailed discussion of liquidity risk and credit-related contingent features related to the Firm’s derivative contracts.

The following table shows the aggregate fair value of net derivative payables related to OTC and OTC-cleared derivatives that contain contingent collateral or termination features that may be triggered upon a ratings downgrade, and the associated collateral the Firm has posted in the normal course of business, at June 30, 2023, and December 31, 2022.


OTC and OTC-cleared derivative payables containing downgrade triggers
(in millions)	June 30, 2023			December 31, 2022
Aggregate fair value of net derivative payables		$	15,243		$	16,023
Collateral posted		14,144			15,505

The following table shows the impact of a single-notch and two-notch downgrade of the long-term issuer ratings of JPMorgan Chase & Co. and its subsidiaries, predominantly JPMorgan Chase Bank, N.A., at June 30, 2023, and December 31, 2022, related to OTC and OTC-cleared derivative contracts with contingent collateral or termination features that may be triggered upon a ratings downgrade. Derivatives contracts generally require additional collateral to be posted or terminations to be triggered when the predefined rating threshold is breached. A downgrade by a single rating agency that does not result in a rating lower than a preexisting corresponding rating provided by another major rating agency will generally not result in additional collateral (except in certain instances in which additional initial margin may be required upon a ratings downgrade), nor in termination payment requirements. The liquidity impact in the table is calculated based upon a downgrade below the lowest current rating of the rating agencies referred to in the derivative contract.


Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives
	June 30, 2023				December 31, 2022
(in millions)	Single-notch downgrade		Two-notch downgrade		Single-notch downgrade		Two-notch downgrade
Amount of additional collateral to be posted upon downgrade(a)	$	81	$	1,241	$	128	$	1,293
Amount required to settle contracts with termination triggers upon downgrade(b)	80		811		88		925

(a)Includes the additional collateral to be posted for initial margin.

(b)Amounts represent fair values of derivative payables, and do not reflect collateral posted.

Derivatives executed in contemplation of a sale of the underlying financial asset

In certain instances the Firm enters into transactions in which it transfers financial assets but maintains the economic exposure to the transferred assets by entering into a derivative with the same counterparty in contemplation of the initial transfer. The Firm generally accounts for such transfers as collateralized financing transactions as described in Note 11, but in limited circumstances they may qualify to be accounted for as a sale and a derivative under U.S. GAAP. The amount of such transfers accounted for as a sale where the associated derivative was outstanding was not material at both June 30, 2023 and December 31, 2022.

129

Impact of derivatives on the Consolidated statements of income

The following tables provide information related to gains and losses recorded on derivatives based on their hedge accounting designation or purpose.

Fair value hedge gains and losses

The following tables present derivative instruments, by contract type, used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for the three and six months ended June 30, 2023 and 2022, respectively. The Firm includes gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the related hedged item.


	Gains/(losses) recorded in income						Income statement impact of excluded components(e)				OCI impact
Three months ended June 30, 2023 (in millions)	Derivatives		Hedged items		Income statement impact		Amortization approach		Changes in fair value		Derivatives - Gains/(losses) recorded in OCI(f)
Contract type
Interest rate(a)(b)	$	(151)	$	164	$	13	$	—	$	5	$	—
Foreign exchange(c)	254		(188)		66		(156)		66		15
Commodity(d)	422		(290)		132		—		133		—
Total	$	525	$	(314)	$	211	$	(156)	$	204	$	15


	Gains/(losses) recorded in income						Income statement impact of excluded components(e)				OCI impact
Three months ended June 30, 2022 (in millions)	Derivatives		Hedged items		Income statement impact		Amortization approach		Changes in fair value		Derivatives - Gains/(losses) recorded in OCI(f)
Contract type
Interest rate(a)(b)	$	(4,467)	$	4,367	$	(100)	$	—	$	(79)	$	—
Foreign exchange(c)	(818)		830		12		(115)		12		67
Commodity(d)	(1,536)		1,464		(72)		—		(73)		—
Total	$	(6,821)	$	6,661	$	(160)	$	(115)	$	(140)	$	67


