Document



(unaudited) As of or for the period ended, (in millions, except share, ratio, headcount data and where otherwise noted)
	1Q17			4Q16			3Q16			2Q16			1Q16
Selected income statement data
Total net revenue	$	24,675		$	23,376		$	24,673		$	24,380		$	23,239
Total noninterest expense	15,019			13,833			14,463			13,638			13,837
Pre-provision profit	9,656			9,543			10,210			10,742			9,402
Provision for credit losses	1,315			864			1,271			1,402			1,824
Income before income tax expense	8,341			8,679			8,939			9,340			7,578
Income tax expense	1,893			1,952			2,653			3,140			2,058
Net income	$	6,448		$	6,727		$	6,286		$	6,200		$	5,520
Earnings per share data
Net income: Basic	$	1.66		$	1.73		$	1.60		$	1.56		$	1.36
Diluted	1.65			1.71			1.58			1.55			1.35
Average shares: Basic^(a)	3,601.7			3,611.3			3,637.7			3,675.5			3,710.6
Diluted^(a)	3,630.4			3,646.6			3,669.8			3,706.2			3,737.6
Market and per common share data
Market capitalization	312,078			307,295			238,277			224,449			216,547
Common shares at period-end	3,552.8			3,561.2			3,578.3			3,612.0			3,656.7
Share price:^(b)
High	$	93.98		$	87.39		$	67.90		$	66.20		$	64.13
Low	83.03			66.10			58.76			57.05			52.50
Close	87.84			86.29			66.59			62.14			59.22
Book value per share	64.68			64.06			63.79			62.67			61.28
Tangible book value per share (“TBVPS”)^(c)	52.04			51.44			51.23			50.21			48.96
Cash dividends declared per share	0.50			0.48			0.48			0.48			0.44
Selected ratios and metrics
Return on common equity (“ROE”)	11		%	11		%	10		%	10		%	9		%
Return on tangible common equity (“ROTCE”)^(c)	13			14			13			13			12
Return on assets	1.03			1.06			1.01			1.02			0.93
Overhead ratio	61			59			59			56			60
Loans-to-deposits ratio	63			65			65			66			64
High quality liquid assets (“HQLA”) (in billions)^(d)	$	528		$	524		$	539		$	516		$	505
Common equity Tier 1 (“CET1”) capital ratio^(e)	12.5%			12.4		%	12.0%			12.0		%	11.9		%
Tier 1 capital ratio^(e)	14.3			14.1			13.6			13.6			13.5
Total capital ratio^(e)	15.6			15.5			15.1			15.2			15.1
Tier 1 leverage ratio^(e)	8.4			8.4			8.5			8.5			8.6
Selected balance sheet data (period-end)
Trading assets	$	402,513		$	372,130		$	374,837		$	380,793		$	366,153
Securities	281,850			289,059			272,401			278,610			285,323
Loans	895,974			894,765			888,054			872,804			847,313
Core loans	812,119			806,152			795,077			775,813			746,196
Average core loans	805,382			799,698			779,383			760,721			737,297
Total assets	2,546,290			2,490,972			2,521,029			2,466,096			2,423,808
Deposits	1,422,999			1,375,179			1,376,138			1,330,958			1,321,816
Long-term debt^(f)	289,492			295,245			309,418			295,627			290,754
Common stockholders’ equity	229,795			228,122			228,263			226,355			224,089
Total stockholders’ equity	255,863			254,190			254,331			252,423			250,157
Headcount	246,345			243,355			242,315			240,046			237,420
Credit quality metrics
Allowance for credit losses	$	14,490		$	14,854		$	15,304		$	15,187		$	15,008
Allowance for loan losses to total retained loans	1.52%			1.55%			1.61%			1.64%			1.66%
Allowance for loan losses to retained loans excluding purchased credit-impaired loans^(g)	1.31			1.34			1.37			1.40			1.40
Nonperforming assets	$	6,826		$	7,535		$	7,779		$	7,757		$	8,023
Net charge-offs^(h)	1,654			1,280			1,121			1,181			1,110
Net charge-off rate^(h)	0.76%			0.58%			0.51%			0.56%			0.53%

The following is management’s discussion and analysis (“MD&A”) of the financial condition and results of operations of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the first quarter of 2017.

This Form 10-Q should be read in conjunction with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission (“2016 Annual Report” or 2016 “Form 10-K”), to which reference is hereby made. See the Glossary of terms and acronyms on pages 151–159 for definitions of terms and acronyms used throughout this Form 10-Q.

The MD&A included in this Form 10-Q contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. 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, see Forward-looking Statements on page 72 of this Form 10-Q and Part I, Item 1A, Risk Factors, on pages 8–21 of JPMorgan Chase’s 2016 Annual Report.

JPMorgan Chase & Co., a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America (“U.S.”), with operations worldwide; the Firm had $2.5 trillion in assets and $255.9 billion in stockholders’ equity as of March 31, 2017. 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 in the U.S. and many of the world’s most prominent corporate, institutional and government clients.

JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank, N.A.”), a national banking association with U.S. branches in 23 states, and Chase Bank USA, National Association (“Chase Bank USA, N.A.”), a national banking association that is the Firm’s credit card-issuing bank. JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities LLC (“JPMorgan Securities”), the Firm’s U.S. investment banking firm. The bank and nonbank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. One of the Firm’s principal operating subsidiaries in the United Kingdom (“U.K.”) is J.P. Morgan Securities plc, a subsidiary of JPMorgan Chase Bank, N.A.

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 is the Consumer & Community Banking (“CCB”) segment. The Firm’s wholesale business segments are Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). For a description of the Firm’s business segments, and the products and services they provide to their respective client bases, refer to Note 33 of JPMorgan Chase’s 2016 Annual Report.

This executive overview of the MD&A highlights selected information and may 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 and its various lines of business, this Form 10-Q should be read in its 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 March 31,
	2017			2016			Change
Selected income statement data
Total net revenue	$	24,675		$	23,239		6	%
Total noninterest expense	15,019			13,837			9
Pre-provision profit	9,656			9,402			3
Provision for credit losses	1,315			1,824			(28	)
Net income	6,448			5,520			17
Diluted earnings per share	$	1.65		$	1.35		22
Selected ratios and metrics
Return on common equity	11		%	9		%
Return on tangible common equity	13			12
Book value per share	$	64.68		$	61.28		6
Tangible book value per share	52.04			48.96			6
Capital ratios^(a)
CET1	12.5%			11.9		%
Tier 1 capital	14.3			13.5
Total capital	15.6			15.1


(a)	Ratios presented are calculated under the Basel III Transitional capital rules and represent the Collins Floor. See Capital Risk Management on pages 32–39 for additional information on Basel III.

