# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

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

the	Securities	Exchange	Act	of	1934

# For	the	fiscal	year	ended

# JPMorgan	Chase	&	Co.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	other	jurisdiction	of incorporation	or	organization)

270	Park	Avenue,	New	York,	New	York

(Address	of	principal	executive	offices)

# Commission	file

(I.R.S.	employer identification	no.)

(Zip	code)

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

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

# Title	of	each	class

Common	stock

Name	of	each	exchange	on	which	registered

The	New	York	Stock	Exchange

The	London	Stock	Exchange

Warrants,	each	to	purchase	one	share	of	Common	Stock The	New	York	Stock	Exchange

Depositary	Shares,	each	representing	a	one-four	hundredth	interest	in	a	share	of	5.50%	Non-Cumulative	Preferred	Stock,	Series	O The	New	York	Stock	Exchange

Depositary	Shares,	each	representing	a	one-four	hundredth	interest	in	a	share	of	5.45%	Non-Cumulative	Preferred	Stock,	Series	P The	New	York	Stock	Exchange

Depositary	Shares,	each	representing	a	one-four	hundredth	interest	in	a	share	of	6.70%	Non-Cumulative	Preferred	Stock,	Series	T The	New	York	Stock	Exchange

Depositary	Shares,	each	representing	a	one-four	hundredth	interest	in	a	share	of	6.30%	Non-Cumulative	Preferred	Stock,	Series	W The	New	York	Stock	Exchange

Depositary	Shares,	each	representing	a	one-four	hundredth	interest	in	a	share	of	6.125%	Non-Cumulative	Preferred	Stock,	Series	Y The	New	York	Stock	Exchange

Depositary	Shares,	each	representing	a	one-four	hundredth	interest	in	a	share	of	6.10%	Non-Cumulative	Preferred	Stock,	Series	AA The	New	York	Stock	Exchange

Depositary	Shares,	each	representing	a	one-four	hundredth	interest	in	a	share	of	6.15%	Non-Cumulative	Preferred	Stock,	Series	BB The	New	York	Stock	Exchange

Alerian	MLP	Index	ETNs	due	May	24,	2024 NYSE	Arca,	Inc.

Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.	o	Yes	x	No

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.	o	Yes	x	No

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant

was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.	x	Yes	o	No

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Website,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted	pursuant	to	Rule	405	of	Regulation	S-T	(§

232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such	files).	x	Yes	o	No

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§229.405	of	this	chapter)	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's	knowledge,	in	definitive	proxy or	information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.	¨

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

x	Large	accelerated	filer o	Accelerated	filer

o	Non-accelerated	filer

o	Smaller	reporting	company

(Do	not	check	if	a	smaller	reporting	company)

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

Documents	incorporated	by	reference:	Portions	of	the	registrant's	Proxy	Statement	for	the	annual	meeting	of	stockholders	to	be	held	on	May	17,	2016,	are	incorporated	by	reference	in	this	Form	10-K	in	response	to	Items	10,	11, 12,	13	and	14	of	Part	III.

# Form	10-K	Index

# Part	I

# ITEM	1:	BUSINESS

# Overview

JPMorgan	Chase	&	Co.,	("JPMorgan	Chase"	or	the	"Firm")	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	$2.4	trillion	in	assets and	$247.6	billion	in	stockholders'	equity	as	of	December	31,	2015.	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.

The	Firm's	website	is	www.jpmorganchase.com.	JPMorgan	Chase	makes available	free	of	charge,	through	its	website,	annual	reports	on	Form	10-K, quarterly	reports	on	Form	10-Q	and	current	reports	on	Form	8-K	pursuant	to Section	13(a)	or	Section	15(d)	of	the	Securities	Exchange	Act	of	1934,	as	soon	as reasonably	practicable	after	it	electronically	files	such	material	with,	or	furnishes such	material	to,	the	U.S.	Securities	and	Exchange	Commission	(the	"SEC").	The Firm	has	adopted,	and	posted	on	its	website,	a	Code	of	Conduct	for	all employees	of	the	Firm	and	a	Code	of	Ethics	for	its	Chairman	and	Chief Executive	Officer,	Chief	Financial	Officer,	Chief	Accounting	Officer	and	all other	professionals	of	the	Firm	worldwide	serving	in	a	finance,	accounting,	tax or	investor	relations	role.

# Business	segments

JPMorgan	Chase's	activities	are	organized,	for	management	reporting	purposes, 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	Management	("AM").

A	description	of	the	Firm's	business	segments	and	the	products	and	services	they provide	to	their	respective	client	bases	is	provided	in	the	"Business	segment results"	section	of	Management's	discussion	and	analysis	of	financial	condition and	results	of	operations	("MD&A"),	beginning	on	page	68	and	in	Note	33.

# Competition

JPMorgan	Chase	and	its	subsidiaries	and	affiliates	operate	in	a	highly competitive	environment.	Competitors	include	other	banks,	brokerage	firms, investment	banking	companies,	merchant	banks,	hedge	funds,	commodity trading	companies,	private	equity	firms,	insurance	companies,	mutual	fund companies,	investment	managers,	credit	card	companies,	mortgage	banking companies,	trust	companies,	securities	processing	companies,	automobile financing	companies,	leasing	companies,	e-commerce	and	other	Internet-based companies,	financial	technology	companies,	and	other	companies	engaged	in providing	similar	products	and	services.	The	Firm's	businesses	generally compete	on	the	basis	of	the	quality	and	variety	of	the	Firm's	products	and services,	transaction	execution,	innovation,	reputation	and	price.	Competition also	varies	based	on	the	types	of	clients,	customers,	industries	and	geographies served.	With	respect	to	some	of	its	geographies	and	products,	JPMorgan	Chase competes	globally;	with	respect	to	others,	the	Firm	competes	on	a	national	or regional	basis.	The	Firm's	ability	to	compete	also	depends	on	its	ability	to	attract and	retain	professional	and	other	personnel,	and	on	its	reputation.

It	is	likely	that	competition	in	the	financial	services	industry	will	become	even more	intense	as	the	Firm's	businesses	continue	to	compete	with	other	financial institutions	that	may	have	a	stronger	local	presence	in	certain	geographies	or	that operate	under	different	rules	and	regulatory	regimes	than	the	Firm,	or	with companies	that	provide	new	or	innovative	products	or	services	that	the	Firm	is unable	to	provide.

# Supervision	and	regulation

The	Firm	is	subject	to	regulation	under	state	and	federal	laws	in	the	U.S.,	as	well as	the	applicable	laws	of	each	of	the	various	jurisdictions	outside	the	U.S.	in which	the	Firm	does	business.

As	a	result	of	regulatory	reforms	enacted	and	proposed	in	the	U.S.	and	abroad, the	Firm	has	been	experiencing	a	period	of	significant	change	in	regulation which	has	had	and	could	continue	to	have	significant	consequences	for	how	the Firm	conducts	business.	The	Firm	continues	to	work	diligently	in	assessing	the regulatory	changes	it	is	facing,	and	is	devoting	substantial	resources	to	comply with	all	the	new	regulations,	while,	at	the	same	time,	endeavoring	to	best	meet the	needs	and	expectations	of	its	customers,	clients	and	shareholders.	These efforts	include	the	implementation	of	new	policies,	procedures	and	controls,	and appropriate	adjustments	to	the	Firm's	business	and	operations,	legal	entity structure	and	capital	and	liquidity

management.	The	combined	effect	of	numerous	rule-makings	by	multiple governmental	agencies	and	regulators,	and	the	potential	conflicts	or inconsistencies	among	such	rules,	present	challenges	and	risks	to	the	Firm's business	and	operations.	Given	the	current	status	of	the	regulatory	developments, the	Firm	cannot	currently	quantify	all	of	the	possible	effects	on	its	business	and operations	of	the	significant	changes	that	are	underway.	For	more	information, see	Risk	Factors	on	pages	8–18.

# Financial	holding	company:

# Consolidated	supervision	by	the	Board	of	Governors	of	the	Federal	Reserve

System	(the	"Federal	Reserve").	As	a	bank	holding	company	("BHC")	and	a financial	holding	company,	JPMorgan	Chase	is	subject	to	comprehensive consolidated	supervision,	regulation	and	examination	by	the	Federal	Reserve. The	Federal	Reserve	acts	as	an	"umbrella	regulator"	and	certain	of	JPMorgan Chase's	subsidiaries	are	regulated	directly	by	additional	authorities	based	on	the particular	activities	of	those	subsidiaries.	For	example,	JPMorgan	Chase's national	bank	subsidiaries,	such	as	JPMorgan	Chase	Bank,	N.A.,	and	Chase Bank	USA,	N.A.,	are	subject	to	supervision	and	regulation	by	the	Office	of	the Comptroller	of	the	Currency	("OCC")	and,	with	respect	to	certain	matters,	by	the Federal	Reserve	and	the	Federal	Deposit	Insurance	Corporation	(the	"FDIC"). Certain	non-bank	subsidiaries,	such	as	the	Firm's	U.S.	broker-dealers,	are	subject to	supervision	and	regulation	by	the	SEC,	and	subsidiaries	of	the	Firm	that engage	in	certain	futures-related	and	swaps-related	activities	are	subject	to supervision	and	regulation	by	the	Commodity	Futures	Trading	Commission ("CFTC").	See	Securities	and	broker-dealer	regulation,	Investment	management regulation	and	Derivatives	regulation	below.	In	addition,	the	Firm's	consumer activities	are	subject	to	supervision	and	regulation	by	the	Consumer	Financial Protection	Bureau	("CFPB")	and	to	regulation	under	various	state	statutes	which are	enforced	by	the	respective	state's	Attorney	General.