	Gains/(losses) recorded in income						Income statement impact of excluded components(e)				OCI impact
Six months ended June 30, 2023 (in millions)	Derivatives		Hedged items		Income statement impact		Amortization approach		Changes in fair value		Derivatives - Gains/(losses) recorded in OCI(f)
Contract type
Interest rate(a)(b)	$	1,021	$	(940)	$	81	$	—	$	15	$	—
Foreign exchange(c)	412		(282)		130		(329)		130		(13)
Commodity(d)	(1,118)		1,335		217		—		217		—
Total	$	315	$	113	$	428	$	(329)	$	362	$	(13)


	Gains/(losses) recorded in income						Income statement impact of excluded components(e)				OCI impact
Six months ended June 30, 2022 (in millions)	Derivatives		Hedged items		Income statement impact		Amortization approach		Changes in fair value		Derivatives - Gains/(losses) recorded in OCI(f)
Contract type
Interest rate(a)(b)	$	(11,537)	$	11,348	$	(189)	$	—	$	(145)	$	—
Foreign exchange(c)	(1,508)		1,518		10		(180)		10		212
Commodity(d)	(1,712)		1,611		(101)		—		(110)		—
Total	$	(14,757)	$	14,477	$	(280)	$	(180)	$	(245)	$	212

(a)Primarily consists of hedges of the benchmark (e.g., Secured Overnight Financing Rate (“SOFR”)) interest rate risk of fixed-rate long-term debt and AFS securities. Gains and losses were recorded in net interest income.

(b)Includes the amortization of income/expense associated with the inception hedge accounting adjustment applied to the hedged item. Excludes the accrual of interest on interest rate swaps and the related hedged items.

(c)Primarily consists of hedges of the foreign currency risk of long-term debt and AFS securities for changes in spot foreign currency rates. Gains and losses related to the derivatives and the hedged items due to changes in foreign currency rates and the income statement impact of excluded components were recorded primarily in principal transactions revenue and net interest income.

(d)Consists of overall fair value hedges of physical commodities inventories that are generally carried at the lower of cost or net realizable value (net realizable value approximates fair value). Gains and losses were recorded in principal transactions revenue.

(e)The assessment of hedge effectiveness excludes certain components of the changes in fair values of the derivatives and hedged items such as forward points on foreign exchange forward contracts, time values and cross-currency basis spreads. Excluded components may impact earnings either through amortization of the initial amount over the life of the derivative, or through fair value changes recognized in the current period.

(f)Represents the change in value of amounts excluded from the assessment of effectiveness under the amortization approach, predominantly cross-currency basis spreads. The amount excluded at inception of the hedge is recognized in earnings over the life of the derivative.

130

As of June 30, 2023 and December 31, 2022, the following amounts were recorded on the Consolidated balance sheets related to certain cumulative fair value hedge basis adjustments that are expected to reverse through the income statement in future periods as an adjustment to yield.


	Carrying amount of the hedged items(a)(b)			Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:
June 30, 2023 (in millions)				Active hedging relationships(d)		Discontinued hedging relationships(d)(e)		Total
Assets
Investment securities - AFS	$	136,444	(c)	$	(2,752)	$	(3,462)	$	(6,214)
Liabilities
Long-term debt	176,509			(5,857)		(9,105)		(14,962)

	Carrying amount of the hedged items(b)(c)			Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:
December 31, 2022 (in millions)				Active hedging relationships(d)		Discontinued hedging relationships(d)(e)		Total
Assets
Investment securities - AFS	$	84,073	(c)	$	(4,149)	$	(1,542)	$	(5,691)
Liabilities
Long-term debt	175,257			(11,879)		(3,313)		(15,192)

(a)Excludes physical commodities with a carrying value of $12.8 billion and $26.0 billion at June 30, 2023 and December 31, 2022, respectively, to which the Firm applies fair value hedge accounting. As a result of the application of hedge accounting, these inventories are carried at fair value, thus recognizing unrealized gains and losses in current periods. Since the Firm exits these positions at fair value, there is no incremental impact to net income in future periods.