Firmwide overview


▪	JPMorgan Chase reported strong results in the first quarter of 2017 with net income of $6.4 billion, or $1.65 per share, on net revenue of $24.7 billion. The Firm reported ROE of 11% and ROTCE of 13%.


▪	Net income increased 17% compared with the prior year reflecting higher net revenue, lower provision for credit losses and lower income tax expense, largely offset by higher noninterest expense.

▪

Total net revenue increased 6% compared with the prior year. Net interest income was $12.1 billion, up 6%, primarily driven by loan growth and the net impact of higher interest rates. Noninterest revenue was $12.6 billion, up 6%, primarily driven by higher CIB Markets and Banking revenue, largely offset by higher Card new account origination costs and lower mortgage servicing rights (“MSRs”) risk management results.


▪	Noninterest expense was $15.0 billion, up 9%, compared with the prior year, primarily driven by higher compensation and legal expense, auto lease depreciation, and FDIC-related expense, as well as a contribution to the Firm’s Foundation.


▪	Income tax expense decreased compared with the prior year predominantly due to a higher tax benefit related to the appreciation of the Firm’s stock price upon vesting of employee stock-awards above their original grant price.

▪

The provision for credit losses was $1.3 billion, a decrease from $1.8 billion in the prior year, due to a benefit in the wholesale provision, partially offset by an increase in the consumer provision. The wholesale benefit reflected a net reduction in the allowance for credit losses of $93 million in the current quarter, primarily driven by Oil & Gas, versus an increase of $713 million in the prior year quarter. The increase in the consumer provision included a write-down of the student loan portfolio to its estimated fair value as a result of transferring the portfolio to held-for-sale, and higher Card net charge-offs, which were in line with expectations. Refer to CCB segment results on page 17 for additional information regarding the student loan transfer.


▪	The total allowance for credit losses was $14.5 billion at March 31, 2017, and the Firm had a loan loss coverage ratio, excluding the PCI portfolio, of 1.31%, compared with 1.40% in the prior year. The Firm’s nonperforming assets totaled $6.8 billion at March 31, 2017, a decrease from the prior-quarter and prior-year levels of $7.5 billion and $8.0 billion, respectively.


▪	Firmwide average core loans increased 9% compared with the prior year.


▪	The Firm added to its capital, ending the first quarter of 2017 with a TBVPS of $52.04, up 6% compared with the prior year.


▪	The Firm’s estimated Basel III Fully Phased-In CET1 capital was $184 billion, and the Advanced and Standardized CET1 ratios were 12.4%.


▪	The Fully Phased-In supplementary leverage ratio (“SLR”) was 6.6% for the Firm and 6.7% for JPMorgan Chase Bank, N.A. at March 31, 2017.

ROTCE, TBVPS and core loans are considered key financial performance measures. Each of the Fully Phased-In capital and leverage measures is considered a key regulatory capital measure. For a further discussion of each of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 13–15, and Capital Risk Management on pages 32–39.

Business highlights


▪	CCB: average core loans and average deposits each increased 11% from the prior year; active mobile customers of 27.3 million, an increase of 14% from the prior year; credit card sales volume increased 15%, and merchant processing volume increased 11%, from the prior year.


▪	CIB maintained its #1 ranking for Global Investment Banking fees with 8.5% wallet share for the three months ended March 31, 2017.


▪	CB had record revenue and record net income. Average loans were also a record, increasing 12% from the prior year.


▪	AWM had record average loans, increasing 7% compared with the prior year; record average deposit balances, increasing 5%; and record assets under management of $1.8 trillion, increasing 10%. 77% of AWM’s mutual fund assets under management ranked in the 1^st or 2^nd quartiles over the past 5 years.

For a detailed discussion of results by line of business, refer to the Business Segment Results on pages 16–30.

JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided credit and raised capital of $561 billion for wholesale and consumer clients during the first three months of 2017:


▪	$69 billion of credit for consumers


▪	$5 billion of credit for U.S. small businesses


▪	$175 billion of credit for corporations


▪	$296 billion of capital raised for corporate clients and non-U.S. government entities


▪	$16 billion of credit and capital raised for nonprofit and U.S. government entities, including states, municipalities, hospitals and universities

2017 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 and are subject to significant risks and uncertainties. These risks and uncertainties could cause the Firm’s actual results to differ materially from those set forth in such forward-looking statements. See Forward-Looking Statements on page 72 of this Form 10-Q and Risk Factors on pages 8–21 of JPMorgan Chase’s 2016 Annual Report. There is no assurance that actual results for the full year of 2017 will be in line with the outlook set forth below, and the Firm does not undertake to update any of these forward-looking statements to reflect the impact of circumstances or events that arise after the date hereof.

JPMorgan Chase’s outlook for the remainder of 2017 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these interrelated factors will affect the performance of the Firm and its lines of business. The Firm expects it will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the legal and regulatory, as well as business and economic, environment in which it operates.

Management’s current expectations:


▪	Second quarter 2017 net interest income is expected to be approximately $400 million higher than in the first quarter of 2017. Management also expects 2017 net interest income to increase approximately $4.5 billion compared with the prior year, based upon market implied interest rates at quarter-end.


▪	The Firm continues to take a disciplined approach to managing its expenses, while investing in growth and innovation. As a result, Firmwide adjusted expense in 2017 is expected to be approximately $58 billion (excluding Firmwide legal expense).

▪

The Firm continues to experience charge-off rates at or near historically low levels, reflecting favorable credit trends across the consumer and wholesale portfolios. Management expects total net charge-offs of approximately $5 billion in 2017, excluding net charge-offs of $467 million related to the student loan portfolio write-down in the first quarter. In Card, management expects the portfolio average net charge-off rate to increase in 2017, but remain below 3.00% for the year, reflecting continued loan growth and the seasoning of newer vintages, with quarterly net-charge offs reflecting normal seasonal trends.

This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the three months ended March 31, 2017 and 2016, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment. For a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations, see pages 67–69 of this Form 10-Q and pages 132–134 of JPMorgan Chase’s 2016 Annual Report.