Scope	of	permissible	business	activities.	The	Bank	Holding	Company	Act generally	restricts	BHCs	from	engaging	in	business	activities	other	than	the business	of	banking	and	certain	closely	related	activities.	Financial	holding companies	generally	can	engage	in	a	broader	range	of	financial	activities	than are	otherwise	permissible	for	BHCs,	including	underwriting,	dealing	and	making markets	in	securities,	and	making	merchant	banking	investments	in	non-financial companies.	The	Federal	Reserve	has	the	authority	to	limit	a	financial	holding company's	ability	to	conduct	activities	that	would	otherwise	be	permissible	if	the financial	holding	company	or	any	of	its	depositary	institution	subsidiaries	ceases to	meet	the	applicable	eligibility	requirements	(including	requirements	that	the financial	holding	company	and	each	of	its	U.S.	depository	institution	subsidiaries maintain	their	status	as	"well-capitalized"	and	"well-managed").	The	Federal Reserve	may	also	impose	corrective	capital	and/or	managerial	requirements	on the	financial	holding	company	and	may,	for	example,	require	divestiture	of	the holding	company's

depository	institutions	if	the	deficiencies	persist.	Federal	regulations	also	provide that	if	any	depository	institution	controlled	by	a	financial	holding	company	fails to	maintain	a	satisfactory	rating	under	the	Community	Reinvestment	Act,	the Federal	Reserve	must	prohibit	the	financial	holding	company	and	its	subsidiaries from	engaging	in	any	activities	other	than	those	permissible	for	bank	holding companies.	In	addition,	a	financial	holding	company	must	obtain	Federal Reserve	approval	before	engaging	in	certain	banking	and	other	financial activities	both	in	the	U.S.	and	internationally,	as	further	described	under Regulation	of	acquisitions	below.

Activities	restrictions	under	the	Volcker	Rule.	Section	619	of	the	Wall	Street Reform	and	Consumer	Protection	Act	(the	"Dodd-Frank	Act")	(the	"Volcker Rule")	prohibits	banking	entities,	including	the	Firm,	from	engaging	in	certain "proprietary	trading"	activities,	subject	to	exceptions	for	underwriting,	market- making,	risk-mitigating	hedging	and	certain	other	activities.	In	addition,	the Volcker	Rule	limits	the	sponsorship	of,	and	investment	in,	"covered	funds"	(as defined	by	the	Volcker	Rule)	and	imposes	limits	on	certain	transactions	between the	Firm	and	its	sponsored	funds	(see	JPMorgan	Chase's	subsidiary	banks	— Restrictions	on	transactions	with	affiliates	below).	The	Volcker	Rule,	which became	effective	in	July	2015,	requires	banking	entities	to	establish comprehensive	compliance	programs	reasonably	designed	to	help	ensure	and monitor	compliance	with	the	restrictions	under	the	Volcker	Rule,	including,	in order	to	distinguish	permissible	from	impermissible	risk-taking	activities,	the measurement,	monitoring	and	reporting	of	certain	key	metrics.	Given	the uncertainty	and	complexity	of	the	Volcker	Rule's	framework,	the	full	impact	of the	Volcker	Rule	will	ultimately	depend	on	its	ongoing	interpretation	by	the	five regulatory	agencies	responsible	for	its	oversight.

Capital	and	liquidity	requirements.	The	Federal	Reserve	establishes	capital	and leverage	requirements	for	the	Firm	and	evaluates	its	compliance	with	such requirements.	The	OCC	establishes	similar	capital	and	leverage	requirements	for the	Firm's	national	banking	subsidiaries.	For	more	information	about	the applicable	requirements	relating	to	risk-based	capital	and	leverage	in	the	U.S. under	the	most	recent	capital	framework	established	by	the	Basel	Committee	on Banking	Supervision	(the	"Basel	Committee")("Basel	III"),	see	Capital Management	on	pages	149–158	and	Note	28.	Under	Basel	III,	bank	holding companies	and	banks	are	required	to	measure	their	liquidity	against	two	specific liquidity	tests:	the	liquidity	coverage	ratio	("LCR")	and	the	net	stable	funding ratio	("NSFR").	The	U.S.	banking	regulators	have	approved	the	final	LCR	rule ("U.S.	LCR"),	which	became	effective	on	January	1,	2015.	A	proposed	U.S.	rule for	NSFR	is	expected.	For	additional	information	on	these	ratios,	see	Liquidity Risk	Management	on	pages	159–164.	It	is	likely	that	the	banking	supervisors will	continue	to	refine	and	enhance	the	Basel	III	capital	framework	for	financial institutions.	The	Basel	Committee	recently	finalized	revisions	to	market	risk capital	for	trading	books;	other	proposals	being	contemplated	by	the	Basel Committee	include	revisions	to,	among	others,	standardized	credit	and operational	risk	capital	frameworks	and	revisions

to	the	securitization	framework.	After	a	proposal	is	finalized	by	the	Basel Committee,	U.S.	banking	regulators	would	then	need	to	propose	requirements applicable	to	U.S.	financial	institutions.

Stress	tests.	The	Federal	Reserve	has	adopted	supervisory	stress	tests	for	large bank	holding	companies,	including	JPMorgan	Chase,	which	form	part	of	the Federal	Reserve's	annual	Comprehensive	Capital	Analysis	and	Review ("CCAR")	framework.	Under	the	framework,	the	Firm	must	conduct	semi- annual	company-run	stress	tests	and,	in	addition,	must	submit	an	annual	capital plan	to	the	Federal	Reserve,	taking	into	account	the	results	of	separate	stress	tests designed	by	the	Firm	and	the	Federal	Reserve.	In	reviewing	the	Firm's	capital plan,	the	Federal	Reserve	considers	both	quantitative	and	qualitative	factors. Qualitative	assessments	include	(among	other	things)	the	comprehensiveness	of the	plan,	the	assumptions	and	analysis	underlying	the	plan,	and	the	extent	to which	the	Firm	has	satisfied	certain	supervisory	matters	related	to	the	Firm's processes	and	analyses,	including	the	design	and	operational	effectiveness	of	the controls	governing	such	processes.	Moreover,	the	Firm	is	required	to	receive	a notice	of	non-objection	from	the	Federal	Reserve	before	taking	capital	actions, such	as	paying	dividends,	implementing	common	equity	repurchase	programs	or redeeming	or	repurchasing	capital	instruments.	The	OCC	requires	JPMorgan Chase	Bank,	N.A.	to	perform	separate,	similar	annual	stress	tests.	The	Firm publishes	each	year	the	results	of	its	mid-cycle	stress	tests	under	the	Firm's internally-developed	"severely	adverse"	scenario	and	the	results	of	its	(and	its two	primary	subsidiary	banks')	annual	stress	tests	under	the	supervisory "severely	adverse"	scenarios	provided	by	the	Federal	Reserve	and	the	OCC. Commencing	with	the	2016	CCAR,	the	annual	CCAR	submission	will	be	due	on April	5.	Results	will	be	published	by	the	Federal	Reserve	by	June	30,	with disclosures	of	results	by	BHCs,	including	the	Firm,	to	follow	within	15	days. Also	commencing	in	2016,	the	mid-cycle	capital	stress	test	submissions	will	be due	on	October	5	and	BHCs,	including	the	Firm,	will	publish	results	by November	4.	The	Federal	Reserve	has	indicated	that	it	is	currently	evaluating	the inclusion	of	all	or	part	of	the	global	systemically	important	bank	("GSIB") surcharge	into	the	2017	CCAR	test	and	the	Firm	is	currently	awaiting	further guidance.	For	additional	information	on	the	Firm's	CCAR,	see	Capital Management	on	pages	149–158.

Enhanced	prudential	standards.	The	Financial	Stability	Oversight	Council ("FSOC"),	among	other	things,	recommends	prudential	standards	and	reporting and	disclosure	requirements	to	the	Federal	Reserve	for	systemically	important financial	institutions,	such	as	JPMorgan	Chase.	The	Federal	Reserve	has	adopted several	rules	to	implement	the	heightened	prudential	standards,	including	final rules	relating	to	risk	management	and	corporate	governance	of	subject	BHCs. BHCs	with	$50	billion	or	more	in	total	consolidated	assets	are	required	to comply	with	enhanced	liquidity	and	overall	risk

management	standards,	including	a	buffer	of	highly	liquid	assets	based	on projected	funding	needs	for	30	days,	and	their	board	of	directors	is	required	to conduct	appropriate	oversight	of	their	risk	management	activities.	For information	on	liquidity	measures,	see	Liquidity	Risk	Management	on	pages 159–164.	Several	additional	proposed	rules	are	still	being	considered,	including rules	relating	to	single-counterparty	credit	limits	and	an	"early	remediation" framework	to	address	financial	distress	or	material	management	weaknesses.

Risk	reporting.	In	January	2013,	the	Basel	Committee	issued	new	regulations relating	to	risk	aggregation	and	reporting.	Under	these	regulations,	the	banking institution's	risk	governance	framework	must	encompass	risk-data	aggregation and	reporting,	and	data	aggregation	must	be	highly	automated	and	allow	for minimal	manual	intervention.	The	regulations	also	impose	higher	standards	for the	accuracy,	comprehensiveness,	granularity	and	timely	distribution	of	data reporting,	and	call	for	regular	supervisory	review	of	the	banking	institution's	risk aggregation	and	reporting.	These	new	standards	became	effective	for	GSIBs, including	the	Firm,	on	January	1,	2016.

Orderly	liquidation	authority	and	resolution	and	recovery.	As	a	BHC	with	assets of	$50	billion	or	more,	the	Firm	is	required	to	submit	annually	to	the	Federal Reserve	and	the	FDIC	a	plan	for	resolution	under	the	Bankruptcy	Code	in	the event	of	material	distress	or	failure	(a	"resolution	plan").	The	FDIC	also	requires each	insured	depositary	institution	with	$50	billion	or	more	in	assets,	such	as JPMorgan	Chase	Bank,	N.A.	and	Chase	Bank	USA,	N.A.,	to	provide	a	resolution plan.	For	more	information	about	the	Firm's	resolution	plan,	see	Risk	Factors	on pages	8–18.	In	addition,	certain	financial	companies,	including	JPMorgan	Chase and	certain	of	its	subsidiaries,	can	be	subjected	to	resolution	under	an	"orderly liquidation	authority."	The	U.S.	Treasury	Secretary,	in	consultation	with	the President	of	the	United	States,	must	first	make	certain	extraordinary	financial distress	and	systemic	risk	determinations,	and	action	must	be	recommended	by the	FDIC	and	the	Federal	Reserve.	Absent	such	actions,	the	Firm,	as	a	BHC, would	remain	subject	to	resolution	under	the	Bankruptcy	Code.	In	December 2013,	the	FDIC	issued	a	draft	policy	statement	describing	its	"single	point	of entry"	strategy	for	resolution	of	systemically	important	financial	institutions under	the	orderly	liquidation	authority.	This	strategy	seeks	to	keep	operating subsidiaries	of	the	BHC	open	and	impose	losses	on	shareholders	and	creditors	of the	holding	company	in	receivership	according	to	their	statutory	order	of	priority.