(b)Excludes hedged items where only foreign currency risk is the designated hedged risk, as basis adjustments related to foreign currency hedges will not reverse through the income statement in future periods. At June 30, 2023 and December 31, 2022, the carrying amount excluded for AFS securities is $20.9 billion and $20.3 billion, respectively, and for long-term debt is $216 million and $221 million, respectively.

(c)Carrying amount represents the amortized cost, net of allowance if applicable. Effective January 1, 2023, the Firm adopted the new portfolio layer method hedge accounting guidance which expanded the ability to hedge a portfolio of prepayable assets to allow more of the portfolio to be hedged. At June 30, 2023, the amortized cost of the portfolio layer method closed portfolios was $67.8 billion, of which $49.6 billion was designated as hedged. The cumulative amount of basis adjustments was $(1.1) billion, reflecting $(865) million and $(229) million for active and discontinued hedging relationships, respectively. Refer to Note 1 and Note 10 for additional information.

(d)Positive (negative) amounts related to assets represent cumulative fair value hedge basis adjustments that will reduce (increase) net interest income in future periods. Positive (negative) amounts related to liabilities represent cumulative fair value hedge basis adjustments that will increase (reduce) net interest income in future periods.

(e)Represents basis adjustments existing on the balance sheet date associated with hedged items that have been de-designated from qualifying fair value hedging relationships.

131

Cash flow hedge gains and losses

The following tables present derivative instruments, by contract type, used in cash flow hedge accounting relationships, and the pre-tax gains/(losses) recorded on such derivatives, for the three and six months ended June 30, 2023 and 2022, respectively. The Firm includes the gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the change in cash flows on the related hedged item.


	Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended June 30, 2023 (in millions)	Amounts reclassified from AOCI to income		Amounts recorded in OCI		Total change in OCI for period
Contract type
Interest rate(a)	$	(474)	$	(1,199)	$	(725)
Foreign exchange(b)	9		80		71
Total	$	(465)	$	(1,119)	$	(654)

	Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended June 30, 2022 (in millions)	Amounts reclassified from AOCI to income		Amounts recorded in OCI		Total change in OCI for period
Contract type
Interest rate(a)	$	86	$	(1,509)	$	(1,595)
Foreign exchange(b)	(62)		(241)		(179)
Total	$	24	$	(1,750)	$	(1,774)

	Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Six months ended June 30, 2023 (in millions)	Amounts reclassified from AOCI to income		Amounts recorded in OCI		Total change in OCI for period
Contract type
Interest rate(a)	$	(902)	$	(738)	$	164
Foreign exchange(b)	(46)		186		232
Total	$	(948)	$	(552)	$	396

	Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Six months ended June 30, 2022 (in millions)	Amounts reclassified from AOCI to income		Amounts recorded in OCI		Total change in OCI for period
Contract type
Interest rate(a)	$	329	$	(4,870)	$	(5,199)
Foreign exchange(b)	(68)		(316)		(248)
Total	$	261	$	(5,186)	$	(5,447)

(a)Primarily consists of hedges of SOFR-indexed floating-rate assets. Gains and losses were recorded in net interest income.

(b)Primarily consists of hedges of the foreign currency risk of non-U.S. dollar-denominated revenue and expense. The income statement classification of gains and losses follows the hedged item – primarily noninterest revenue and compensation expense.

The Firm did not experience any forecasted transactions that failed to occur for the three and six months ended June 30, 2023 and 2022.

Over the next 12 months, the Firm expects that approximately $(1.3) billion (after-tax) of net losses recorded in AOCI at June 30, 2023, related to cash flow hedges will be recognized in income. For cash flow hedges that have been terminated, the maximum length of time over which the derivative results recorded in AOCI will be recognized in earnings is approximately seven years, corresponding to the timing of the originally hedged forecasted cash flows. For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately seven years. The Firm’s longer-dated forecasted transactions relate to core lending and borrowing activities.

132

Net investment hedge gains and losses

The following table presents hedging instruments, by contract type, that were used in net investment hedge accounting relationships, and the pre-tax gains/(losses) recorded on such instruments for the three and six months ended June 30, 2023 and 2022.