Revenue
	Three months ended March 31,
(in millions)	2017			2016		Change
Investment banking fees	$	1,817		$	1,333	36	%
Principal transactions	3,582			2,679		34
Lending- and deposit-related fees	1,448			1,403		3
Asset management, administration and commissions	3,677			3,624		1
Securities gains/(losses)	(3		)	51		NM
Mortgage fees and related income	406			667		(39	)
Card income	914			1,301		(30	)
Other income^(a)	770			801		(4	)
Noninterest revenue	12,611			11,859		6
Net interest income	12,064			11,380		6
Total net revenue	$	24,675		$	23,239	6%


(a)	Included operating lease income of $824 million and $615 million for the three months ended March 31, 2017 and 2016, respectively.

Total net revenue increased by 6% on higher net interest income and noninterest revenue. Growth in noninterest revenue was driven by CIB Markets and Banking activities, partially offset by higher Card new account origination costs and lower Mortgage Banking MSR risk management results and servicing revenue.

Investment banking fees increased due to higher debt and equity underwriting fees reflecting strong underlying issuance activity and market share gains, partially offset by lower advisory fees. For additional information, see CIB segment results on pages 21–25 and Note 5.

Principal transactions revenue increased reflecting broad-based strength across products in CIB’s Fixed Income Markets business, including:


▪	improvement in Rates reflecting increased market activity particularly in Europe in advance of upcoming elections and in reaction to central bank actions


▪	higher revenue from Securitized Products and Credit driven by strong demand and spread tightening.

For additional information, see CIB and Corporate segment results on pages 21–25 and page 30, respectively, and

Note 5.

Mortgage fees and related income decreased driven by lower MSR risk management results and lower servicing revenue due to lower average third-party loans serviced. For further information on mortgage fees and related income, see CCB segment results on pages 17–20 and

Note 15.

Card income decreased predominantly driven by higher new account origination costs, partially offset by higher other card-related fees, largely annual fees. For further information, see CCB segment results on pages 17–20.

Other income decreased primarily reflecting the absence of a gain in the prior year on the disposal of an asset in AWM and due to lower other income in CIB, partially offset by higher operating lease income reflecting growth in auto operating lease volume in CCB. For further information on other income, see Note 5.

Net interest income increased primarily driven by loan growth across the businesses and the net impact of higher rates. The Firm’s average interest-earning assets were $2.2 trillion, and the net interest yield on these assets, on a fully taxable equivalent (“FTE”) basis, was 2.33%, an increase of 3 basis points from the prior year.

For additional information on asset management, administration and commissions income, see the segment discussions of CIB and AWM on pages 21–25 and pages 28–29, respectively, and Note 5; on lending- and deposit-related fees, see the segment results for CCB on pages 17–20, CIB on pages 21–25, and CB on pages 26–27 and Note 5; and on securities gains, see the Corporate segment discussion on page 30.



Provision for credit losses
	Three months ended March 31,
	2017			2016		Change
Consumer, excluding credit card	$	442		$	221	100%
Credit card	993			830		20
Total consumer	1,435			1,051		37
Wholesale	(120		)	773		NM
Total provision for credit losses	$	1,315		$	1,824	(28	)%

The provision for credit losses decreased as a result of:


•	a net reduction in the wholesale allowance for credit losses of $93 million versus additions to the allowance of $713 million in the prior year. The net reduction in the current quarter was primarily driven by Oil & Gas; partially offset by


▪	an increase in the consumer provision of $218 million related to the transfer of the student loan portfolio to held-for-sale, and higher net charge-offs of $163 million in the credit card portfolio, which were in line with expectations.

For a more detailed discussion of the student loan transfer, see CCB segment results on pages 17–20; the credit portfolio and the allowance for credit losses, see the segment discussions of CCB on pages 17–20, CIB on pages 21–25, CB on pages 26–27, the Allowance for Credit Losses on pages 53–55 and Note 13.



Noninterest expense
	Three months ended March 31,
	2017		2016		Change
Compensation expense	$	8,201	$	7,660	7	%
Noncompensation expense:
Occupancy	961		883		9
Technology, communications and equipment	1,828		1,618		13
Professional and outside services	1,543		1,548		—
Marketing	713		703		1
Other expense^(a)(b)	1,773		1,425		24
Total noncompensation expense	6,818		6,177		10
Total noninterest expense	$	15,019	$	13,837	9	%


(a)	Included Firmwide legal expense of $218 million and $(46) million for the three months ended March 31, 2017 and 2016, respectively.


(b)	Included FDIC-related expense of $381 million and $269 million for the three months ended March 31, 2017 and 2016, respectively.

Compensation expense increased predominantly driven by:


▪	higher performance-based compensation expense and


▪	investments in headcount, including bankers and support staff in certain businesses.

Noncompensation expense increased as a result of:


▪	higher net legal expense


▪	higher depreciation expense from growth in auto operating lease volume in CCB


▪	higher FDIC-related expense, and


▪	a contribution to the Firm’s Foundation.

For a further discussion of legal expense, see Note 22.



Income tax expense
	Three months ended March 31,
	2017			2016			Change
Income before income tax expense	$	8,341		$	7,578		10	%
Income tax expense	1,893			2,058			(8	)
Effective tax rate	22.7		%	27.2		%

The effective tax rate decreased predominantly due to a higher tax benefit related to the appreciation of the Firm’s stock price upon vesting of employee stock-based awards above their original grant price, and the continued utilization of certain deferred tax assets.

Cash and due from banks and deposits with banks increased primarily driven by deposit growth and a shift in the deployment of excess cash from securities purchased under resale agreements. The Firm’s excess cash is placed with various central banks, predominantly Federal Reserve Banks.

Federal funds sold and securities purchased under resale agreements decreased due to the shift in the deployment of excess cash to deposits with banks.

For additional information on the Firm’s Liquidity Risk Management, see pages 57–61.

Trading assets and liabilities–debt and equity instruments increased predominantly related to client-driven market-making activities in CIB, reflecting :


▪	an increase in CIB Markets trading assets driven by higher debt and equity instruments to facilitate client demand on increased market activity


▪	an increase in trading liabilities driven by higher levels of client-driven short positions in debt instruments.

For additional information, refer to Note 2.

Trading assets and liabilities–derivative receivables and payables decreased predominantly related to client-driven market-making activities in CIB Markets, reflecting a decrease in derivative receivables and payables driven by maturities and market movements, which reduced foreign exchange and interest rate receivables, as well as foreign exchange payables.

For additional information, refer to Derivative contracts on pages 51–52, and Notes 2 and 4.