The	Firm	has	a	comprehensive	recovery	plan	detailing	the	actions	it	would	take to	avoid	failure	by	remaining	well-capitalized	and	well-funded	in	the	case	of	an adverse	event.	JPMorgan	Chase	has	provided	the	Federal	Reserve	with comprehensive	confidential	supervisory	information	and	analyses	about	the Firm's	businesses,	legal	entities	and	corporate	governance	and	about	its	crisis management	governance,	capabilities	and	available	alternatives	to	raise	liquidity and	capital	in	severe	market	circumstances.	The

OCC	has	published	for	comment	proposed	guidelines	establishing	standards	for recovery	planning	by	insured	national	banks,	including	JPMorgan	Chase	Bank, N.A.	and	Chase	Bank	USA,	N.A.

Regulators	in	the	U.S.	and	abroad	continue	to	be	focused	on	developing measures	designed	to	address	the	possibility	or	perception	that	large	financial institutions,	including	the	Firm,	may	be	"too	big	to	fail,"	and	to	provide safeguards	so	that,	if	a	large	financial	institution	does	fail,	it	can	be	resolved without	the	use	of	public	funds.	Higher	capital	surcharges	on	GSIBs, requirements	for	certain	large	bank	holding	companies	to	maintain	a	minimum amount	of	long-term	debt	to	facilitate	orderly	resolution	of	those	firms,	and	the International	Swaps	and	Derivatives	Association	("ISDA")	protocol	relating	to the	"close-out"	of	derivatives	transactions	during	the	resolution	of	a	large	cross- border	financial	institution,	are	examples	of	initiatives	to	address	"too	big	to fail."	For	further	information	on	the	potential	impact	of	the	GSIB	framework	and Total	Loss	Absorbing	Capacity	("TLAC"),	see	Capital	Management	on	pages 149–158	and	Risk	Factors	on	pages	8–18,	and	on	the	ISDA	close-out	protocol, see	Derivatives	regulation	below.

Holding	company	as	source	of	strength	for	bank	subsidiaries.	JPMorgan	Chase &	Co.	is	required	to	serve	as	a	source	of	financial	strength	for	its	depository institution	subsidiaries	and	to	commit	resources	to	support	those	subsidiaries. This	support	may	be	required	by	the	Federal	Reserve	at	times	when	the	Firm might	otherwise	determine	not	to	provide	it.

Regulation	of	acquisitions.	Acquisitions	by	bank	holding	companies	and	their banks	are	subject	to	multiple	requirements	by	the	Federal	Reserve	and	the	OCC. For	example,	financial	holding	companies	and	bank	holding	companies	are required	to	obtain	the	approval	of	the	Federal	Reserve	before	they	may	acquire more	than	5%	of	the	voting	shares	of	an	unaffiliated	bank.	In	addition, acquisitions	by	financial	companies	are	prohibited	if,	as	a	result	of	the acquisition,	the	total	liabilities	of	the	financial	company	would	exceed	10%	of the	total	liabilities	of	all	financial	companies.	In	contrast,	because	the	liabilities of	non-U.S.	financial	companies	are	calculated	differently	under	this	rule,	a	non- U.S.	financial	company	could	hold	significantly	more	than	10%	of	the	U.S. market	without	exceeding	the	concentration	limit.	In	addition,	for	certain acquisitions,	the	Firm	must	provide	written	notice	to	the	Federal	Reserve	prior	to acquiring	direct	or	indirect	ownership	or	control	of	any	voting	shares	of	any company	with	over	$10	billion	in	assets	that	is	engaged	in	activities	that	are "financial	in	nature".

# JPMorgan	Chase's	subsidiary	banks:

The	Firm's	two	primary	subsidiary	banks,	JPMorgan	Chase	Bank,	N.A.	and Chase	Bank	USA,	N.A.,	are	FDIC-insured	national	banks	regulated	by	the	OCC. As	national	banks,	the	activities	of	JPMorgan	Chase	Bank,	N.A.	and	Chase	Bank USA,	N.A.	are	limited	to	those	specifically	authorized	under	the	National	Bank Act	and	related	interpretations	by	the	OCC.

FDIC	deposit	insurance.	The	FDIC	deposit	insurance	fund	provides	insurance coverage	for	certain	deposits,	which	is	funded	through	assessments	on	banks, such	as	JPMorgan	Chase	Bank,	N.A.	and	Chase	Bank	USA,	N.A.	Changes	in	the methodology	used	to	calculate	such	assessments,	resulting	from	the	enactment	of the	Dodd-Frank	Act,	significantly	increased	the	assessments	that	the	Firm's	bank subsidiaries	pay	annually	to	the	FDIC.	In	October	2015,	the	FDIC	proposed	a new	assessment	surcharge	on	insured	depository	institutions	with	total consolidated	assets	greater	than	$10	billion	in	order	to	raise	the	reserve	ratio	for the	FDIC	deposit	insurance	fund.	Future	FDIC	rule-making	could	further increase	such	assessments.

FDIC	powers	upon	a	bank	insolvency.	Upon	the	insolvency	of	an	insured depository	institution,	such	as	JPMorgan	Chase	Bank,	N.A.,	the	FDIC	may	be appointed	as	the	conservator	or	receiver	under	the	Federal	Deposit	Insurance	Act ("FDIA").	In	addition,	where	a	systemically	important	financial	institution,	such as	JPMorgan	Chase	&	Co.,	is	"in	default"	or	"in	danger	of	default",	the	FDIC may	be	appointed	as	receiver	in	order	to	conduct	an	orderly	liquidation.	In	both cases,	the	FDIC	has	broad	powers	to	transfer	any	assets	and	liabilities	without the	approval	of	the	institution's	creditors.

Cross-guarantee.	An	FDIC-insured	depository	institution	can	be	held	liable	for any	loss	incurred	or	expected	to	be	incurred	by	the	FDIC	if	another	FDIC- insured	institution	that	is	under	common	control	with	such	institution	is	in default	or	is	deemed	to	be	"in	danger	of	default"	(commonly	referred	to	as "cross-guarantee"	liability).	An	FDIC	cross-guarantee	claim	against	a	depository institution	is	generally	superior	in	right	of	payment	to	claims	of	the	holding company	and	its	affiliates	against	such	depository	institution.

Prompt	corrective	action	and	early	remediation.	The	Federal	Deposit	Insurance Corporation	Improvement	Act	of	1991	requires	the	relevant	federal	banking regulator	to	take	"prompt	corrective	action"	with	respect	to	a	depository institution	if	that	institution	does	not	meet	certain	capital	adequacy	standards. While	these	regulations	apply	only	to	banks,	such	as	JPMorgan	Chase	Bank, N.A.	and	Chase	Bank	USA,	N.A.,	the	Federal	Reserve	is	authorized	to	take appropriate	action	against	the	parent	BHC,	such	as	JPMorgan	Chase	&	Co., based	on	the	undercapitalized	status	of	any	bank	subsidiary.	In	certain	instances, the	BHC	would	be	required	to	guarantee	the	performance	of	the	capital restoration	plan	for	its	undercapitalized	subsidiary.

OCC	Heightened	Standards.	The	OCC	has	issued	final	regulations	and guidelines	establishing	heightened	standards	for	large	banks.	The	guidelines establish	minimum	standards	for	the	design	and	implementation	of	a	risk governance	framework	for	banks.	While	the	bank	may	use	certain	components	of the	parent	company's	risk	governance	framework,	the	framework	must	ensure that	the	bank's	risk	profile	is	easily	distinguished	and	separate	from	the	parent for	risk	management	purposes.	The	bank's	board	or	risk	committee	is responsible	for	approving	the

bank's	risk	governance	framework,	providing	active	oversight	of	the	bank's	risk- taking	activities	and	holding	management	accountable	for	adhering	to	the	risk governance	framework.

Restrictions	on	transactions	with	affiliates.	The	bank	subsidiaries	of	JPMorgan Chase	(including	subsidiaries	of	those	banks)	are	subject	to	certain	restrictions imposed	by	federal	law	on	extensions	of	credit	to,	investments	in	stock	or securities	of,	and	derivatives,	securities	lending	and	certain	other	transactions with,	JPMorgan	Chase	&	Co.	and	certain	other	affiliates.	These	restrictions prevent	JPMorgan	Chase	&	Co.	and	other	affiliates	from	borrowing	from	such subsidiaries	unless	the	loans	are	secured	in	specified	amounts	and	comply	with certain	other	requirements.	For	more	information,	see	Note	27.	In	addition,	the Volcker	Rule	imposes	a	prohibition	on	such	transactions	between	any	JPMorgan Chase	entity	and	covered	funds	for	which	a	JPMorgan	Chase	entity	serves	as	the investment	manager,	investment	advisor,	commodity	trading	advisor	or	sponsor, as	well	as,	subject	to	a	limited	exception,	any	covered	fund	controlled	by	such funds.

Dividend	restrictions.	Federal	law	imposes	limitations	on	the	payment	of dividends	by	national	banks,	such	as	JPMorgan	Chase	Bank,	N.A.	and	Chase Bank	USA,	N.A.	See	Note	27	for	the	amount	of	dividends	that	the	Firm's principal	bank	subsidiaries	could	pay,	at	January	1,	2016,	to	their	respective bank	holding	companies	without	the	approval	of	their	banking	regulators.

In	addition	to	the	dividend	restrictions	described	above,	the	OCC	and	the	Federal Reserve	have	authority	to	prohibit	or	limit	the	payment	of	dividends	of	the	bank subsidiaries	they	supervise,	if,	in	the	banking	regulator's	opinion,	payment	of	a dividend	would	constitute	an	unsafe	or	unsound	practice	in	light	of	the	financial condition	of	the	bank.

Depositor	preference.	Under	federal	law,	the	claims	of	a	receiver	of	an	insured depository	institution	for	administrative	expense	and	the	claims	of	holders	of U.S.	deposit	liabilities	(including	the	FDIC)	have	priority	over	the	claims	of other	unsecured	creditors	of	the	institution,	including	public	noteholders	and depositors	in	non-U.S.	offices.	As	a	result,	such	persons	could	receive substantially	less	than	the	depositors	in	U.S.	offices	of	the	depository	institution. The	U.K.	Prudential	Regulation	Authority	(the	"PRA"),	a	subsidiary	of	the	Bank of	England	which	has	responsibility	for	prudential	regulation	of	banks	and	other systemically	important	institutions,	has	issued	a	proposal	that	may	require	the Firm	to	either	obtain	equal	treatment	for	U.K.	depositors	or	"subsidiarize"	in	the U.K.	In	September	2013,	the	FDIC	issued	a	final	rule	which	clarifies	that	foreign deposits	are	considered	deposits	under	the	FDIA	if	they	are	payable	in	the	U.S. as	well	as	in	the	foreign	branch.

