Business segments

The Firm is managed on a line of business basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset 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 management. Results of these lines of business are presented on a managed basis. For a definition of managed basis, see Explanation and Reconciliation of the Firm’s use of non-GAAP financial measures, on pages 77–78. For a further discussion concerning JPMorgan Chase’s business segments, see Business Segment Results on pages 79–80.

The following is a description of each of the Firm’s business segments, and the products and services they provide to their respective client bases.

Consumer & Community Banking

Consumer & Community Banking (“CCB”) serves consumers and businesses through personal service at bank branches and through ATMs, online, mobile and telephone banking. CCB is organized into Consumer & Business Banking, Mortgage Banking (including Mortgage Production, Mortgage Servicing and Real Estate Portfolios) and Card, Merchant Services & Auto (“Card”). Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Mortgage Banking includes mortgage origination and servicing activities, as well as portfolios comprised of residential mortgages and home equity loans, including the PCI portfolio acquired in the Washington Mutual transaction. Card issues credit cards to consumers and small businesses, provides payment services to corporate and public sector clients through its commercial card products, offers payment processing services to merchants, and provides auto and student loan services.

Corporate & Investment Bank

The Corporate & Investment Bank (“CIB”), comprised of Banking and Markets & Investor Services, offers a broad suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, government and municipal entities. Within Banking, the CIB offers a full range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Also included in Banking is Treasury Services, which includes transaction services, comprised primarily of cash management and liquidity solutions, and trade finance products. The Markets & Investor Services segment of the CIB is a global market-maker in cash securities and derivative instruments, and also offers sophisticated risk management solutions, prime brokerage, and research. Markets & Investor Services also includes the Securities Services business, a leading global custodian which includes custody, fund accounting and administration, and securities lending products sold principally to asset managers, insurance companies and public and private investment funds.

Commercial Banking

Commercial Banking (“CB”) delivers extensive industry knowledge, local expertise and dedicated service to U.S. and multinational clients, including corporations, municipalities, financial institutions and non-profit entities with annual revenue generally ranging from $20 million to $2 billion. CB provides financing to real estate investors and owners. Partnering with the Firm’s other businesses, CB provides comprehensive financial solutions, including lending, treasury services, investment banking and asset management to meet its clients’ domestic and international financial needs.

Asset Management

Asset Management (“AM”), with client assets of $2.4 trillion, is a global leader in investment and wealth management. AM clients include institutions, high-net-worth individuals and retail investors in every major market throughout the world. AM offers investment management across all major asset classes including equities, fixed income, alternatives and money market funds. AM also offers multi-asset investment management, providing solutions for a broad range of clients’ investment needs. For Global Wealth Management clients, AM also provides retirement products and services, brokerage and banking services including trusts and estates, loans, mortgages and deposits. The majority of AM’s client assets are in actively managed portfolios.

Corporate

The Corporate segment comprises Private Equity, Treasury and Chief Investment Office (“CIO”), and Other Corporate, which includes corporate staff units and expense that is centrally managed. Treasury and CIO are predominantly responsible for measuring, monitoring, reporting and managing the Firm’s liquidity, funding and structural interest rate and foreign exchange risks, as well as executing the Firm’s capital plan. The major Other Corporate units include Real Estate, Enterprise Technology, Legal, Compliance, Finance, Human Resources, Internal Audit, Risk Management, Oversight & Control, Corporate Responsibility and various Other Corporate groups. Other centrally managed expense includes the Firm’s occupancy and pension-related expense that are subject to allocation to the businesses.

Segment results

The following tables provide a summary of the Firm’s segment results as of or for the years ended December 31, 2014, 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).

Business segment capital allocation changes

Effective January 1, 2013, the Firm 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 change in equity levels for the lines of businesses was largely driven by the evolving regulatory requirements and higher capital targets the Firm had established under the Basel III Advanced Approach.