Loans were flat and reflected the following:


▪	higher wholesale loans predominantly driven by originations of commercial real estate loans and commercial and industrial loans


▪	lower consumer loans reflecting the seasonal decline in credit card balances, lower home equity loans and a write-down of the student loan portfolio which was transferred to held-for-sale, largely offset by originations of high-quality prime mortgages in CCB and AWM.

The allowance for loan losses decreased reflecting the utilization of the allowance for loan losses in connection with the transfer of the student loan portfolio to held-for-sale, and the net reduction in the wholesale allowance primarily driven by Oil & Gas.

For detailed discussion of loans and the allowance for loan losses, refer to Credit Risk Management on pages 40–55, and Notes 2, 3, 12 and 13.

Accrued interest and accounts receivable increased reflecting higher client receivables related to client-driven market-making activities in CIB.

For information on Securities, see Notes 2 and 10; and MSRs, see Note 15.

Deposits increased due to the following:


▪	higher consumer deposits reflecting the continuation of strong growth from existing and new customers, low attrition rates and seasonal factors


▪	higher wholesale deposits driven by growth in client activity in CIB’s Securities Services business, partially offset by the impact of seasonality in CB and lower balances in AWM driven by market improvement, which resulted in net inflows to investment products.

For more information on deposits, refer to the Liquidity Risk Management discussion on pages 57–61; and Notes 2

and 16.

Federal funds purchased and securities loaned or sold under repurchase agreements increased predominantly due to higher financing of client-driven market-making activities in CIB. For additional information on the Firm’s Liquidity Risk Management, see pages 57–61.

Commercial paper increased reflecting higher issuance in the wholesale markets consistent with Treasury and Chief Investment Office’s (“CIO”) short-term funding plans. For additional information, see Liquidity Risk Management on pages 57–61.

Accounts payable and other liabilities decreased due to lower payables to merchants in CCB.

For information on the Firm’s long-term debt activities, see Liquidity Risk Management on pages 57–61; on changes in stockholders’ equity, see page 76, and on the Firm’s capital actions, see Capital actions on page 38.

Consolidated cash flows overview

The following is a discussion of cash flow activities during

the three months ended March 31, 2017 and 2016.



(in millions)	Three months ended March 31,
(in millions)	2017			2016
Net cash provided by/(used in)
Operating activities	$	(20,036	)	$	(21,383	)
Investing activities	(27,037		)	(34,581		)
Financing activities	43,605			53,584
Effect of exchange rate changes on cash	79			102
Net increase/(decrease) in cash and due from banks	$	(3,389	)	$	(2,278	)

Operating activities

Cash used in operating activities for the period ending March 31, 2017 resulted from:

Client-driven market-making activities in CIB


▪	an increase in trading assets-debt and equity instruments to facilitate client demand on increased market activity


▪	an increase in accrued interest and accounts receivable due to higher client receivables


▪	lower derivative receivables, partially offset by lower derivative payables reflecting the impact of maturities and market movements

Other operating activities


▪	a decrease in accounts payable and other liabilities due to lower payables to merchants in CCB


▪	higher net originations and purchases of loans held-for-sale predominantly in CIB and CB.

Cash used in operating activities in 2016 from client-driven market-making activities in CIB resulted from:


▪	an increase in accrued interest and accounts receivable due to higher unsettled securities transactions, and higher brokerage customer receivables


▪	an increase in trading assets, which was largely offset by cash provided by trading liabilities.

Investing activities

Cash used in investing activities during 2017 resulted from:


▪	an increase in deposits with banks, which were placed with various central banks, predominantly Federal Reserve Banks


▪	net loan originations of commercial real estate and commercial and industrial loans in the wholesale portfolio, which were largely offset by lower consumer loans reflecting the seasonal decline in credit card balances

Partially offsetting these cash outflows were net proceeds from paydowns, maturities, sales and purchases of investment securities and a decrease in securities purchased under resale agreements due to the shift in the deployment of excess cash to deposits with banks.

Cash used in investing activities during 2016 resulted from:


▪	an increase in deposits with banks, which were placed with various central banks, predominantly Federal Reserve Banks


▪	net originations of consumer and wholesale loans


▪	a net increase in securities purchased under resale agreements due to a higher demand for securities to cover short positions related to client-driven market-making activities in CIB.

Financing activities

Cash provided by financing activities in 2017 resulted from:


▪	higher consumer deposits reflecting the continuation of strong growth from existing and new customers, low attrition rates and seasonal factors


▪	higher wholesale deposits reflecting growth in client activity


▪	an increase in securities loaned or sold under repurchase agreements predominantly due to higher financing of client-driven market-making activities in CIB.

Cash provided by financing activities in 2016 resulted from:


▪	an increase in consumer deposits reflecting seasonal factors and continued growth from new and existing customers


▪	an increase in wholesale deposits reflecting growth in client activity.

For both periods, cash was used for net payments of long-term borrowings, repurchases of common stock and dividends on common and preferred stock.

For a further discussion of the activities affecting the Firm’s cash flows, see Consolidated Balance Sheets Analysis on pages 9–10, Capital Risk Management on pages 32–39, and Liquidity Risk Management on pages 57–61 of this Form 10-Q, and pages 110–115 of JPMorgan Chase’s 2016 Annual Report.

In the normal course of business, the Firm enters into various contractual obligations that may require future cash payments. Certain obligations are recognized on-balance sheet, while others are off-balance sheet under accounting principles generally accepted in the U.S. (“U.S. GAAP”). The Firm is involved with several types of off–balance sheet arrangements, including through nonconsolidated special-purpose entities (“SPEs”), which are a type of VIE, and through lending-related financial instruments (e.g., commitments and guarantees). For further discussion, see Note 20 of this Form 10-Q and Off–Balance Sheet Arrangements and Contractual Cash Obligations on pages 45–46 and Note 29 of JPMorgan Chase’s 2016 Annual Report.

Special-purpose entities

The most common type of VIE is an SPE. SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. SPEs are an important part of the financial markets, including the mortgage- and asset-backed securities and commercial paper markets, as they provide market liquidity by facilitating investors’ access to specific portfolios of assets and risks. The Firm holds capital, as deemed appropriate, against all SPE-related transactions and related exposures, such as derivative transactions and lending-related commitments and guarantees. For further information on the types of SPEs, see Note 14 of this Form 10-Q, and Note 1 and Note 16 of JPMorgan Chase’s 2016 Annual Report.

Implications of a credit rating downgrade to JPMorgan Chase Bank, N.A.