CFPB	regulation	and	supervision,	and	other	consumer	regulations.	JPMorgan Chase	and	its	national	bank	subsidiaries,	including	JPMorgan	Chase	Bank,	N.A. and	Chase	Bank	USA,	N.A.,	are	subject	to	supervision	and	regulation	by	the CFPB	with	respect	to	federal	consumer

protection	laws,	including	laws	relating	to	fair	lending	and	the	prohibition	of unfair,	deceptive	or	abusive	acts	or	practices	in	connection	with	the	offer,	sale	or provision	of	consumer	financial	products	and	services.	These	laws	include	the Truth-in-Lending,	Equal	Credit	Opportunity	("ECOA"),	Fair	Credit	Reporting, Fair	Debt	Collection	Practice,	Electronic	Funds	Transfer,	Credit	Card Accountability,	Responsibility	and	Disclosure	("CARD")	and	Home	Mortgage Disclosure	Acts.	The	CFPB	also	has	authority	to	impose	new	disclosure requirements	for	any	consumer	financial	product	or	service.	The	CFPB	has issued	informal	guidance	on	a	variety	of	topics	(such	as	the	collection	of consumer	debts	and	credit	card	marketing	practices)	and	has	taken	enforcement actions	against	certain	financial	institutions.	Much	of	the	CFPB's	initial	rule- making	efforts	have	addressed	mortgage	related	topics,	including	ability	to	repay and	qualified	mortgage	standards,	mortgage	servicing	standards,	loan	originator compensation	standards,	high-cost	mortgage	requirements,	Home	Mortgage Disclosure	Act	requirements,	appraisal	and	escrow	standards	and	requirements for	higher-priced	mortgages.	Other	areas	of	recent	focus	include	pre-authorized electronic	funds	transfers,	"add-on"	products,	matters	involving	consumer populations	considered	vulnerable	by	the	CFPB	(such	as	students),	credit reporting,	and	the	furnishing	of	credit	scores	to	individuals.	The	CFPB	has	been focused	on	automobile	dealer	discretionary	interest	rate	markups,	and	on	holding the	Firm	and	other	purchasers	of	such	contracts	("indirect	lenders")	responsible under	the	ECOA	for	statistical	disparities	in	markups	charged	by	the	dealers	to borrowers	of	different	races	or	ethnicities.	For	information	regarding	a	current investigation	relating	to	indirect	lending	to	automobile	dealers,	see	Note	31.

# Securities	and	broker-dealer	regulation:

The	Firm	conducts	securities	underwriting,	dealing	and	brokerage	activities	in the	U.S.	through	J.P.	Morgan	Securities	LLC	and	other	broker-dealer subsidiaries,	all	of	which	are	subject	to	regulations	of	the	SEC,	the	Financial Industry	Regulatory	Authority	and	the	New	York	Stock	Exchange,	among others.	The	Firm	conducts	similar	securities	activities	outside	the	U.S.	subject	to local	regulatory	requirements.	In	the	U.K.,	those	activities	are	conducted	by	J.P. Morgan	Securities	plc,	which	is	regulated	by	the	PRA	and	by	the	Financial Conduct	Authority	("FCA"),	which	regulates	prudential	matters	for	firms	that	are not	so	regulated	by	the	PRA	and	conduct	matters	for	all	market	participants. Broker-dealers	are	subject	to	laws	and	regulations	covering	all	aspects	of	the securities	business,	including	sales	and	trading	practices,	securities	offerings, publication	of	research	reports,	use	of	customer's	funds,	the	financing	of	clients' purchases,	capital	structure,	record-keeping	and	retention,	and	the	conduct	of their	directors,	officers	and	employees.	For	information	on	the	net	capital	of	J.P. Morgan	Securities	LLC	and	J.P.	Morgan	Clearing	Corp.,	and	the	applicable requirements	relating	to	risk-based	capital	for	J.P.	Morgan	Securities	plc,	see Broker-dealer	regulatory	capital	on	page	158.	Future	rule-making	under

the	Dodd-Frank	Act	and	rules	proposed	by	the	Department	of	Labor	may	impose (among	other	things)	a	new	standard	of	care	applicable	to	broker-dealers	when dealing	with	customers.

# Investment	management	regulation:

The	Firm's	investment	management	business	is	subject	to	significant	regulation in	numerous	jurisdictions	around	the	world	relating	to,	among	other	things,	the safeguarding	of	client	assets,	offerings	of	funds,	marketing	activities,	transactions among	affiliates	and	management	of	client	funds.	Certain	of	the	Firm's subsidiaries	are	registered	with,	and	subject	to	oversight	by,	the	SEC	as investment	advisers.	As	such,	the	Firm's	registered	investment	advisers	are subject	to	the	fiduciary	and	other	obligations	imposed	under	the	Investment Advisers	Act	of	1940	and	the	rules	and	regulations	promulgated	thereunder,	as well	as	various	state	securities	laws.	For	information	regarding	investigations	and litigation	in	connection	with	disclosures	to	clients	related	to	proprietary	products, see	Note	31.

The	Firm's	asset	management	business	continues	to	be	affected	by	ongoing	rule- making.	In	July	2013,	the	SEC	adopted	amendments	to	rules	that	govern	money- market	funds,	requiring	a	floating	net	asset	value	for	institutional	prime	money- market	funds,	effective	October	14,	2016.	As	noted	above,	the	Department	of Labor	has	also	proposed	a	rule	that	would	significantly	expand	the	universe	of persons	viewed	as	investment	fiduciaries	to	retirement	plans	and	IRAs.	In addition,	the	SEC	has	issued	proposed	rules	regarding	enhanced	liquidity	risk management	for	open-end	mutual	funds	and	exchange-traded	funds	("ETFs"); restrictions	on	the	use	of	derivatives	by	mutual	funds,	ETFs	and	closed-end funds;	and	enhanced	reporting	for	funds	and	advisors.

# Derivatives	regulation:

The	Firm	is	subject	to	comprehensive	regulation	of	its	derivatives	businesses. The	regulations	impose	capital	and	margin	requirements,	require	central	clearing of	standardized	over-the-counter	derivatives,	require	that	certain	standardized over-the-counter	swaps	be	traded	on	regulated	trading	venues,	and	provide	for reporting	of	certain	mandated	information.	In	addition,	the	Dodd-Frank	Act requires	the	registration	of	"swap	dealers"	and	"major	swap	participants"	with the	CFTC	and	of	"security-based	swap	dealers"	and	"major	security-based	swap participants"	with	the	SEC.	JPMorgan	Chase	Bank,	N.A.,	J.P.	Morgan	Securities LLC,	J.P.	Morgan	Securities	plc	and	J.P.	Morgan	Ventures	Energy	Corporation have	registered	with	the	CFTC	as	swap	dealers,	and	JPMorgan	Chase	Bank, N.A.,	J.P.	Morgan	Securities	LLC	and	J.P.	Morgan	Securities	plc	will	likely	be required	to	register	with	the	SEC	as	security-based	swap	dealers.	As	a	result	of their	registration	as	swap	dealers	or	security-based	swap	dealers,	these	entities will	be	subject	to	a	new,	comprehensive	regulatory	framework	applicable	to	their swap	or	security-based	swap	activities,	which	includes	capital	requirements, rules	regulating	their	swap	activities,	rules	requiring	the	collateralization	of uncleared	swaps,	rules	regarding	segregation	of

counterparty	collateral,	business	conduct	and	documentation	standards,	record- keeping	and	reporting	obligations,	and	anti-fraud	and	anti-manipulation requirements.	Further,	some	of	the	rules	for	derivatives	apply	extraterritorially	to U.S.	firms	doing	business	with	clients	outside	of	the	U.S.,	as	well	as	to	the overseas	activities	of	non-U.S.	subsidiaries	of	the	Firm	that	either	deal	with	U.S. persons	or	that	are	guaranteed	by	U.S.	subsidiaries	of	the	Firm;	however,	the	full scope	of	the	extra-territorial	impact	of	the	U.S.	swaps	regulation	has	not	been finalized	and	therefore	remains	unclear.	The	effect	of	these	rules	may	require banking	entities,	such	as	the	Firm,	to	modify	the	structure	of	their	derivatives businesses	and	face	increased	operational	and	regulatory	costs.	In	the	European Union	(the	"EU"),	the	implementation	of	the	European	Market	Infrastructure Regulation	("EMIR")	and	the	revision	of	the	Markets	in	Financial	Instruments Directive	("MiFID	II")	will	result	in	comparable,	but	not	identical,	changes	to	the European	regulatory	regime	for	derivatives.	The	combined	effect	of	the	U.S.	and EU	requirements,	and	the	potential	conflicts	and	inconsistencies	between	them, present	challenges	and	risks	to	the	structure	and	operating	model	of	the	Firm's derivatives	businesses.

In	November	2015,	the	Firm	and	other	financial	institutions	agreed	to	adhere	to an	updated	Resolution	Stay	Protocol	developed	by	ISDA	in	response	to	regulator concerns	that	the	close-out	of	derivatives	transactions	during	the	resolution	of	a large	cross-border	financial	institution	could	impede	resolution	efforts	and potentially	destabilize	markets.	The	Resolution	Stay	Protocol	provides	for	the contractual	recognition	of	cross-border	stays	under	various	statutory	resolution regimes	and	a	contractual	stay	on	certain	cross-default	rights.

In	the	U.S.,	two	subsidiaries	of	the	Firm	are	registered	as	futures	commission merchants,	and	other	subsidiaries	are	either	registered	with	the	CFTC	as commodity	pool	operators	and	commodity	trading	advisors	or	exempt	from	such registration.	These	CFTC-registered	subsidiaries	are	also	members	of	the National	Futures	Association.

# Data	regulation:

The	Firm	and	its	subsidiaries	are	subject	to	federal,	state	and	international	laws and	regulations	concerning	the	use	and	protection	of	certain	customer,	employee and	other	personal	and	confidential	information,	including	those	imposed	by	the Gramm-Leach-Bliley	Act	and	the	Fair	Credit	Reporting	Act,	as	well	as	the	EU Data	Protection	Directive.