	Gains/(losses) recorded in income and other comprehensive income/(loss)
	2023					2022
Three months ended June 30, (in millions)	Amounts recorded in income(a)(b)			Amounts recorded in OCI		Amounts recorded in income(a)(b)			Amounts recorded in OCI
Foreign exchange derivatives		$	121	$	(88)		$	(116)	$	3,520

	Gains/(losses) recorded in income and other comprehensive income/(loss)
	2023					2022
Six months ended June 30, (in millions)	Amounts recorded in income(a)(b)			Amounts recorded in OCI		Amounts recorded in income(a)(b)			Amounts recorded in OCI
Foreign exchange derivatives		$	205	$	(1,092)		$	(247)	$	3,858

(a)Certain components of hedging derivatives are permitted to be excluded from the assessment of hedge effectiveness, such as forward points on foreign exchange forward contracts. The Firm elects to record changes in fair value of these amounts directly in other income.

(b)Excludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. Excludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. During the six months ended June 30, 2023, the Firm reclassified a pre-tax loss of $41 million to other revenue related to the acquisition of CIFM. The amounts reclassified for the three months ended June 30, 2023 and three and six months ended June 30, 2022 were not material. Refer to Note 21 for further information.

133

Gains and losses on derivatives used for specified risk management purposes

The following table presents pre-tax gains/(losses) recorded on a limited number of derivatives, not designated in hedge accounting relationships, that are used to manage risks associated with certain specified assets and liabilities, including certain risks arising from mortgage commitments, warehouse loans, MSRs, wholesale lending exposures, and foreign currency-denominated assets and liabilities.


	Derivatives gains/(losses) recorded in income
	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Contract type
Interest rate(a)	$	(112)	$	(309)	$	(126)	$	(538)
Credit(b)	(67)		89		(163)		122
Foreign exchange(c)	41		6		43		(76)
Total	$	(138)	$	(214)	$	(246)	$	(492)

(a)Primarily represents interest rate derivatives used to hedge the interest rate risk inherent in mortgage commitments, warehouse loans and MSRs, as well as written commitments to originate warehouse loans. Gains and losses were recorded predominantly in mortgage fees and related income.

(b)Relates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm’s wholesale businesses. These derivatives do not include credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, which is included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue.

(c)Primarily relates to derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and losses were recorded in principal transactions revenue.

Gains and losses on derivatives related to market-making activities and other derivatives

The Firm makes markets in derivatives in order to meet the needs of customers and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. All derivatives not included in the hedge accounting or specified risk management categories above are included in this category. Gains and losses on these derivatives are primarily recorded in principal transactions revenue. Refer to Note 6 for information on principal transactions revenue.

134

Credit derivatives

Refer to Note 5 of JPMorgan Chase’s 2022 Form 10-K for a more detailed discussion of credit derivatives. The following tables present a summary of the notional amounts of credit derivatives and credit-related notes the Firm sold and purchased as of June 30, 2023 and December 31, 2022. The Firm does not use notional amounts of credit derivatives as the primary measure of risk management for such derivatives, because the notional amount does not take into account the probability of the occurrence of a credit event, the recovery value of the reference obligation, or related cash instruments and economic hedges, each of which reduces, in the Firm’s view, the risks associated with such derivatives.

Total credit derivatives and credit-related notes


	Maximum payout/Notional amount
June 30, 2023 (in millions)	Protection sold		Protection purchased with identical underlyings(c)			Net protection (sold)/purchased(d)		Other protection purchased(e)
Credit derivatives
Credit default swaps	$	(649,720)		$	677,813	$	28,093	$	5,774
Other credit derivatives(a)	(55,887)			73,831		17,944		13,765
Total credit derivatives	(705,607)			751,644		46,037		19,539
Credit-related notes(b)	—			—		—		8,064
Total	$	(705,607)		$	751,644	$	46,037	$	27,603

	Maximum payout/Notional amount
December 31, 2022 (in millions)	Protection sold		Protection purchased with identical underlyings(c)			Net protection (sold)/purchased(d)		Other protection purchased(e)
Credit derivatives
Credit default swaps	$	(495,557)		$	509,846	$	14,289	$	2,917
Other credit derivatives(a)	(47,165)			65,029		17,864		11,746
Total credit derivatives	(542,722)			574,875		32,153		14,663
Credit-related notes(b)	—			—		—		7,863
Total	$	(542,722)		$	574,875	$	32,153	$	22,526

(a)Other credit derivatives predominantly consist of credit swap options and total return swaps.