For certain liquidity commitments to SPEs, JPMorgan Chase Bank, N.A. could be required to provide funding if its short-term credit rating were downgraded below specific levels, primarily “P-1”, “A-1” and “F1” for Moody’s Investors Service (“Moody’s”), Standard & Poor’s and Fitch, respectively. These liquidity commitments support the issuance of asset-backed commercial paper by Firm-administered consolidated SPEs. In the event of a short-term credit rating downgrade, JPMorgan Chase Bank, N.A., absent other solutions, would be required to provide funding to the SPE if the commercial paper could not be reissued as it matured. The aggregate amounts of commercial paper outstanding held by third parties as of March 31, 2017, and December 31, 2016, was $3.1 billion and $2.7 billion, respectively. The aggregate amounts of commercial paper issued by these SPEs could increase in future periods should clients of the Firm-administered consolidated SPEs draw down on certain unfunded lending-related commitments. These unfunded lending-related commitments were $7.0 billion and $7.4 billion at March 31, 2017, and December 31, 2016, respectively. The Firm could facilitate the refinancing of some of the clients’ assets in order to reduce the funding obligation. For further

information, see the discussion of Firm-administered multiseller conduits in Note 14.

The Firm also acts as liquidity provider for certain municipal bond vehicles. The Firm’s obligation to perform as liquidity provider is conditional and is limited by certain termination events, which include bankruptcy or failure to pay by the municipal bond issuer and any credit enhancement provider, an event of taxability on the municipal bonds or the immediate downgrade of the municipal bond to below investment grade. See Note 14 for additional information.

Off–balance sheet lending-related financial instruments, guarantees, and other commitments

JPMorgan Chase provides lending-related financial instruments (e.g., commitments and guarantees) to meet the financing needs of its customers. The contractual amount of these financial instruments represents the maximum possible credit risk to the Firm should the counterparty draw upon the commitment or the Firm be required to fulfill its obligation under the guarantee, and should the counterparty subsequently fail to perform according to the terms of the contract. Most of these commitments and guarantees are refinanced, extended, cancelled, or expire without being drawn or a default occurring. As a result, the total contractual amount of these instruments is not, in the Firm’s view, representative of its actual future credit exposure or funding requirements. For further discussion of lending-related financial instruments, guarantees and other commitments, and the Firm’s accounting for them, see Lending-related commitments on page 51 and Note 20. For a discussion of liabilities associated with loan sales and securitization-related indemnifications, see Note 20.

The Firm prepares its Consolidated Financial Statements using U.S. GAAP; these financial statements appear on pages 73–77. That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year-to-year and enables a comparison of the Firm’s performance with other companies’ U.S. GAAP financial statements.

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

Management also uses certain non-GAAP financial measures at the Firm and business-segment level, because these other non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Firm or of the particular business segment, as the case may be, and, therefore, facilitate a comparison of the Firm or the business segment with the performance of its relevant competitors. For additional information on these non-GAAP measures, see Business Segment Results on pages 16–30.

Additionally, certain credit metrics and ratios disclosed by the Firm exclude PCI loans, and are therefore non-GAAP measures. For additional information on these non-GAAP measures, see Credit Risk Management on pages 40–55.

Non-GAAP financial measures used by the Firm may not be comparable to similarly named non-GAAP financial measures used by other companies.

Net interest income excluding CIB’s Markets businesses

In addition to reviewing net interest income on a managed basis, management also reviews net interest income excluding net interest income arising from CIB’s Markets businesses to assess the performance of the Firm’s lending, investing (including asset-liability management) and deposit-raising activities. CIB’s Markets businesses represent both Fixed Income Markets and Equity Markets. The data presented below are non-GAAP financial measures due to the exclusion of net interest income from CIB’s Markets businesses (“CIB Markets”).

Management believes this exclusion provides investors and analysts with another measure by which to analyze the non-markets-related business trends of the Firm and provides a comparable measure to other financial institutions that are primarily focused on lending, investing and deposit-raising activities.



Three months ended March 31, (in millions, except rates)
Three months ended March 31, (in millions, except rates)	2017			2016			Change
Net interest income – managed basis^(a)(b)	$	12,393		$	11,673		6	%
Less: CIB Markets net interest income^(c)	1,364			1,499			(9	)
Net interest income excluding CIB Markets^(a)	$	11,029		$	10,174		8

Average interest-earning assets	$	2,160,912		$	2,043,983		6
Less: Average CIB Markets interest-earning assets^(c)	522,759			515,786			1
Average interest-earning assets excluding CIB Markets	$	1,638,153		$	1,528,197		7	%
Net interest yield on average interest-earning assets – managed basis	2.33		%	2.30		%
Net interest yield on average CIB Markets interest-earning assets^(c)	1.06			1.17
Net interest yield on average interest-earning assets excluding CIB Markets	2.73		%	2.68		%


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


(b)	For a reconciliation of net interest income on a reported and managed basis, see reconciliation from the Firm’s reported U.S. GAAP results to managed basis on page 13.


(c)	The prior period amounts were revised to align with CIB’s Markets businesses. For further information on CIB’s Markets businesses, see page 24.

Tangible common equity, ROTCE and TBVPS

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

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 & 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 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 and Key Performance Measures on pages 13–15.

Description of business segment reporting methodology

Results of the business segments are intended to reflect each segment as if it were a stand-alone business. The management reporting process that derives business segment results allocates income and expense using market-based methodologies. For further information

about line of business capital, see Line of business equity

on page 37.

The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and further refinements may be implemented in future periods.

Business segment capital allocation changes

The amount of capital assigned to each business is referred to as equity. 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. Through the end of 2016, capital was allocated to the lines of business based on a single measure, Basel III Advanced Fully Phased-In RWA. Effective January 1, 2017, the Firm’s methodology used to allocate capital to the business segments was updated. The new methodology incorporates Basel III Standardized Fully Phased-In RWA (as well as Basel III Advanced Fully Phased-In RWA), leverage, the GSIB surcharge, and a simulation of capital in a severe stress environment. The methodology will continue to be weighted towards Basel III Advanced Fully Phased-In RWA because the Firm believes it to be the best proxy for economic risk. In addition, under the new methodology, capital is no longer allocated to each line of business for goodwill and other intangibles associated with acquisitions effected by the line of business.

For a further discussion of those methodologies, see Business Segment Results – Description of business segment reporting methodology on pages 51–52 of JPMorgan Chase’s 2016 Annual Report.

