Off-balance Sheet Lending-related Financial Instruments, Guarantees, and Other Commitments

9 Months Ended

Sep. 30, 2024

Off-Balance Sheet Lending-Related Financial Instruments, Guarantees and Other Commitments [Abstract]

Off-balance Sheet Lending-related Financial Instruments, Guarantees, and Other Commitments

Off–balance sheet lending-related

financial instruments, guarantees, and other

commitments

JPMorgan Chase provides lending-related financial instruments (e.g., commitments and guarantees) to address the financing needs of its customers and clients. The contractual amount of these financial instruments represents the maximum possible credit risk to the Firm should the customer or client draw upon the commitment or the Firm be required to fulfill its obligation under the guarantee, and should the customer or client subsequently fail to perform according to the terms of the contract. Most of these commitments and guarantees have historically been refinanced, extended, cancelled, or expired 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 expected future credit exposure or funding requirements. Refer to Note 28 of JPMorgan Chase’s 2023 Form 10-K for a further discussion of lending-related commitments and guarantees, and the Firm’s related accounting policies.

To provide for expected credit losses in wholesale and certain consumer lending-related commitments, an allowance for credit losses on lending-related commitments is maintained. Refer to Note 12 for further information regarding the allowance for credit losses on lending-related commitments.

The following table summarizes the contractual amounts and carrying values of off-balance sheet lending-related financial instruments, guarantees and other commitments at September 30, 2024 and December 31, 2023. The amounts in the table below for credit card, home equity and certain scored business banking lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these products will be utilized at the same time. The Firm can reduce or cancel credit card and certain scored business banking lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. In addition, the Firm typically closes credit card lines when the borrower is 60 days or more past due. The Firm may reduce or close HELOCs when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower.


Off–balance sheet lending-related financial instruments, guarantees and other commitments
	Contractual amount												Carrying value(h)(i)
	September 30, 2024										Dec 31, 2023			Sep 30, 2024			Dec 31, 2023
By remaining maturity (in millions)	Expires in 1 year or less		Expires after 1 year through 3 years		Expires after 3 years through 5 years		Expires after 5 years		Total		Total
Lending-related
Consumer, excluding credit card:
Residential Real Estate(a)	$	10,843	$	7,347	$	5,046	$	8,204	$	31,440	$	30,125		$	563	(j)	$	678	(j)
Auto and other	10,261		18		—		3,603		13,882		15,278			55		(j)	148		(j)
Total consumer, excluding credit card	21,104		7,365		5,046		11,807		45,322		45,403			618			826
Credit card(b)	989,594		—		—		—		989,594		915,658			—			—
Total consumer(c)	1,010,698		7,365		5,046		11,807		1,034,916		961,061			618			826
Wholesale:
Other unfunded commitments to extend credit(d)	107,885		202,960		172,960		24,492		508,297		503,526			2,695		(j)	2,797		(j)
Standby letters of credit and other financial guarantees(d)	15,995		9,386		3,367		477		29,225		28,872			484			479
Other letters of credit(d)	3,596		305		36		101		4,038		4,388			38			37
Total wholesale(c)	127,476		212,651		176,363		25,070		541,560		536,786			3,217			3,313
Total lending-related	$	1,138,174	$	220,016	$	181,409	$	36,877	$	1,576,476	$	1,497,847		$	3,835		$	4,139
Other guarantees and commitments
Securities lending indemnification agreements and guarantees(e)	$	334,224	$	—	$	—	$	—	$	334,224	$	283,664		$	—		$	—
Derivatives qualifying as guarantees	1,554		327		10,311		40,957		53,149		54,562			67			89
Unsettled resale and securities borrowed agreements	153,695		267		—		—		153,962		95,106			2			—
Unsettled repurchase and securities loaned agreements	94,694		568		—		—		95,262		60,724			(3)			—
Loan sale and securitization-related indemnifications:
Mortgage repurchase liability	NA		NA		NA		NA		NA		NA			45			76
Loans sold with recourse	NA		NA		NA		NA		961		803			21			24
Exchange & clearing house guarantees and commitments(f)	268,646		—		—		—		268,646		265,887			—			—
Other guarantees and commitments(g)	10,837		742		267		833		12,679		15,074			29			38

(a)Includes certain commitments to purchase loans from correspondents.

(b)Also includes commercial card lending-related commitments primarily in CIB.

(c)Predominantly all consumer and wholesale lending-related commitments are in the U.S.

(d)As of September 30, 2024 and December 31, 2023, reflected the contractual amount net of risk participations totaling $94 million and $88 million, respectively, for other unfunded commitments to extend credit; $9.6 billion and $8.2 billion, respectively, for standby letters of credit and other financial guarantees; $548 million and $589 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.

(e)As of September 30, 2024 and December 31, 2023, collateral held by the Firm in support of securities lending indemnification agreements was $355.7 billion and $300.3 billion, respectively. Securities lending collateral primarily consists of cash, G7 government securities, and securities issued by U.S. GSEs and government agencies.

(f)As of September 30, 2024 and December 31, 2023, includes guarantees to the Fixed Income Clearing Corporation under the sponsored member repo program and commitments and guarantees associated with the Firm’s membership in certain clearing houses.