(b)Represents Other protection purchased by CIB, primarily in its market-making businesses.

(c)Represents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold.

(d)Does not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value.

(e)Represents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument.

The following tables summarize the notional amounts by the ratings, maturity profile, and total fair value, of credit derivatives as of June 30, 2023, and December 31, 2022, where JPMorgan Chase is the seller of protection. The maturity profile is based on the remaining contractual maturity of the credit derivative contracts. The ratings profile is based on the rating of the reference entity on which the credit derivative contract is based. The ratings and maturity profile of credit derivatives where JPMorgan Chase is the purchaser of protection are comparable to the profile reflected below.


Protection sold — credit derivatives ratings(a)/maturity profile
June 30, 2023 (in millions)	<1 year		1–5 years		>5 years		Total notional amount		Fair value of receivables(b)		Fair value of payables(b)		Net fair value
Risk rating of reference entity
Investment-grade	$	(103,323)	$	(412,661)	$	(37,836)	$	(553,820)	$	4,357	$	(1,281)	$	3,076
Noninvestment-grade	(38,784)		(106,800)		(6,203)		(151,787)		2,575		(3,606)		(1,031)
Total	$	(142,107)	$	(519,461)	$	(44,039)	$	(705,607)	$	6,932	$	(4,887)	$	2,045


December 31, 2022 (in millions)	<1 year		1–5 years		>5 years		Total notional amount		Fair value of receivables(b)		Fair value of payables(b)		Net fair value
Risk rating of reference entity
Investment-grade	$	(90,484)	$	(294,791)	$	(30,822)	$	(416,097)	$	2,324	$	(1,495)	$	829
Noninvestment-grade	(33,244)		(87,011)		(6,370)		(126,625)		1,267		(3,209)		(1,942)
Total	$	(123,728)	$	(381,802)	$	(37,192)	$	(542,722)	$	3,591	$	(4,704)	$	(1,113)

(a)The ratings scale is primarily based on external credit ratings defined by S&P and Moody’s.

(b)Amounts are shown on a gross basis, before the benefit of legally enforceable master netting agreements including cash collateral netting.

135

Note 6 – Noninterest revenue and noninterest expense

Noninterest revenue

Refer to Note 6 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the components of and accounting policies for the Firm’s noninterest revenue.

Investment banking fees

The following table presents the components of investment banking fees.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Underwriting
Equity	$	317	$	230	$	550	$	472
Debt	704		711		1,376		1,685
Total underwriting	1,021		941		1,926		2,157
Advisory	492		645		1,236		1,437
Total investment banking fees	$	1,513	$	1,586	$	3,162	$	3,594

Principal transactions

The following table presents all realized and unrealized gains and losses recorded in principal transactions revenue. This table excludes interest income and interest expense on trading assets and liabilities, which are an integral part of the overall performance of the Firm’s client-driven market-making activities in CIB and fund deployment activities in Treasury and CIO. Refer to Note 7 for further information on interest income and interest expense.

Trading revenue is presented primarily by instrument type. The Firm’s client-driven market-making businesses generally utilize a variety of instrument types in connection with their market-making and related risk-management activities; accordingly, the trading revenue presented in the table below is not representative of the total revenue of any individual LOB.