The following discussions of the business segment results are based on a comparison of the three months ended March 31, 2017 versus the corresponding period in the prior year, unless otherwise specified.



Selected income statement data
	Three months ended March 31,
(in millions, except ratios)	2017			2016			Change
Revenue
Lending- and deposit-related fees	$	812		$	769		6	%
Asset management, administration and commissions	539			530			2
Mortgage fees and related income	406			667			(39	)
Card income	817			1,191			(31	)
All other income	743			649			14
Noninterest revenue	3,317			3,806			(13	)
Net interest income	7,653			7,311			5
Total net revenue	10,970			11,117			(1	)

Provision for credit losses	1,430			1,050			36

Noninterest expense
Compensation expense	2,533			2,382			6
Noncompensation expense^(a)	3,862			3,706			4
Total noninterest expense	6,395			6,088			5
Income before income tax expense	3,145			3,979			(21	)
Income tax expense	1,157			1,489			(22	)
Net income	$	1,988		$	2,490		(20	)

Revenue by line of business
Consumer & Business Banking	$	4,906		$	4,550		8
Mortgage Banking	1,529			1,876			(18	)
Card, Commerce Solutions & Auto	4,535			4,691			(3	)

Mortgage fees and related income details:
Net production revenue	141			162			(13	)
Net mortgage servicing revenue^(b)	265			505			(48	)
Mortgage fees and related income	$	406		$	667		(39	)%

Financial ratios
Return on equity	15		%	19		%
Overhead ratio	58			55

Note: In the discussion and the tables which follow, CCB presents certain financial measures which exclude the impact of PCI loans; these are non-GAAP financial measures.


(a)	Included operating lease depreciation expense of $599 million and $432 million for the three months ended March 31, 2017 and 2016, respectively.


(b)	Included MSR risk management of $(52) million and $129 million for the three months ended March 31, 2017 and 2016, respectively.

Quarterly results

Net income was $2.0 billion, a decrease of 20%, driven by higher provision for credit losses, higher noninterest expense and lower net revenue.

Net revenue was $11.0 billion, a decrease of 1%. Net interest income was $7.7 billion, up 5%, driven by higher deposit balances and higher loan balances, partially offset by loan spread compression. Noninterest revenue was $3.3 billion, down 13%, driven by higher new account origination costs in Card, lower MSR risk management results and lower servicing revenue, partially offset by higher auto lease volume and higher card- and deposit-related fees. See Note 15 for further information regarding changes in value of the MSR asset and related hedges, and mortgage fees and related income.

Noninterest expense was $6.4 billion, an increase of 5%, driven by higher auto lease depreciation and business growth.

The provision for credit losses was $1.4 billion, an increase of 36%, driven by the transfer of the student loan portfolio to held-for-sale, and higher net charge-offs in the credit card portfolio, which were in line with expectations.

During the first quarter of 2017, the Firm transferred the student loan portfolio to held-for-sale, resulting in a write-down of the portfolio to the estimated fair value at the time of the transfer. This write-down was recognized predominantly as a $467 million charge-off, resulting in a $218 million increase in the provision for credit losses after utilization of the allowance for loan losses of $249 million. The transfer impacted certain loan and credit-related metrics, including net charge-offs, net charge-off rates and the allowance for loan losses.

Subsequent to March 31, 2017, the Firm entered into an agreement to sell the student loan portfolio. The carrying value of the student loan portfolio was $6.3 billion as of March 31, 2017. The sale is scheduled to close over the next several months and is not expected to have a material impact on the Firm’s Consolidated Financial Statements.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except headcount)	2017		2016		Change
Selected balance sheet data (period-end)
Total assets	$	524,770	$	505,071	4	%
Loans:
Consumer & Business Banking	24,386		22,889		7
Home equity	48,234		56,627		(15	)
Residential mortgage and other	185,114		172,413		7
Mortgage Banking	233,348		229,040		2
Card	135,016		126,090		7
Auto	65,568		62,937		4
Student	6,253		7,890		(21	)
Total loans	464,571		448,846		4
Core loans	381,393		348,802		9
Deposits	646,962		582,026		11
Equity	51,000		51,000		—
Selected balance sheet data (average)
Total assets	$	532,098	$	503,231	6
Loans:
Consumer & Business Banking	24,359		22,775		7
Home equity	49,278		57,717		(15	)
Residential mortgage and other	183,756		168,694		9
Mortgage Banking	233,034		226,411		3
Card	137,211		127,299		8
Auto	65,315		61,252		7
Student	6,916		8,034		(14	)
Total loans	466,835		445,771		5
Core loans	381,016		343,705		11
Deposits	622,915		562,284		11
Equity	51,000		51,000		—
Headcount	133,590		129,925		3%



Selected metrics
	As of or for the three months ended March 31,
(in millions, except ratio data)	2017			2016			Change
Credit data and quality statistics
Nonaccrual loans^(a)(b)	$	4,442		$	5,117		(13	)%

Net charge-offs^(c)
Consumer & Business Banking	57			56			2
Home equity	47			59			(20	)
Residential mortgage and other	3			1			200
Mortgage Banking	50			60			(17	)
Card	993			830			20
Auto	81			67			21
Student^(d)	498			37			NM
Total net charge-offs^(d)	$	1,679		$	1,050		60

Net charge-off rate^(c)
Consumer & Business Banking	0.95		%	0.99		%
Home equity^(e)	0.52			0.55
Residential mortgage and other^(e)	0.01			—
Mortgage Banking^(e)	0.10			0.13
Card^(f)	2.94			2.62
Auto	0.50			0.44
Student	NM			1.85
Total net charge-off rate^(d)(e)	1.58			1.04

30+ day delinquency rate
Mortgage Banking^(g)(h)	1.08		%	1.41		%
Card⁽ⁱ⁾	1.66			1.45
Auto	0.93			0.94
Student^(j)	—			1.41

90+ day delinquency rate — Card⁽ⁱ⁾	0.87			0.75

Allowance for loan losses
Consumer & Business Banking	$	753		$	703		7
Mortgage Banking, excluding PCI loans	1,328			1,588			(16	)
Mortgage Banking — PCI loans^(c)	2,287			2,695			(15	)
Card	4,034			3,434			17
Auto	474			399			19
Student	—			299			(100	)
Total allowance for loan losses^(c)	$	8,876		$	9,118		(3)%


(a)	Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing.