In	addition,	there	are	numerous	proposals	pending	before	U.S.	and	non-U.S. legislative	and	regulatory	bodies	regarding	privacy	and	data	protection.	For example,	the	European	Parliament	and	the	European	Council	have	reached agreement	on	certain	data	protection	reforms	proposed	by	the	European Commission	which	includes	numerous	operational	requirements,	adds	a requirement	to	notify	individuals	of	data	breaches	and	establishes	enhanced sanctions	for	non-compliance,	including	increased	fines.

# The	Bank	Secrecy	Act	and	Economic	Sanctions:

The	Bank	Secrecy	Act	("BSA")	requires	all	financial	institutions,	including banks	and	securities	broker-dealers,	to,	among	other	things,	establish	a	risk- based	system	of	internal	controls	reasonably	designed	to	prevent	money laundering	and	the	financing	of	terrorism.	The	BSA	includes	a	variety	of	record- keeping	and	reporting	requirements	(such	as	cash	transaction	and	suspicious activity	reporting),	as	well	as	due	diligence/know	your	customer	documentation requirements.	In	January	2013,	the	Firm	entered	into	Consent	Orders	with	its banking	regulators	relating	to	the	Firm's	Bank	Secrecy	Act/Anti-Money Laundering	policies,	procedures	and	controls;	the	Firm	has	taken	significant steps	to	modify	and	enhance	its	processes	and	controls	with	respect	to	its	Anti- Money	Laundering	procedures	and	to	remediate	the	issues	identified	in	the Consent	Order.	The	Firm	is	also	subject	to	the	regulations	and	economic sanctions	programs	administered	by	the	U.S.	Treasury's	Office	of	Foreign	Assets Control	("OFAC").

# Anti-Corruption:

The	Firm	is	subject	to	laws	and	regulations	relating	to	corrupt	and	illegal payments	to	government	officials	and	others	in	the	jurisdictions	in	which	it operates,	including	the	U.S.	Foreign	Corrupt	Practices	Act	and	the	U.K.	Bribery Act.	For	more	information	on	a	current	investigation	relating	to,	among	other things,	the	Firm's	hiring	of	persons	referred	by	government	officials	and	clients, see	Note	31.

# Compensation	practices:

The	Firm's	compensation	practices	are	subject	to	oversight	by	the	Federal Reserve,	as	well	as	other	agencies.	The	Federal	Reserve	has	issued	guidance jointly	with	the	FDIC	and	the	OCC	that	is	designed	to	ensure	that	incentive compensation	paid	by	banking	organizations	does	not	encourage	imprudent	risk- taking	that	threatens	the	organizations'	safety	and	soundness.	In	addition,	under the	Dodd-Frank	Act,	federal	regulators,	including	the	Federal	Reserve,	must	issue regulations	or	guidelines	requiring	covered	financial	institutions,	including	the Firm,	to	report	the	structure	of	all	of	their	incentive-based	compensation arrangements	and	prohibit	incentive-based	payment	arrangements	that	encourage inappropriate	risks	by	providing	compensation	that	is	excessive	or	that	could lead	to	material	financial	loss	to	the	institution.	The	Federal	Reserve	has conducted	a	review	of	the	incentive	compensation	policies	and	practices	of	a number	of	large	banking	institutions,	including	the	Firm.	In	addition	to	the Federal	Reserve,	the	Financial	Stability	Board	has	established	standards	covering compensation	principles	for	banks.	In	Europe,	the	Fourth	Capital	Requirements Directive	(CRD	IV)	includes	compensation	provisions.	In	the	U.K., compensation	standards	are	governed	by	the	Remuneration	Code	of	the	PRA	and the	FCA.	The	implementation	of	the	Federal	Reserve's	and	other	banking regulators'	guidelines	regarding	compensation	are	expected	to	evolve	over	the next	several	years,	and	may	affect	the	manner	in	which	the	Firm	structures	its compensation	programs	and	practices.

# Significant	international	regulatory	initiatives:

The	EU	operates	a	European	Systemic	Risk	Board	which	monitors	financial stability,	together	with	European	Supervisory	Agencies	which	set	detailed regulatory	rules	and	encourage	supervisory	convergence	across	the	28	Member States.	The	EU	has	also	created	a	Single	Supervisory	Mechanism	for	the	euro- zone,	under	which	the	regulation	of	all	banks	in	that	zone	will	be	under	the auspices	of	the	European	Central	Bank,	together	with	a	Single	Resolution Mechanism	and	Single	Resolution	Board,	having	jurisdiction	over	bank resolution	in	the	zone.	At	both	global	and	EU	levels,	various	proposals	are	under consideration	to	address	risks	associated	with	global	financial	institutions.	Some of	the	initiatives	adopted	include	increased	capital	requirements	for	certain trading	instruments	or	exposures	and	compensation	limits	on	certain	employees located	in	affected	countries.

In	the	EU,	there	is	an	extensive	and	complex	program	of	final	and	proposed regulatory	enhancement	which	reflects,	in	part,	the	EU's	commitments	to policies	of	the	Group	of	Twenty	Finance	Ministers	and	Central	Bank	Governors ("G-20")	together	with	other	plans	specific	to	the	EU.	This	program	includes EMIR,	which	requires,	among	other	things,	the	central	clearing	of	standardized derivatives;	and	MiFID	II,	which	gives	effect	to	the	G-20	commitment	to	trading of	derivatives	through	central	clearing	houses	and	exchanges	and	also	includes significantly	enhanced	requirements	for	pre-	and	post-trade	transparency	and	a significant	reconfiguration	of	the	regulatory	supervision	of	execution	venues.

The	EU	is	also	currently	considering	or	implementing	significant	revisions	to laws	covering:	depositary	activities;	credit	rating	activities;	resolution	of	banks, investment	firms	and	market	infrastructures;	anti-money-laundering	controls; data	security	and	privacy;	corporate	governance	in	financial	firms;	and implementation	in	the	EU	of	the	Basel	III	capital	and	liquidity	standards.

Following	the	issuance	of	the	Report	of	the	High	Level	Expert	Group	on Reforming	the	Structure	of	the	EU	Banking	Sector	(the	"Liikanen	Group"),	the EU	has	proposed	legislation	providing	for	a	proprietary	trading	ban	and mandatory	separation	of	other	trading	activities	within	certain	banks,	while various	EU	Member	States	have	separately	enacted	similar	measures.	In	the U.K.,	legislation	was	adopted	that	mandates	the	separation	(or	"ring-fencing")	of deposit-taking	activities	from	securities	trading	and	other	analogous	activities within	banks,	subject	to	certain	exemptions.	The	legislation	includes	the supplemental	recommendation	of	the	Parliamentary	Commission	on	Banking Standards	(the	"Tyrie	Commission")	that	such	ring-fences	should	be	"electrified" by	the	imposition	of	mandatory	forced	separation	on	banking	institutions	that	are deemed	to	test	the	limits	of	the	safeguards.	Parallel	but	distinct	provisions	have been	enacted	by	the	French,	Belgian	and	German	governments.	These	measures may	separately	or	taken	together	have	significant	implications	for	the	Firm's organizational

structure	in	Europe,	as	well	as	its	permitted	activities	and	capital	deployment	in the	EU.

U.K.	regulators	are	introducing	a	range	of	policy	measures	that	make	significant changes	to	the	regulatory	environment	in	the	U.K.	Alongside	broader recommendations	made	by	the	Fair	and	Effective	Markets	Review	which	focused on	fixed	income	currencies	and	commodities	markets,	there	is	a	focus	by	U.K. regulators	on	raising	standards	and	accountability	of	individuals,	and	promoting forward-looking	conduct	risk	identification	and	mitigation,	including	by introducing	the	new	Senior	Managers	and	Certification	Regimes.

# Item	1A:	RISK	FACTORS

The	following	discussion	sets	forth	the	material	risk	factors	that	could	affect JPMorgan	Chase's	financial	condition	and	operations.	Readers	should	not consider	any	descriptions	of	such	factors	to	be	a	complete	set	of	all	potential risks	that	could	affect	the	Firm.

# Regulatory	Risk

# JPMorgan	Chase	operates	within	a	highly	regulated	industry,	and	the Firm's	businesses	and	results	are	significantly	affected	by	the	laws	and regulations	to	which	the	Firm	is	subject.

As	a	global	financial	services	firm,	JPMorgan	Chase	is	subject	to	extensive	and comprehensive	regulation	under	federal	and	state	laws	in	the	U.S.	and	the	laws	of the	various	jurisdictions	outside	the	U.S.	in	which	the	Firm	does	business.	The financial	services	industry	has	experienced	and	continues	to	experience	an unprecedented	increase	in	regulations	and	supervision,	both	in	the	U.S.	and globally,	and	the	cumulative	effect	of	all	of	the	new	and	proposed	legislation	and regulations	on	the	Firm's	business,	operations	and	profitability	remains uncertain.

The	recent	legislative	and	regulatory	developments,	as	well	as	future	legislative or	regulatory	actions	in	the	U.S.	and	in	the	other	countries	in	which	the	Firm operates,	and	any	required	changes	to	the	Firm's	business	or	operations	resulting from	such	developments	and	actions,	could	result	in	a	significant	loss	of	revenue for	the	Firm,	impose	additional	compliance	and	other	costs	on	the	Firm	or otherwise	reduce	the	Firm's	profitability,	limit	the	products	and	services	that	the Firm	offers	or	its	ability	to	pursue	business	opportunities	in	which	it	might otherwise	consider	engaging,	require	the	Firm	to	dispose	of	or	curtail	certain businesses,	affect	the	value	of	assets	that	the	Firm	holds,	require	the	Firm	to increase	its	prices	and	therefore	reduce	demand	for	its	products,	or	otherwise adversely	affect	the	Firm's	businesses.	In	addition,	to	the	extent	that	legislative or	regulatory	initiatives	are	imposed	on	a	limited	subset	of	financial	institutions (based	on	size,	activities,	geography	or	other	criteria),	the	requirements	to	which the	Firm	may	be	subject	under	such	laws	and	regulations	could	require	the	Firm to	restructure	its	businesses,	or	re-price	or	curtail	the	products	or	services	that	it offers	to	customers,	which	could	result	in	the	Firm	not	being	able	to	compete effectively	with	other	institutions	that	are	not	impacted	in	the	same	way.