	Three months ended June 30,					Six months ended June 30,
(in millions)	2023		2022			2023		2022
Trading revenue by instrument type
Interest rate(a)	$	1,781	$	376		$	3,567	$	845
Credit(b)	419		279		(c)	1,053		736		(c)
Foreign exchange	1,435		1,425			2,986		2,749
Equity	2,941		2,303			5,634		4,558
Commodity	368		499			1,294		1,246
Total trading revenue	6,944		4,882			14,534		10,134
Private equity gains/(losses)	(34)		108			(9)		(39)
Principal transactions	$	6,910	$	4,990		$	14,525	$	10,095

(a)Includes the impact of changes in funding valuation adjustments on derivatives.

(b)Includes the impact of changes in credit valuation adjustments on derivatives, net of the associated hedging activities.

(c)Includes markdowns on held-for-sale positions, primarily unfunded commitments, in the bridge financing portfolio.

Lending- and deposit-related fees

The following table presents the components of lending- and deposit-related fees.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Lending-related fees(a)	$	590	$	362	$	959	$	724
Deposit-related fees	1,238		1,511		2,489		2,988
Total lending- and deposit-related fees	$	1,828	$	1,873	$	3,448	$	3,712

(a) Includes the impact of the First Republic acquisition. Refer to Note 28 for additional information.

Deposit-related fees include the impact of credits earned by clients that reduce such fees.

Asset management fees

The following table presents the components of asset management fees.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Asset management fees
Investment management fees(a)(b)	$	3,695	$	3,425	$	7,085	$	6,987
All other asset management fees(c)	79		92		154		182
Total asset management fees	$	3,774	$	3,517	$	7,239	$	7,169

(a)Represents fees earned from managing assets on behalf of the Firm’s clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts.

(b)Includes the impact of the First Republic acquisition. Refer to Note 28 for additional information.

(c)Represents fees for services that are ancillary to investment management services, such as commissions earned on the sales or distribution of mutual funds to clients.

Commissions and other fees

The following table presents the components of commissions and other fees.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Commissions and other fees
Brokerage commissions(a)	$	722	$	738	$	1,469	$	1,548
Administration fees(b)	575		590		1,132		1,223
All other commissions and fees (c)	442		395		833		662
Total commissions and other fees	$	1,739	$	1,723	$	3,434	$	3,433

(a)Represents commissions earned when the Firm acts as a broker, by facilitating its clients’ purchases and sales of securities and other financial instruments.

(b)Predominantly includes fees for custody, securities lending, funds services and securities clearance.

(c)Includes travel-related and annuity sales commissions, depositary receipt-related service fees, as well as other service fees, which are recognized as revenue when the services are rendered.

136

Card income

The following table presents the components of card income.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Interchange and merchant processing income	$	7,885	$	7,214	$	15,024	$	13,449
Rewards costs and partner payments	(6,392)		(5,641)		(11,901)		(10,511)
Other card income(a)	(399)		(440)		(795)		(830)
Total card income	$	1,094	$	1,133	$	2,328	$	2,108

(a)Predominantly represents the amortization of account origination costs and annual fees.

Refer to Note 15 for further information on mortgage fees and related income.

Other income

This revenue category includes operating lease income, as well as losses associated with the Firm’s tax-oriented investments, predominantly alternative energy equity-method investments in CIB.

The following table presents certain components of other income:


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Operating lease income	$	716	$	945	$	1,471	$	1,993
Losses on tax-oriented investments(a)	(462)		(427)		(874)		(835)
Estimated bargain purchase gain associated with the First Republic acquisition(b)	2,712		—		2,712		—
Gain related to the acquisition of CIFM(c)	—		—		339

(a) The losses associated with these tax-oriented investments are more than offset by lower income tax expense from the associated tax credits.

(b) Refer to Note 28 for additional information on the First Republic acquisition.

Refer to Note 17 for information on operating lease income included within other income.

Noninterest expense

Other expense

Other expense on the Firm’s Consolidated statements of income includes the following:


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022			2023		2022
Legal expense	$	420	$	73		$	596	$	192


FDIC-related expense	338		216			655		414
First Republic-related expense(a)	599		—			599		—

(a) Refer to Note 28 for additional information on the First Republic acquisition.