(b)

At March 31, 2017 and 2016, nonaccrual loans excluded loans 90 or more days past due as follows: (1) mortgage loans insured by U.S. government agencies of $4.5 billion and $5.7 billion, respectively; and (2) student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of $234 million and $269 million, respectively. These amounts have been excluded based upon the government guarantee.


(c)	Net charge-offs and the net charge-off rates for the three months ended March 31, 2017 and 2016, excluded $24 million and $47 million, respectively, of write-offs in the PCI portfolio. These write-offs

decreased the allowance for loan losses for PCI loans. For further information on PCI write-offs, see summary of changes in the allowances on page 54.


(d)	For the first quarter of 2017, excluding net charge-offs of $467 million related to the student loan portfolio write-down, the total net charge-off rate would have been 1.14%.


(e)	Excludes the impact of PCI loans. For the three months ended March 31, 2017 and 2016, the net charge-off rates including the impact of PCI loans were as follows: (1) home equity of 0.39% and 0.41%, respectively; (2) residential mortgage and other of 0.01% and -%, respectively; (3) Mortgage Banking of 0.09% and 0.11%, respectively; and (4) total CCB of 1.46% and 0.95%, respectively.


(f)	Average credit card loans included loans held-for-sale of $99 million and $72 million for the three months ended March 31, 2017 and 2016, respectively. These amounts are excluded when calculating the net charge-off rate.


(g)	At March 31, 2017 and 2016, excluded mortgage loans insured by U.S. government agencies of $6.3 billion and $7.6 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.


(h)	Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 9.11% and 10.47% at March 31, 2017 and 2016, respectively.


(i)	Period-end credit card loans included loans held-for-sale of $99 million and $78 million at March 31, 2017 and 2016, respectively. These amounts are excluded when calculating delinquency rates.


(j)	Excluded student loans insured by U.S. government agencies under FFELP of $471 million at March 31, 2016, that are 30 or more days past due. This amount has been excluded based upon the government guarantee.



Selected metrics
	As of or for the three months ended March 31,
(in billions, except ratios and where otherwise noted)	2017			2016			Change
Business Metrics
CCB households (in millions)	60.4			58.5			3	%
Number of branches	5,246			5,385			(3	)
Active digital customers (in thousands)^(a)	45,463			42,458			7
Active mobile customers (in thousands)^(b)	27,256			23,821			14
Debit and credit card sales volume	208.4			187.2			11

Consumer & Business Banking
Average deposits	$	609.0		$	548.4		11
Deposit margin	1.88		%	1.86		%
Business banking origination volume	$	1.7		$	1.7		1
Client investment assets	245.1			220.0			11

Mortgage Banking
Mortgage origination volume by channel
Retail	$	9.0		$	8.7		3
Correspondent	13.4			13.7			(2	)
Total mortgage origination volume^(c)	$	22.4		$	22.4		—

Total loans serviced (period-end)	$	836.3		$	898.7		(7	)
Third-party mortgage loans serviced (period-end)	582.6			655.4			(11	)
MSR carrying value (period-end)	6.1			5.7			7
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)	1.05		%	0.87		%

MSR revenue multiple^(d)	3.00		x	2.49		x

Card, excluding Commercial Card
Credit card sales volume	$	139.7		$	121.7		15
New accounts opened (in millions)	2.5			2.3			9

Card Services
Net revenue rate	10.15		%	11.81		%

Commerce Solutions
Merchant processing volume	$	274.3		$	247.5		11

Auto
Loan and lease origination volume	$	8.0		$	9.6		(17	)
Average Auto operating lease assets	13.8			9.6			43%


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


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


(c)	Firmwide mortgage origination volume was $25.6 billion and $24.4 billion for the three months ended March 31, 2017 and 2016, respectively.


(d)	Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of annualized loan servicing-related revenue to third-party mortgage loans serviced (average).

For a discussion of the business profile of CIB, see pages 58–62 of JPMorgan Chase’s 2016 Annual Report and Line of Business Metrics on page 157.



Selected income statement data
	Three months ended March 31,
(in millions, except ratios)	2017			2016			Change
Revenue
Investment banking fees	$	1,812		$	1,321		37	%
Principal transactions	3,507			2,470			42
Lending- and deposit-related fees	388			394			(2	)
Asset management, administration and commissions	1,052			1,069			(2	)
All other income	177			280			(37	)
Noninterest revenue	6,936			5,534			25
Net interest income	2,600			2,601			—
Total net revenue^(a)	9,536			8,135			17

Provision for credit losses	(96		)	459			NM

Noninterest expense
Compensation expense	2,800			2,600			8
Noncompensation expense	2,321			2,208			5
Total noninterest expense	5,121			4,808			7
Income before income tax expense	4,511			2,868			57
Income tax expense	1,270			889			43
Net income	$	3,241		$	1,979		64%
Financial ratios
Return on equity	18		%	11		%
Overhead ratio	54			59
Compensation to revenue ratio	29			32


(a)	Included tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bonds of $551 million and $498 million for the three months ended March 31, 2017 and 2016, respectively.



Selected income statement data
	Three months ended March 31,
(in millions)	2017			2016			Change
Revenue by business
Investment Banking	$	1,651		$	1,231		34	%
Treasury Services	981			884			11
Lending	389			302			29
Total Banking	3,021			2,417			25
Fixed Income Markets	4,215			3,597			17
Equity Markets	1,606			1,576			2
Securities Services	916			881			4
Credit Adjustments & Other^(a)	(222		)	(336		)	34
Total Markets & Investor Services	6,515			5,718			14
Total net revenue	$	9,536		$	8,135		17	%

(a)

Consists primarily of credit valuation adjustments (“CVA”) managed by the Credit Portfolio Group, funding valuation adjustments (“FVA”) and debit valuation adjustments (“DVA”) on derivatives. Results 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. For additional information, see Accounting and Reporting Developments on pages 70–71, and Notes 2, 3 and 18.

Quarterly results

Net income was $3.2 billion, up 64%, reflecting higher net revenue, a lower provision for credit losses and a tax benefit related to the appreciation of the Firm’s stock price upon vesting of employee stock-based awards above their original grant price, partially offset by higher noninterest expense.

Net revenue was $9.5 billion, up 17%.