In	addition,	there	can	be	significant	differences	in	the	ways	that	similar regulatory	initiatives	affecting	the	financial	services	industry	are	implemented	in the	U.S.	and	in	different	countries	and	regions	in	which	JPMorgan	Chase	does business.	For	example,	recent	legislative	and	regulatory	initiatives	within	the	EU, including	those	relating	to	the	resolution	of	financial	institutions,	the	separation of	trading	activities	from	core	banking	services,	mandatory	on-exchange	trading, position	limits	and	reporting	rules	for	derivatives,	conduct	of	business requirements,	restrictions	on	compensation	and	governance	and	accountability regimes,	could	require	the	Firm	to	make	significant	modifications	to	its	non-U.S. business,	operations	and	legal	entity	structure	in	order	to	comply	with	these requirements.	These	differences	in	implemented	or	proposed	non-U.S. regulations	and	initiatives	may	be	inconsistent	or	may	conflict	with	current	or proposed	regulations	in	the	U.S.,	which	could	subject	the	Firm	to	increased compliance	and	legal	costs,	as	well	as	higher	operational,	capital	and	liquidity costs,	all	of	which	could	have	an	adverse	effect	on	the	Firm's	business,	results	of operations	and	profitability.

# Expanded	regulatory	and	governmental	oversight	of	JPMorgan	Chase's businesses	may	continue	to	increase	the	Firm's	costs	and	risks.

The	Firm's	businesses	and	operations	are	increasingly	subject	to	heightened governmental	and	regulatory	oversight	and	scrutiny.	The	Firm	has	paid significant	fines	(or	has	provided	significant	monetary	and	other	relief)	to	resolve a	number	of	investigations	or	enforcement	actions	by	governmental	agencies. The	Firm	continues	to	devote	substantial	resources	to	satisfying	the	requirements of	regulatory	consent	orders	and	other	settlements	to	which	it	is	subject,	which increases	the	Firm's	operational	and	compliance	costs.

Certain	regulators	have	taken	measures	in	connection	with	specific	enforcement actions	against	financial	institutions	(including	the	Firm)	that	require	admissions of	wrongdoing	and	compliance	with	other	conditions	in	connection	with	settling such	matters.	Such	admissions	and	conditions	can	lead	to,	among	other	things, greater	exposure	in	civil	litigation,	harm	to	reputation,	disqualification	from providing	business	to	certain	clients	and	in	certain	jurisdictions,	and	other	direct and	indirect	adverse	effects.

In	addition,	U.S.	government	officials	have	indicated	and	demonstrated	a willingness	to	bring	criminal	actions	against	financial	institutions,	including	the Firm,	and	have	increasingly	sought,	and	obtained,	resolutions	that	include criminal	pleas	from	those	institutions,	such	as	the	Firm's	agreement	in	May	2015 to	plead	guilty	to	a	single	violation	of	federal	antitrust	law	in	connection	with	its settlements	with	certain	government	authorities	relating	to	its	foreign	exchange sales	and	trading	activities	and	controls	related	to	those	activities.	Such resolutions,	whether	with	U.S.	or	non-U.S.	authorities,	could	have	significant collateral	consequences	for	a	subject	financial	institution,	including	loss	of customers	and	business,	or	the	inability	to	offer	certain	products	or	services,	or losing	permission	to	operate	certain	businesses,	for	a	period	of	time	(absent	the

forbearance	of,	or	the	granting	of	waivers	by,	applicable	regulators).

The	Firm	expects	that	it	and	the	financial	services	industry	as	a	whole	will continue	to	be	subject	to	heightened	regulatory	scrutiny	and	governmental investigations	and	enforcement	actions	and	that	violations	of	law	will	more frequently	be	met	with	formal	and	punitive	enforcement	action,	including	the imposition	of	significant	monetary	and	other	sanctions,	rather	than	with	informal supervisory	action.

In	addition,	if	the	Firm	fails	to	meet	the	requirements	of	the	various governmental	settlements	to	which	it	is	subject,	or	more	generally,	to	maintain risk	and	control	procedures	and	processes	that	meet	the	heightened	standards established	by	its	regulators	and	other	government	agencies,	it	could	be	required to	enter	into	further	orders	and	settlements,	pay	additional	fines,	penalties	or judgments,	or	accept	material	regulatory	restrictions	on	its	businesses.	The	extent of	the	Firm's	exposure	to	legal	and	regulatory	matters	may	be	unpredictable	and could,	in	some	cases,	substantially	exceed	the	amount	of	reserves	that	the	Firm has	established	for	such	matters.

# Requirements	for	the	orderly	resolution	of	the	Firm	could	require JPMorgan	Chase	to	restructure	or	reorganize	its	businesses,	and	holders	of JPMorgan	Chase's	debt	and	equity	securities	would	be	at	risk	of	absorbing losses	if	the	Firm	were	to	enter	into	a	resolution.

Under	Title	I	of	the	Dodd-Frank	Act	("Title	I")	and	Federal	Reserve	and	FDIC rules,	the	Firm	is	required	to	prepare	and	submit	periodically	to	the	Federal Reserve	and	the	FDIC	a	detailed	plan	for	the	orderly	resolution	of	JPMorgan Chase	&	Co.	and	certain	of	its	subsidiaries	under	the	U.S.	Bankruptcy	Code	and other	applicable	insolvency	laws	in	the	event	of	future	material	financial	distress or	failure.	In	August	2014,	the	Federal	Reserve	and	the	FDIC	announced	the completion	of	their	reviews	of	the	second	round	of	Title	I	resolution	plans submitted	by	eleven	large,	complex	banking	organizations	in	2013,	including	the Firm.	The	agencies	jointly	identified	specific	shortcomings	with	the	2013 resolution	plans,	including	the	Firm's	2013	plan.	The	FDIC's	board	of	directors determined	under	Title	I	that	the	2013	resolution	plans,	including	the	Firm's 2013	plan,	were	not	credible	and	did	not	facilitate	an	orderly	resolution	under	the U.S.	Bankruptcy	Code.	The	Federal	Reserve	Board	determined	that	the	eleven banking	organizations	must	take	immediate	actions	to	improve	their	resolvability and	reflect	those	improvements	in	their	2015	plans.	The	Firm	has	devoted significant	resources	to	its	resolution	planning	efforts,	and	believes	that	in	its most	recent	Title	I	resolution	plan	submitted	to	the	Federal	Reserve	and	FDIC	in July	2015,	it	has	addressed,	or	has	made	substantial	progress	in	addressing,	each of	the	shortcomings	previously	identified	by	the	agencies.

However,	if	the	Federal	Reserve	and	the	FDIC	were	to	jointly	determine	that	the Firm's	2015	plan,	or	any	future	update	of	that	plan,	is	not	credible,	and	the	Firm is	unable	to	remedy	the	identified	deficiencies	in	a	timely	manner,	the	regulators may	jointly	impose	more	stringent	capital,

leverage	or	liquidity	requirements	on	the	Firm	or	restrictions	on	growth, activities	or	operations	of	the	Firm,	and	could,	if	such	deficiencies	are	not remedied	within	two	years	after	such	a	determination,	require	the	Firm	to restructure,	reorganize	or	divest	businesses,	legal	entities,	operational	systems and/or	intercompany	transactions	in	ways	that	could	materially	and	adversely affect	the	Firm's	operations	and	strategy.	In	addition,	in	order	to	develop	a	Title	I resolution	plan	that	the	Federal	Reserve	and	FDIC	determine	is	credible,	the Firm	may	need	to	make	certain	changes	to	its	legal	entity	structure	and	to	certain intercompany	and	external	activities,	which	could	result	in	increased	funding	or operational	costs.

In	addition	to	the	Firm's	plan	for	orderly	resolution,	the	Firm's	resolution	plan also	recommends	to	the	Federal	Reserve	and	the	FDIC	its	proposed	optimal strategy	to	resolve	the	Firm	under	the	special	resolution	procedure	provided	in Title	II	of	the	Dodd-Frank	Act	("Title	II").	The	Firm's	recommendation	involves a	"single	point	of	entry"	recapitalization	model	in	which	the	FDIC	would	use	its power	to	create	a	"bridge	entity"	for	JPMorgan	Chase;	transfer	the	systemically important	and	viable	parts	of	the	Firm's	business,	principally	the	stock	of JPMorgan	Chase	&	Co.'s	main	operating	subsidiaries	and	any	intercompany claims	against	such	subsidiaries,	to	the	bridge	entity;	recapitalize	those subsidiaries	by,	among	other	things,	converting	some	or	all	of	such intercompany	claims	to	capital;	and	exchange	external	debt	claims	against JPMorgan	Chase	&	Co.	for	equity	in	the	bridge	entity.	As	discussed	below,	the Federal	Reserve	has	also	proposed	rules	regarding	the	minimum	levels	of unsecured	external	long-term	debt	and	other	loss-absorbing	capacity	that	bank holding	companies	would	be	required	to	have	issued	and	outstanding,	as	well	as guidelines	defining	the	terms	of	qualifying	debt	instruments,	to	ensure	that adequate	levels	of	debt	are	maintained	at	the	holding	company	level	for	purposes of	recapitalization	of	the	bridge	entity	and	operating	subsidiaries	("eligible LTD").	If	JPMorgan	Chase	&	Co.	were	to	enter	into	a	resolution,	either	in	a proceeding	under	the	U.S.	Bankruptcy	Code	or	in	a	receivership	administered	by the	FDIC	under	Title	II	of	the	Dodd-Frank	Act,	holders	of	eligible	LTD	and other	debt	and	equity	securities	of	the	Firm	would	be	at	risk	of	absorbing	the losses	of	JPMorgan	Chase	&	Co.	and	its	affiliates.	If	JPMorgan	Chase	&	Co. commenced	proceedings	under	the	U.S.	Bankruptcy	Code,	creditors	and shareholders	of	JPMorgan	Chase	&	Co.	would	realize	value	only	to	the	extent available	to	JPMorgan	Chase	&	Co.	as	a	shareholder	of	JPMorgan	Chase	Bank, N.A.	and	its	other	subsidiaries,	after	the	payment	to	the	creditors	of	such subsidiaries.	In	addition,	even	under	the	Firm's	preferred	resolution	strategy under	Title	II	of	the	Dodd-Frank	Act,	the	value	of	the	stock	of	the	bridge	entity that	would	be	redistributed	to	holders	of	the	Firm's	eligible	LTD	and	other	debt securities	may	not	be	sufficient	to	repay	all	or	part	of	the	principal	amount	and interest	on	such	debt.	It	is	also	possible	that	the	application	of	the	Firm's recommended	Title	II	strategy	could	result	in	greater	losses	to	security	holders	of JPMorgan	Chase	&	Co.	than	the	losses	that	would	result	from	a	different resolution	strategy	for	the	Firm.