FDIC Special Assessment

In May 2023, the FDIC issued a notice of proposed rulemaking recommending a special assessment related to the systemic risk determination made on March 12, 2023, to recover losses to the Deposit Insurance Fund ("DIF") arising from the protection of uninsured depositors resulting from recent bank resolutions. In its current form, the rule would impose a special assessment at an annual rate of 12.5 basis points on certain banks’ estimated uninsured deposits reported as of December 31, 2022. The Firm expects to be subject to special assessments imposed by the FDIC to recover losses to the DIF.

137

Note 7 – Interest income and Interest expense

Refer to Note 7 of JPMorgan Chase’s 2022 Form 10-K for a description of JPMorgan Chase’s accounting policies regarding interest income and interest expense.

The following table presents the components of interest income and interest expense.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Interest income
Loans(a)	$	20,306	$	11,626	$	38,014	$	22,259
Taxable securities	4,194		2,289		8,161		4,268
Non-taxable securities(b)	343		245		591		490
Total investment securities(a)	4,537		2,534		8,752		4,758
Trading assets - debt instruments	4,013		2,049		7,659		3,816
Federal funds sold and securities purchased under resale agreements	3,767		543		6,898		940
Securities borrowed	1,866		173		3,582		86
Deposits with banks	5,189		1,079		10,008		1,317
All other interest-earning assets(c)	1,966		642		3,735		966
Total interest income	$	41,644	$	18,646	$	78,648	$	34,142
Interest expense
Interest-bearing deposits	$	9,591	$	898	$	17,228	$	1,080
Federal funds purchased and securities loaned or sold under repurchase agreements	3,400		445		6,204		558
Short-term borrowings(d)	428		113		849		157
Trading liabilities – debt and all other interest-bearing liabilities(e)	2,373		471		4,344		662
Long-term debt	3,876		1,561		7,189		2,637
Beneficial interest issued by consolidated VIEs	197		30		344		48
Total interest expense	$	19,865	$	3,518	$	36,158	$	5,142
Net interest income	$	21,779	$	15,128	$	42,490	$	29,000
Provision for credit losses	2,899		1,101		5,174		2,564
Net interest income after provision for credit losses	$	18,880	$	14,027	$	37,316	$	26,436

(a)Includes the amortization/accretion of unearned income (e.g., purchase premiums/discounts and net deferred fees/costs).

(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.

(c)Includes interest earned on brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets which are classified in other assets on the Consolidated balance sheets.

(d)Includes commercial paper.

(e)All other interest-bearing liabilities includes interest expense on brokerage-related customer payables.

138

Note 8 – Pension and other postretirement employee benefit plans

Refer to Note 8 of JPMorgan Chase’s 2022 Form 10-K for a discussion of JPMorgan Chase’s pension and OPEB plans.

The following table presents the net periodic benefit costs reported in the Consolidated statements of income for the Firm’s defined benefit pension, defined contribution and OPEB plans.


(in millions)	Three months ended June 30,					Six months ended June 30,
	2023		2022				2023		2022
	Pension and OPEB plans				Pension and OPEB plans
Total net periodic defined benefit plan cost/(credit)	$	(94)	$	(75)			$	(188)	$	(139)
Total defined contribution plans	397		357				762		701
Total pension and OPEB cost included in noninterest expense	$	303	$	282			$	574	$	562

As of June 30, 2023 and December 31, 2022, the fair values of plan assets for the Firm’s significant defined benefit pension and OPEB plans were $20.5 billion and $19.9 billion, respectively.

139

Note 9 – Employee share-based incentives

Refer to Note 9 of JPMorgan Chase’s 2022 Form 10-K for a discussion of the accounting policies and other information relating to employee share-based incentives.

The Firm recognized the following noncash compensation expense related to its various employee share-based incentive plans in its Consolidated statements of income.


	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Cost of prior grants of restricted stock units (“RSUs”), performance share units (“PSUs”) and stock appreciation rights (“SARs”) that are amortized over their applicable vesting periods	$	449	$	378	$	806	$	649
Accrual of estimated costs of share-based awards to be granted in future periods, predominantly those to full-career eligible employees	385		441		898		976
Total noncash compensation expense related to employee share-based incentive plans	$	834	$	819	$	1,704	$	1,625

In the first quarter of 2023, in connection with its annual incentive grant for the 2022 performance year, the Firm granted 20 million RSUs and 801 thousand PSUs with weighted-average grant date fair values of $138.57 per RSU and $139.81 per PSU.

