Business Segments

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

BUSINESS SEGMENTS

Business segments

The Firm is managed on a line of business basis. The business segment financial results presented reflect the current organization of JPMorgan Chase. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset Management. In addition, there is a Corporate/Private Equity 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 management. Results of these lines of business are presented on a managed basis. For a further discussion concerning JPMorgan Chase’s business segments, see Business Segment Results on pages 17–18 of this Form 10-Q, and pages 78–79 and Note 33 on pages 326–329 of JPMorgan Chase’s 2012 Annual Report.

Segment results

The following tables provide a summary of the Firm’s segment results for the three and six months ended June 30, 2013 and 2012, on a managed basis. Total net revenue (noninterest revenue and net interest income) for each of the segments is presented on a fully taxable-equivalent (“FTE”) basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. This non-GAAP financial measure allows management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense/(benefit).

Effective January 1, 2013, the Firm further refined the capital allocation framework to align it with the revised line of business structure that became effective in the fourth quarter of 2012. The increase in equity levels for the lines of businesses is largely driven by regulatory guidance on Basel III requirements, principally for CIB and CIO, and by anticipated business growth.

Segment results and reconciliation(a)
As of or for the three months ended June 30, (in millions, except ratios)	Consumer & Community Banking(b)						Corporate & Investment Bank						Commercial Banking						Asset Management
	2013			2012			2013			2012			2013			2012			2013			2012
Noninterest revenue	$	4,921		$	5,289		$	7,171		$	6,261		$	551		$	562		$	2,156		$	1,852
Net interest income	7,094			7,161			2,705			2,725			1,177			1,129			569			512
Total net revenue	12,015			12,450			9,876			8,986			1,728			1,691			2,725			2,364
Provision for credit losses	(19		)	179			(6		)	29			44			(17		)	23			34
Noninterest expense	6,864			6,837			5,742			5,293			652			591			1,892			1,701
Income/(loss) before income tax expense/(benefit)	5,170			5,434			4,140			3,664			1,032			1,117			810			629
Income tax expense/(benefit)	2,081			2,152			1,302			1,288			411			444			310			238
Net income/(loss)	$	3,089		$	3,282		$	2,838		$	2,376		$	621		$	673		$	500		$	391
Average common equity	$	46,000		$	43,000		$	56,500		$	47,500		$	13,500		$	9,500		$	9,000		$	7,000
Total assets	460,642			466,650			873,527			897,413			184,124			163,698			115,157			98,704
Return on common equity	27		%	31		%	20		%	20		%	18		%	28		%	22		%	22		%
Overhead ratio	57			55			58			59			38			35			69			72

As of or for the three months ended June 30, (in millions, except ratios)	Corporate/Private Equity(b)						Reconciling Items(c)						Total
	2013			2012			2013			2012			2013			2012
Noninterest revenue	$	290		$	(2,413	)	$	(582	)	$	(517	)	$	14,507		$	11,034
Net interest income	(676		)	(186		)	(165		)	(195		)	10,704			11,146
Total net revenue	(386		)	(2,599		)	(747		)	(712		)	25,211			22,180
Provision for credit losses	5			(11		)	—			—			47			214
Noninterest expense	716			544			—			—			15,866			14,966
Income/(loss) before income tax expense/(benefit)	(1,107		)	(3,132		)	(747		)	(712		)	9,298			7,000
Income tax expense/(benefit)	(555		)	(1,370		)	(747		)	(712		)	2,802			2,040
Net income/(loss)	$	(552	)	$	(1,762	)	$	—		$	—		$	6,496		$	4,960
Average common equity	$	72,283		$	74,021		$	—		$	—		$	197,283		$	181,021
Total assets	806,044			663,681			NA			NA			2,439,494			2,290,146
Return on average common equity	NM			NM			NM			NM			13		%	11		%
Overhead ratio	NM			NM			NM			NM			63			67

Segment results and reconciliation(a)
As of or for the six months ended June 30, (in millions, except ratios)	Consumer & Community Banking(b)						Corporate & Investment Bank						Commercial Banking						Asset Management
	2013			2012			2013			2012			2013			2012			2013			2012
Noninterest revenue	$	9,327		$	10,275		$	14,528		$	12,749		$	1,086		$	1,119		$	4,250		$	3,739
Net interest income	14,303			14,527			5,488			5,575			2,315			2,229			1,128			995
Total net revenue	23,630			24,802			20,016			18,324			3,401			3,348			5,378			4,734
Provision for credit losses	530			821			5			26			83			60			44			53
Noninterest expense	13,654			13,882			11,853			11,504			1,296			1,189			3,768			3,430
Income/(loss) before income tax expense/(benefit)	9,446			10,099			8,158			6,794			2,022			2,099			1,566			1,251
Income tax expense/(benefit)	3,771			3,892			2,710			2,385			805			835			579			474
Net income/(loss)	$	5,675		$	6,207		$	5,448		$	4,409		$	1,217		$	1,264		$	987		$	777
Average common equity	$	46,000		$	43,000		$	56,500		$	47,500		$	13,500		$	9,500		$	9,000		$	7,000
Total assets	460,642			466,650			873,527			897,413			184,124			163,698			115,157			98,704
Return on common equity	25		%	29		%	19		%	19		%	18		%	27		%	22		%	22		%
Overhead ratio	58			56			59			63			38			36			70			72

As of or for the six months ended June 30, (in millions, except ratios)	Corporate/Private Equity(b)						Reconciling Items(c)						Total
	2013			2012			2013			2012			2013			2012
Noninterest revenue	$	651		$	(1,411	)	$	(1,146	)	$	(1,051	)	$	28,696		$	25,420
Net interest income	(1,270		)	(148		)	(327		)	(366		)	21,637			22,812
Total net revenue	(619		)	(1,559		)	(1,473		)	(1,417		)	50,333			48,232
Provision for credit losses	2			(20		)	—			—			664			940
Noninterest expense	718			3,306			—			—			31,289			33,311
Income/(loss) before income tax expense/(benefit)	(1,339		)	(4,845		)	(1,473		)	(1,417		)	18,380			13,981
Income tax expense/(benefit)	(1,037		)	(2,072		)	(1,473		)	(1,417		)	5,355			4,097
Net income/(loss)	$	(302	)	$	(2,773	)	$	—		$	—		$	13,025		$	9,884
Average common equity	$	71,016		$	72,366		$	—		$	—		$	196,016		$	179,366
Total assets	806,044			663,681			NA			NA			2,439,494			2,290,146
Return on average common equity	NM			NM			NM			NM			13		%	11		%
Overhead ratio	NM			NM			NM			NM			62			69

(a) Managed basis starts with the reported U.S. GAAP results and includes certain reclassifications as discussed below that do not have any impact on net income as reported by the lines of business or by the Firm as a whole.

(b) For the 2012 periods, certain income statement and balance sheet line items were revised to reflect the transfer of certain functions and staff from Corporate/Private Equity to CCB, effective January 1, 2013.

(c) Segment managed results reflect revenue on a FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These FTE adjustments are eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results.