Banking revenue was $3.0 billion, up 25%. Investment banking revenue was $1.7 billion, up 34%, driven by higher debt and equity underwriting fees, partially offset by lower advisory fees. The Firm maintained its #1 ranking for Global Investment Banking fees, according to Dealogic. Debt underwriting fees were $917 million, up 73%, driven by a higher share of fees and overall increase in industry-wide fee levels. Performance in the prior year quarter was impacted by fewer large acquisition financing deals. Equity underwriting fees were $394 million, up 92%, driven by growth in industry-wide issuance including a strong IPO market. Advisory fees were $501 million, down 14%, compared to a strong prior-year quarter. Treasury Services revenue was $981 million, up 11%, driven by the impact of higher interest rates and growth in operating deposits. Lending revenue was $389 million, up 29%, reflecting higher gains on securities received from restructurings and lower fair value losses on hedges of accrual loans.

Markets & Investor Services revenue was $6.5 billion, up 14%. Fixed Income Markets revenue was $4.2 billion, up 17%, driven by higher revenue in Securitized Products, Rates and Credit. Performance in Securitized Products and Credit was driven by strong demand and spread tightening.



For the quarterly period ended	Commission file
March 31, 2017	number 1-5805



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

270 Park Avenue, New York, New York	10017
(Address of principal executive offices)	(Zip Code)



Large accelerated filer x	Accelerated file	o

Non-accelerated filer (Do not check if a smaller reporting company) o	Smaller reporting company	o

	Emerging growth company	o

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. o



Part I – Financial information		Page
Item 1.	Financial Statements.
	Consolidated Financial Statements – JPMorgan Chase & Co.:
	Consolidated statements of income (unaudited) for the three months ended March 31, 2017 and 2016	73
	Consolidated statements of comprehensive income (unaudited) for the three months ended March 31, 2017 and 2016	74
	Consolidated balance sheets (unaudited) at March 31, 2017, and December 31, 2016	75
	Consolidated statements of changes in stockholders’ equity (unaudited) for the three months ended March 31, 2017 and 2016	76
	Consolidated statements of cash flows (unaudited) for the three months ended March 31, 2017 and 2016	77
	Notes to Consolidated Financial Statements (unaudited)	78
	Report of Independent Registered Public Accounting Firm	149
	Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the three months ended March 31, 2017 and 2016	150
	Glossary of Terms and Acronyms and Line of Business Metrics	151
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	7
	Consolidated Balance Sheets Analysis	9
	Consolidated Cash Flows Analysis	11
	Off-Balance Sheet Arrangements	12
	Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures	13
	Business Segment Results	16
	Enterprise-Wide Risk Management	31
	Capital Risk Management	32
	Credit Risk Management	40
	Country Risk Management	56
	Liquidity Risk Management	57
	Market Risk Management	62
	Critical Accounting Estimates Used by the Firm	67
	Accounting and Reporting Developments	70
	Forward-Looking Statements	72
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	160
Item 4.	Controls and Procedures.	160
Part II – Other information
Item 1.	Legal Proceedings.	160
Item 1A.	Risk Factors.	160
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	160
Item 3.	Defaults Upon Senior Securities.	161
Item 4.	Mine Safety Disclosures.	161
Item 5.	Other Information.	161
Item 6.	Exhibits.	162



Selected Consolidated balance sheets data
(in millions)	Mar 31, 2017			Dec 31, 2016			Change
Assets
Cash and due from banks	$	20,484		$	23,873		(14	)%
Deposits with banks	439,911			365,762			20
Federal funds sold and securities purchased under resale agreements	190,566			229,967			(17	)
Securities borrowed	92,309			96,409			(4	)
Trading assets:
Debt and equity instruments	346,450			308,052			12
Derivative receivables	56,063			64,078			(13	)
Securities	281,850			289,059			(2	)
Loans	895,974			894,765			—
Allowance for loan losses	(13,413		)	(13,776		)	(3	)
Loans, net of allowance for loan losses	882,561			880,989			—
Accrued interest and accounts receivable	60,038			52,330			15
Premises and equipment	14,227			14,131			1
Goodwill	47,292			47,288			—
Mortgage servicing rights	6,079			6,096			—
Other intangible assets	847			862			(2	)
Other assets	107,613			112,076			(4	)
Total assets	$	2,546,290		$	2,490,972		2	%


(a)	The prior period amounts have been revised to conform with the current period presentation. The revision had no impact on the Firm’s reported earnings per share.


(c)	TBVPS and ROTCE are non-GAAP financial measures. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Financial Performance Measures on pages 13–15.


(d)	HQLA represents the amount of assets that qualify for inclusion in the liquidity coverage ratio. For additional information, see HQLA on page 57.


(f)	Included unsecured long-term debt of $212.0 billion, $212.6 billion, $226.8 billion, $220.6 billion and $216.1 billion at March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016 and March 31, 2016, respectively.


(g)	Excluded the impact of residential real estate purchased credit-impaired (“PCI”) loans, a non-GAAP financial measure. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 13–15. For further discussion, see Allowance for credit losses on pages 53–55.



	Period-end				Average
(in millions, except per share and ratio data)	Mar 31, 2017		Dec 31, 2016		Three months ended March 31,
(in millions, except per share and ratio data)	Mar 31, 2017		Dec 31, 2016		2017			2016
Common stockholders’ equity	$	229,795	$	228,122	$	227,703		$	221,561
Less: Goodwill	47,292		47,288		47,293			47,332
Less: Certain identifiable intangible assets	847		862		853			985
Add: Deferred tax liabilities^(a)	3,225		3,230		3,228			3,177
Tangible common equity	$	184,881	$	183,202	$	182,785		$	176,421

Return on tangible common equity	NA		NA		13		%	12		%
Tangible book value per share	$	52.04	$	51.44	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.


▪	Capital, risk-weighted assets (“RWA”), and capital and leverage ratios presented under Basel III Standardized and Advanced Fully Phased-In rules and


▪	SLR calculated under Basel III Advanced Fully Phased-In rules.



Three months ended March 31,	Provision for credit losses							Net income/(loss)							Return on equity
(in millions, except ratios)	2017			2016			Change	2017		2016			Change		2017		2016
Consumer & Community Banking	$	1,430		$	1,050		36%	$	1,988	$	2,490		(20)%		15	%	19	%
Corporate & Investment Bank	(96		)	459			NM	3,241		1,979			64		18		11
Commercial Banking	(37		)	304			NM	799		496			61		15		11
Asset & Wealth Management	18			13			38	385		587			(34	)	16		25
Corporate	—			(2		)	NM	35		(32		)	NM		NM		NM
Total	$	1,315		$	1,824		(28)%	$	6,448	$	5,520		17%		11%		9	%



x Yes	o No



x Yes	o No



o Yes	x No



INTRODUCTION