140

Note 10 – Investment securities

Investment securities consist of debt securities that are classified as AFS or HTM. Debt securities classified as trading assets are discussed in Note 2. Predominantly all of the Firm’s AFS and HTM securities are held by Treasury and CIO in connection with its asset-liability management activities. At June 30, 2023, the investment securities portfolio consisted of debt securities with an average credit rating of AA+ (based upon external ratings where available, and where not available, based primarily upon internal risk ratings).

Effective January 1, 2023, the Firm adopted the portfolio layer method hedge accounting guidance which permitted a transfer of HTM securities to AFS upon adoption. The Firm

transferred obligations of U.S. states and municipalities with a carrying value of $7.1 billion resulting in the recognition of $38 million net pre-tax unrealized losses in AOCI. This transfer was a noncash transaction. Refer to Note 1 and Note 21 for additional information.

During 2022, the Firm transferred $78.3 billion of investment securities from AFS to HTM for capital management purposes. AOCI included pretax unrealized losses of $4.8 billion on the securities at the date of transfer.

Refer to Note 10 of JPMorgan Chase’s 2022 Form 10-K for additional information regarding the investment securities portfolio.

The amortized costs and estimated fair values of the investment securities portfolio were as follows for the dates indicated.


	June 30, 2023									December 31, 2022
(in millions)	Amortized cost(c)(d)		Gross unrealized gains		Gross unrealized losses		Fair value			Amortized cost(c)(d)		Gross unrealized gains		Gross unrealized losses		Fair value
Available-for-sale securities
Mortgage-backed securities:
U.S. GSEs and government agencies	$	84,749	$	326	$	5,307	$	79,768		$	77,194	$	479	$	6,170	$	71,503
Residential:
U.S.	1,803		1		119		1,685			1,576		1		111		1,466
Non-U.S.	1,861		4		6		1,859			3,176		5		27		3,154
Commercial	2,223		1		168		2,056			2,113		—		155		1,958
Total mortgage-backed securities	90,636		332		5,600		85,368			84,059		485		6,463		78,081
U.S. Treasury and government agencies	63,998		297		1,558		62,737			95,217		302		3,459		92,060
Obligations of U.S. states and municipalities	24,279		172		428		24,023			7,103		86		403		6,786
Non-U.S. government debt securities	22,588		20		568		22,040			20,360		14		678		19,696
Corporate debt securities	410		—		22		388			381		—		24		357
Asset-backed securities:
Collateralized loan obligations	5,506		3		72		5,437			5,916		1		125		5,792
Other	3,324		2		57		3,269			3,152		2		69		3,085
Unallocated portfolio layer fair value basis adjustments(a)	(865)		—		(865)		NA			NA		NA		NA		NA
Total available-for-sale securities	209,876		826		7,440		203,262		(e)	216,188		890		11,221		205,857
Held-to-maturity securities(b)
Mortgage-backed securities:
U.S. GSEs and government agencies	110,517		29		13,201		97,345			113,492		35		13,709		99,818
U.S. Residential	10,293		3		1,206		9,090			10,503		3		1,244		9,262
Commercial	10,712		7		741		9,978			10,361		10		734		9,637
Total mortgage-backed securities	131,522		39		15,148		116,413			134,356		48		15,687		118,717
U.S. Treasury and government agencies	202,655		—		16,825		185,830			207,463		—		18,363		189,100
Obligations of U.S. states and municipalities	11,617		44		758		10,903			19,747		53		1,080		18,720
Asset-backed securities:
Collateralized loan obligations	61,095		42		951		60,186			61,414		4		1,522		59,896
Other	2,052		—		84		1,968			2,325		—		110		2,215
Total held-to-maturity securities	408,941		125		33,766		375,300			425,305		105		36,762		388,648
Total investment securities, net of allowance for credit losses	$	618,817