(g)As of September 30, 2024 and December 31, 2023, primarily includes unfunded commitments to purchase secondary market loans, other equity investment commitments, and unfunded commitments related to certain tax-oriented equity investments, and reflects the impact of adopting updates to the Accounting for Investments in Tax Credit Structures guidance effective January 1, 2024.

(h)For lending-related products, the carrying value includes the allowance for lending-related commitments and the guarantee liability; for derivative-related products, and lending-related commitments for which the fair value option was elected, the carrying value represents the fair value.

(i)For lending-related commitments, the carrying value also includes fees and any purchase discounts or premiums that are deferred and recognized in accounts payable and other liabilities on the Consolidated balance sheets. Deferred amounts for revolving commitments and commitments not expected to fund, are amortized to lending- and deposit-related fees on a straight line basis over the commitment period. For all other commitments the deferred amounts remain deferred until the commitment funds or is sold.

(j)As of September 30, 2024 and December 31, 2023, includes fair value adjustments associated with First Republic for residential real estate lending-related commitments totaling $505 million and $630 million, respectively, for auto and other lending-related commitments totaling $55 million and $148 million, respectively, and for other unfunded commitments to extend credit totaling $769 million and $1.1 billion, respectively. Refer to Note 26 for additional information.

Other unfunded commitments to extend credit

Other unfunded commitments to extend credit generally consist of commitments for working capital and general corporate purposes, extensions of credit to support commercial paper facilities and bond financings in the event that those obligations cannot be remarketed to new investors, as well as committed liquidity facilities to clearing organizations. The Firm also issues commitments under multipurpose facilities which could be drawn upon in several forms, including the issuance of a standby letter of credit.

Standby letters of credit and other financial guarantees

Standby letters of credit and other financial guarantees are conditional lending commitments issued by the Firm to guarantee the performance of a client or customer to a third party under certain arrangements, such as commercial paper facilities, bond financings, acquisition financings, trade financings and similar transactions.

The following table summarizes the contractual amount and carrying value of standby letters of credit and other financial guarantees and other letters of credit arrangements as of September 30, 2024 and December 31, 2023.

Standby letters of credit, other financial guarantees and other letters of credit


	September 30, 2024				December 31, 2023
(in millions)	Standby letters of credit and other financial guarantees		Other letters of credit		Standby letters of credit and other financial guarantees		Other letters of credit
Investment-grade(a)	$	20,602	$	3,128	$	19,694	$	3,552
Noninvestment-grade(a)	8,623		910		9,178		836
Total contractual amount	$	29,225	$	4,038	$	28,872	$	4,388

Allowance for lending-related commitments	$	102	$	38	$	110	$	37
Guarantee liability	382		—		369		—
Total carrying value	$	484	$	38	$	479	$	37
Commitments with collateral	$	16,305	$	384	$	16,861	$	539

(a)The ratings scale is based on the Firm’s internal risk ratings. Refer to Note 11 for further information on internal risk ratings.

Derivatives qualifying as guarantees

The Firm transacts in certain derivative contracts that have the characteristics of a guarantee under U.S. GAAP. Refer to Note 28 of JPMorgan Chase’s 2023 Form 10-K for further information on these derivatives.

The following table summarizes the derivatives qualifying as guarantees as of September 30, 2024 and December 31, 2023.


(in millions)	September 30, 2024		December 31, 2023

Notional amounts
Derivative guarantees	$	53,149	$	54,562
Stable value contracts with contractually limited exposure	32,548		32,488
Maximum exposure of stable value contracts with contractually limited exposure	1,660		1,652

Fair value
Derivative payables	67		89

In addition to derivative contracts that meet the characteristics of a guarantee, the Firm is both a purchaser and seller of credit protection in the credit derivatives market. Refer to Note 4 for a further discussion of credit derivatives.

Loan sales- and securitization-related indemnifications

In connection with the Firm’s mortgage loan sale and securitization activities with U.S. GSEs the Firm has made representations and warranties that the loans sold meet certain requirements, and that may require the Firm to repurchase mortgage loans and/or indemnify the loan purchaser if such representations and warranties are breached by the Firm.

The liability related to repurchase demands associated with private label securitizations is separately evaluated by the Firm in establishing its litigation reserves. Refer to Note 24 of this Form 10-Q and Note 30 of JPMorgan Chase’s 2023 Form 10-K for additional information regarding litigation.

Merchant charge-backs

Under the rules of payment networks, in its role as a merchant acquirer, the Firm's Merchant Services business in CIB Payments, retains a contingent liability for disputed processed credit and debit card transactions that result in a charge-back to the merchant. If a dispute is resolved in the cardholder’s favor, the Firm will (through the cardholder’s issuing bank) credit or refund the amount to the cardholder and will charge back the transaction to the merchant. If the Firm is unable to collect the amount from the merchant, the Firm will bear the loss for the amount credited or refunded to the cardholder. The Firm mitigates this risk by withholding future settlements, retaining cash reserve accounts or obtaining other collateral. In addition, the Firm recognizes a valuation allowance that covers the payment or performance risk related to charge-backs.