# Market	Risk

# JPMorgan	Chase's	results	of	operations	have	been,	and	may	continue	to	be, adversely	affected	by	U.S.	and	global	financial	market	and	economic conditions.

JPMorgan	Chase's	businesses	are	materially	affected	by	economic	and	market conditions,	including	the	liquidity	of	the	global	financial	markets;	the	level	and volatility	of	debt	and	equity	prices,	interest	rates,	currency	and	commodities prices	(including	oil	prices)	and	other	market	indices;	investor,	consumer	and business	sentiment;	events	that	reduce	confidence	in	the	financial	markets; inflation	and	unemployment;	the	availability	and	cost	of	capital	and	credit;	the economic	effects	of	natural	disasters,	health	emergencies	or	pandemics,	severe weather	conditions,	outbreaks	of	hostilities,	terrorism	or	other	geopolitical instabilities;	monetary	policies	and	actions	taken	by	the	Federal	Reserve	and other	central	banks;	and	the	health	of	the	U.S.	and	global	economies.	These conditions	can	affect	the	Firm's	businesses	both	directly	and	through	their impact	on	the	businesses	and	activities	of	the	Firm's	clients	and	customers.

In	the	Firm's	underwriting	and	advisory	businesses,	the	above-mentioned	factors can	affect	the	volume	of	transactions	that	the	Firm	executes	for	its	clients	and customers	and,	therefore,	the	revenue	that	the	Firm	receives,	as	well	as	the willingness	of	other	financial	institutions	and	investors	to	participate	in	loan syndications	or	underwritings	managed	by	the	Firm.

The	Firm	generally	maintains	market-making	positions	in	the	fixed	income, currency,	commodities,	credit	and	equity	markets	to	facilitate	client	demand	and provide	liquidity	to	clients.	The	revenue	derived	from	these	positions	is	affected by	many	factors,	including	the	Firm's	success	in	effectively	hedging	its	market and	other	risks;	volatility	in	interest	rates	and	equity,	debt	and	commodities markets;	interest	rate	and	credit	spreads;	and	the	availability	of	liquidity	in	the capital	markets,	all	of	which	are	affected	by	global	economic	and	market conditions.	Certain	of	the	Firm's	market-making	positions	could	be	adversely affected	by	the	lack	of	liquidity,	which	will	be	influenced	by	many	of	these factors,	and	which	could	affect	the	Firm's	ability	to	realize	returns	from	such activities	and	adversely	affect	the	Firm's	earnings.

The	Firm	may	be	adversely	affected	by	declining	asset	values.	This	is particularly	true	for	businesses	that	earn	fees	for	managing	third-party	assets	or receive	or	post	collateral.	For	example,	a	higher	level	of	U.S.	or	non-U.S.	interest rates	or	a	downturn	in	financial	markets	could	affect	the	valuations	of	the	client assets	that	the	Firm	manages	or	holds	in	custody,	which,	in	turn,	could	affect	the Firm's	revenue.	Macroeconomic	or	market	concerns	may	also	prompt	outflows from	the	Firm's	funds	or	accounts	or	cause	clients	to	invest	funds	in	products	that generate	lower	revenue.

Changes	in	interest	rates	will	affect	the	level	of	assets	and	liabilities	held	on	the Firm's	balance	sheet	and	the	revenue	that	the	Firm	earns	from	net	interest income.	A	low	interest	rate	environment	may	compress	net	interest	margins,

reducing	the	amounts	that	the	Firm	earns	on	its	investment	securities	portfolio,	or reducing	the	value	of	its	mortgage	servicing	rights	("MSR")	asset,	thereby reducing	the	Firm's	net	interest	income	and	other	revenues.	Conversely, increasing	or	high	interest	rates	may	result	in	increased	funding	costs,	lower levels	of	commercial	and	residential	loan	originations	and	diminished	returns	on the	investment	securities	portfolio	(to	the	extent	that	the	Firm	is	unable	to reinvest	contemporaneously	in	higher-yielding	assets),	thereby	adversely affecting	the	Firm's	revenues	and	capital	levels.

The	Firm's	consumer	businesses	are	particularly	affected	by	U.S.	domestic economic	conditions,	including	U.S.	interest	rates,	the	rate	of	unemployment, housing	prices,	the	level	of	consumer	confidence,	changes	in	consumer	spending and	the	number	of	personal	bankruptcies.	If	the	recent	positive	trends	in	the	U.S. economy	are	not	sustained,	this	could	diminish	demand	for	the	products	and services	of	the	Firm's	consumer	businesses,	or	increase	the	cost	to	provide	such products	and	services.	In	addition,	adverse	economic	conditions,	such	as	declines in	home	prices	or	persistent	high	levels	of	unemployment	due	to	economic dislocations	in	certain	geographies	or	industries	caused	by	falling	oil	and	gas prices	or	other	market	or	economic	factors,	could	lead	to	an	increase	in mortgage,	credit	card,	auto,	student	and	other	loan	delinquencies	and	higher	net charge-offs,	which	can	reduce	the	Firm's	earnings.

Widening	of	credit	spreads	makes	it	more	expensive	for	the	Firm	to	borrow	on both	a	secured	and	unsecured	basis,	and	may	adversely	affect	the	credit	markets and	the	Firm's	businesses.	Credit	spreads	widen	or	narrow	not	only	in	response to	Firm-specific	events	and	circumstances,	but	also	as	a	result	of	general economic	and	geopolitical	events	and	conditions.	Changes	in	the	Firm's	credit spreads	will	impact,	positively	or	negatively,	the	Firm's	earnings	on	certain liabilities	that	are	recorded	at	fair	value.

Sudden	and	significant	volatility	in	the	prices	of	securities	and	other	assets (including	loans	and	derivatives)	may	curtail	the	trading	markets	for	such securities	and	assets,	make	it	difficult	to	sell	or	hedge	such	securities	and	assets, adversely	affect	the	Firm's	profitability,	capital	or	liquidity,	or	increase	the Firm's	funding	costs.	Sustained	volatility	in	the	financial	markets	may	also negatively	affect	consumer	or	investor	confidence,	which	could	lead	to	lower client	activity	and	decreased	revenue	for	the	Firm.

# Credit	Risk

# The	financial	condition	of	JPMorgan	Chase's	customers,	clients	and counterparties,	particularly	other	financial	institutions,	could	adversely affect	the	Firm.

The	Firm	routinely	executes	transactions	with	counterparties	in	the	financial services	industry,	including	brokers	and	dealers,	commercial	banks,	investment banks,	mutual	and	hedge	funds,	investment	managers	and	other	institutional clients.	Many	of	these	transactions	expose	the	Firm	to	credit	risk	and,	in	some cases,	disputes	and	litigation	in	the	event	of	a	default	by	the	counterparty	or client.	The	failure	of	a	significant	market	participant,	or	concerns	about	a	default by	such	an	institution,	could	also

lead	to	significant	liquidity	problems	for,	or	losses	or	defaults	by,	other institutions,	which	in	turn	could	adversely	affect	the	Firm.	In	addition,	in	recent years	the	perceived	interrelationship	among	financial	institutions	has	also	led	to claims	by	other	market	participants	and	regulators	that	the	Firm	and	other financial	institutions	have	allegedly	violated	anti-trust	or	anti-competition	laws by	colluding	to	manipulate	markets,	prices	or	indices,	and	there	is	no	assurance that	such	allegations	will	not	arise	in	the	same	or	similar	contexts	in	the	future.

As	part	of	providing	clearing	services,	the	Firm	is	a	member	of	a	number	of central	counterparties	("CCPs"),	and	may	be	required	to	pay	a	portion	of	the losses	incurred	by	such	organizations	as	a	result	of	the	default	of	other	members. As	a	clearing	member,	the	Firm	is	also	exposed	to	the	risk	of	non-performance by	its	clients,	which	it	seeks	to	mitigate	through	the	maintenance	of	adequate collateral.	In	addition,	the	Firm	can	be	exposed	to	intra-day	credit	risk	of	its clients	in	connection	with	providing	cash	management,	clearing,	custodial	and other	transaction	services	to	such	clients.	If	a	client	for	which	the	Firm	provides such	services	becomes	bankrupt	or	insolvent,	the	Firm	may	suffer	losses, become	involved	in	disputes	and	litigation	with	various	parties,	including	one	or more	CCPs,	or	the	client's	bankruptcy	estate	and	other	creditors,	or	involved	in regulatory	investigations.	All	of	such	events	can	increase	the	Firm's	operational and	litigation	costs	and	may	result	in	losses	if	any	collateral	received	by	the	Firm is	insufficient	to	cover	such	losses.

During	periods	of	market	stress	or	illiquidity,	the	Firm's	credit	risk	also	may	be further	increased	when	the	Firm	cannot	realize	the	fair	value	of	the	collateral held	by	it	or	when	collateral	is	liquidated	at	prices	that	are	not	sufficient	to recover	the	full	amount	of	the	loan,	derivative	or	other	exposure	due	to	the	Firm. Further,	disputes	with	obligors	as	to	the	valuation	of	collateral	could	increase	in times	of	significant	market	stress,	volatility	or	illiquidity,	and	the	Firm	could suffer	losses	during	such	periods	if	it	is	unable	to	realize	the	fair	value	of collateral	or	manage	declines	in	the	value	of	collateral.