Segment results and reconciliation



As of or the year ended December 31, (in millions, except ratios)	Consumer & Community Banking									Corporate & Investment Bank									Commercial Banking
	2014			2013			2012			2014			2013			2012			2014			2013			2012
Noninterest revenue	$	15,937		$	17,552		$	20,813		$	23,458		$	23,810		$	23,104		$	2,349		$	2,298		$	2,283
Net interest income	28,431			28,985			29,465			11,175			10,976			11,658			4,533			4,794			4,629
Total net revenue	44,368			46,537			50,278			34,633			34,786			34,762			6,882			7,092			6,912
Provision for credit losses	3,520			335			3,774			(161		)	(232		)	(479		)	(189		)	85			41
Noninterest expense	25,609			27,842			28,827			23,273			21,744			21,850			2,695			2,610			2,389
Income/(loss) before income tax expense/(benefit)	15,239			18,360			17,677			11,521			13,274			13,391			4,376			4,397			4,482
Income tax expense/(benefit)	6,054			7,299			6,886			4,596			4,387			4,719			1,741			1,749			1,783
Net income/(loss)	$	9,185		$	11,061		$	10,791		$	6,925		$	8,887		$	8,672		$	2,635		$	2,648		$	2,699
Average common equity	$	51,000		$	46,000		$	43,000		$	61,000		$	56,500		$	47,500		$	14,000		$	13,500		$	9,500
Total assets	455,634			452,929			467,282			861,819			843,577			876,107			195,267			190,782			181,502
Return on common equity	18		%	23		%	25		%	10		%	15		%	18		%	18		%	19		%	28		%
Overhead ratio	58			60			57			67			63			63			39			37			35


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

On at least an annual basis, the Firm assesses the level of capital required for each line of business as well as the assumptions and methodologies used to allocate capital to its lines of business and updates equity allocations to its lines of business as refinements are implemented.

Preferred stock dividend allocation reporting change

As part of its funds transfer pricing process, the Firm allocates substantially all of the cost of its outstanding preferred stock to its reportable business segments, while retaining the balance of the cost in Corporate. Prior to the fourth quarter of 2014, this cost was allocated to the Firm’s reportable business segments as interest expense, with an offset recorded as interest income in Corporate. Effective with the fourth quarter of 2014, this cost is no longer included in interest income and interest expense in the segments, but rather is now included in net income applicable to common equity to be consistent with the presentation of firmwide results. As a result of this reporting change, net interest income and net income in the reportable business segments increases; however, there was no impact to the segments’ return on common equity (“ROE”). The Firm’s net interest income, net income, Consolidated balance sheets and consolidated results of operations were not impacted by this reporting change, as preferred stock dividends have been and continue to be distributed from retained earnings and, accordingly, were never reported as a component of the Firm’s consolidated net interest income or net income. Prior period segment amounts have been revised to conform with the current period presentation.



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Asset Management									Corporate									Reconciling Items^(a)									Total
2014			2013			2012			2014			2013			2012			2014			2013			2012			2014			2013			2012
$	9,588		$	9,029		$	7,847		$	1,972		$	3,093		$	190		$	(2,733	)	$	(2,495	)	$	(2,116	)	$	50,571		$	53,287		$	52,121
2,440			2,376			2,163			(1,960		)	(3,115		)	(2,262		)	(985		)	(697		)	(743		)	43,634			43,319			44,910
12,028			11,405			10,010			12			(22		)	(2,072		)	(3,718		)	(3,192		)	(2,859		)	94,205			96,606			97,031
4			65			86			(35		)	(28		)	(37		)	—			—			—			3,139			225			3,385
8,538			8,016			7,104			1,159			10,255			4,559			—			—			—			61,274			70,467			64,729
3,486			3,324			2,820			(1,112		)	(10,249		)	(6,594		)	(3,718		)	(3,192		)	(2,859		)	29,792			25,914			28,917
1,333			1,241			1,078			(1,976		)	(3,493		)	(3,974		)	(3,718		)	(3,192		)	(2,859		)	8,030			7,991			7,633
$	2,153		$	2,083		$	1,742		$	864		$	(6,756	)	$	(2,620	)	$	—		$	—		$	—		$	21,762		$	17,923		$	21,284
$	9,000		$	9,000		$	7,000		$	72,400		$	71,409		$	77,352		$	—		$	—		$	—		$	207,400		$	196,409		$	184,352
128,701			122,414			108,999			931,705			805,987			725,251			NA			NA			NA			2,573,126			2,415,689			2,359,141
23		%	23		%	24		%	NM			NM			NM			NM			NM			NM			10		%	9		%	11		%
71			70			71			NM			NM			NM			NM			NM			NM			65			73			67