# Concentration	of	credit	and	market	risk	could	increase	the	potential	for significant	losses.

JPMorgan	Chase	has	exposure	to	increased	levels	of	risk	when	customers	or counterparties	are	engaged	in	similar	business	activities	or	activities	in	the	same geographic	region,	or	when	they	have	similar	economic	features	that	would cause	their	ability	to	meet	contractual	obligations	to	be	similarly	affected	by changes	in	economic	conditions.	For	example,	a	significant	deterioration	in	the credit	quality	of	one	of	the	Firm's	borrowers	or	counterparties	could	lead	to concerns	about	the	credit	quality	of	other	borrowers	or	counterparties	in	similar, related	or	dependent	industries	and	thereby	could	exacerbate	the	Firm's	credit risk	exposure	and	potentially	increase	its	losses,	including	mark-to-market	losses in	its	trading	businesses.	Similarly,	challenging	economic	conditions	affecting	a particular	industry	or	geographic	area	could	lead	to	concerns	about	the	credit quality	of	the	Firm's	borrowers	or	counterparties,	not	only	in	that	particular industry	or	geography	but	in

related	or	dependent	industries,	wherever	located,	or	about	the	ability	of customers	of	the	Firm's	consumer	businesses	living	in	such	areas	or	working	in such	affected	industries	or	related	or	dependent	industries	to	meet	their obligations	to	the	Firm.	As	a	result,	the	Firm	regularly	monitors	various segments	of	its	exposures	to	assess	potential	concentration	or	contagion	risks. The	Firm's	efforts	to	diversify	or	hedge	its	exposures	against	concentration	risks may	not	be	successful.

In	addition,	disruptions	in	the	liquidity	or	transparency	of	the	financial	markets may	result	in	the	Firm's	inability	to	sell,	syndicate	or	realize	the	value	of	its positions,	thereby	leading	to	increased	concentrations.	The	inability	to	reduce	the Firm's	positions	may	not	only	increase	the	market	and	credit	risks	associated with	such	positions,	but	may	also	increase	the	level	of	risk-weighted	assets	on the	Firm's	balance	sheet,	thereby	increasing	its	capital	requirements	and	funding costs,	all	of	which	could	adversely	affect	the	operations	and	profitability	of	the Firm's	businesses.

# Liquidity	Risk

# If	JPMorgan	Chase	does	not	effectively	manage	its	liquidity,	its	business could	suffer.

JPMorgan	Chase's	liquidity	is	critical	to	its	ability	to	operate	its	businesses. Some	potential	conditions	that	could	impair	the	Firm's	liquidity	include	markets that	become	illiquid	or	are	otherwise	experiencing	disruption,	unforeseen	cash	or capital	requirements	(including,	among	others,	commitments	that	may	be triggered	to	special	purpose	entities	("SPEs")	or	other	entities),	difficulty	in selling	or	inability	to	sell	assets,	default	by	a	CCP	or	other	counterparty, unforeseen	outflows	of	cash	or	collateral,	and	lack	of	market	or	customer confidence	in	the	Firm	or	financial	markets	in	general.	These	conditions	may	be caused	by	events	over	which	the	Firm	has	little	or	no	control.	The	widespread crisis	in	investor	confidence	and	resulting	liquidity	crisis	experienced	in	2008 and	into	early	2009	increased	the	Firm's	cost	of	funding	and	limited	its	access	to some	of	its	traditional	sources	of	liquidity	(such	as	securitized	debt	offerings backed	by	mortgages,	credit	card	receivables	and	other	assets)	during	that	time, and	there	is	no	assurance	that	these	severe	conditions	could	not	occur	in	the future.

If	the	Firm's	access	to	stable	and	low	cost	sources	of	funding,	such	as	bank deposits,	is	reduced,	the	Firm	may	need	to	raise	alternative	funding	which	may be	more	expensive	or	of	limited	availability.	In	addition,	the	Firm's	cost	of funding	could	be	affected	by	actions	that	the	Firm	may	take	in	order	to	satisfy applicable	liquidity	coverage	ratio	and	net	stable	funding	ratio	requirements,	to lower	its	GSIB	systemic	risk	score	or	to	satisfy	the	amount	of	eligible	LTD	that the	Firm	must	have	outstanding	under	the	final	TLAC	rules.

As	a	holding	company,	JPMorgan	Chase	&	Co.	relies	on	the	earnings	of	its subsidiaries	for	its	cash	flow	and,	consequently,	its	ability	to	pay	dividends	and satisfy	its	debt	and	other	obligations.	These	payments	by	subsidiaries	may	take the	form	of	dividends,	loans	or	other	payments.	Several	of	JPMorgan	Chase	& Co.'s	principal	subsidiaries	are

subject	to	dividend	distribution,	capital	adequacy	or	liquidity	coverage requirements	or	other	regulatory	restrictions	on	their	ability	to	provide	such payments.	Limitations	in	the	payments	that	JPMorgan	Chase	&	Co.	receives from	its	subsidiaries	could	reduce	its	ability	to	pay	dividends	and	satisfy	its	debt and	other	obligations.

# Proposed	banking	regulations	relating	to	liquidity,	including	U.S.	rules relating	to	total	loss-absorbing	capacity,	could	require	JPMorgan	Chase	to issue	a	substantial	amount	of	new	debt,	and	thereby	significantly	increase its	funding	costs.

On	October	30,	2015,	the	Federal	Reserve	issued	proposed	rules	(the	"proposed TLAC	rules")	that	would	require	the	top-tier	holding	companies	of	eight	U.S. global	systemically	important	bank	holding	companies	("U.S.	GSIB	BHCs"), including	JPMorgan	Chase	&	Co.,	among	other	things,	to	maintain	minimum amounts	of	eligible	LTD,	commencing	January	1,	2019.	The	proposed	TLAC rules	would	disqualify	from	eligible	LTD,	among	other	instruments,	senior	debt securities	that	permit	acceleration	for	reasons	other	than	insolvency	or	payment default,	as	well	as	debt	securities	that	are	not	governed	by	U.S.	law	and structured	notes.	The	currently	outstanding	senior	long-term	debt	of	U.S.	GSIB BHCs,	including	JPMorgan	Chase	&	Co.,	includes	structured	notes	as	well	as other	debt	that	typically	permits	acceleration	for	reasons	other	than	insolvency	or payment	default	and,	as	a	result,	none	of	such	outstanding	senior	long-term	debt or	any	subsequently	issued	senior	long-term	debt	with	similar	terms	would qualify	as	eligible	LTD	under	the	proposed	TLAC	rules.	The	Federal	Reserve has	requested	comment	on	whether	certain	currently	outstanding	instruments should	be	allowed	to	count	as	eligible	LTD	"despite	containing	features	that would	be	prohibited	under	the	proposal."	The	steps	that	the	U.S.	GSIB	BHCs, including	JPMorgan	Chase	&	Co.,	may	need	to	take	to	come	into	compliance with	the	final	TLAC	rules,	including	the	amount	and	form	of	long-term	debt	that must	be	refinanced	or	issued,	will	depend	in	substantial	part	on	the	ultimate eligibility	requirements	for	senior	long-term	debt	and	any	grandfathering provisions.	To	the	extent	that	outstanding	senior	long-term	debt	of	JPMorgan Chase	&	Co.	is	not	classified	as	eligible	LTD	under	the	TLAC	rule	as	finally adopted	by	the	Federal	Reserve,	the	Firm	could	be	required	to	issue	a	substantial amount	of	new	senior	long-term	debt	which	could	significantly	increase	the Firm's	funding	costs.

Authorities	in	some	non-U.S.	jurisdictions	in	which	the	Firm	has	operations	have enacted	legislation	or	regulations	requiring	that	certain	subsidiaries	of	the	Firm operating	in	those	countries	maintain	independent	capital	and	liquidity.	In addition,	some	non-U.S.	regulators	have	proposed	that	large	banks	which conduct	certain	businesses	in	their	jurisdictions	operate	through	separate subsidiaries	located	in	those	countries.	These	requirements,	and	any	future	laws or	regulations	that	seek	to	increase	capital	or	liquidity	requirements	that	would be	applicable	to	non-U.S.	subsidiaries	of	the	Firm,	could	hinder	the	Firm's	ability to	efficiently	manage	its	funding	and	liquidity	in	a	centralized	manner.

# Reductions	in	JPMorgan	Chase's	credit	ratings	may	adversely	affect	its liquidity	and	cost	of	funding,	as	well	as	the	value	of	debt	obligations	issued by	the	Firm.

JPMorgan	Chase	&	Co.	and	certain	of	its	principal	subsidiaries	are	currently rated	by	credit	rating	agencies.	Rating	agencies	evaluate	both	general	and	firm- and	industry-specific	factors	when	determining	their	credit	ratings	for	a particular	financial	institution,	including	economic	and	geopolitical	trends, regulatory	developments,	future	profitability,	risk	management	practices,	legal expenses,	assumptions	surrounding	government	support,	and	ratings	differentials between	bank	holding	companies	and	their	bank	and	non-bank	subsidiaries. Although	the	Firm	closely	monitors	and	manages,	to	the	extent	it	is	able,	factors that	could	influence	its	credit	ratings,	there	is	no	assurance	that	the	Firm's	credit ratings	will	not	be	lowered	in	the	future,	or	that	any	such	downgrade	would	not occur	at	times	of	broader	market	instability	when	the	Firm's	options	for responding	to	events	may	be	more	limited	and	general	investor	confidence	is low.

Furthermore,	a	reduction	in	the	Firm's	credit	ratings	could	reduce	the	Firm's access	to	capital	markets,	materially	increase	the	cost	of	issuing	securities, trigger	additional	collateral	or	funding	requirements,	and	decrease	the	number	of investors	and	counterparties	willing	or	permitted,	contractually	or	otherwise,	to do	business	with	or	lend	to	the	Firm,	thereby	curtailing	the	Firm's	business operations	and	reducing	its	profitability.	In	addition,	any	such	reduction	in	credit ratings	may	increase	the	credit	spreads	charged	by	the	market	for	taking	credit risk	on	JPMorgan	Chase	&	Co.	and	its	subsidiaries	and,	as	a	result,	could adversely	affect	the	value	of	debt	and	other	obligations	that	JPMorgan	Chase	& Co.	and	its	subsidiaries	have	issued	or	may	issue	in	the	future.

# Legal	Risk

# JPMorgan	Chase	faces	significant	legal	risks,	both	from	regulatory investigations	and	proceedings	and	from	private	actions	brought	against	the Firm.

JPMorgan	Chase	is	named	as	a	defendant	or	is	otherwise	involved	in	various legal	proceedings,	including	class	actions	and	other	litigation	or	disputes	with third	parties.	Actions	currently	pending	against	the	Firm	may	result	in judgments,	settlements,	fines,	penalties	or	other	results	adverse	to	the	Firm, which	could	materially	and	adversely	affect	the	Firm's	business,	financial condition	or	results	of	operations,	or	cause	serious	harm	to	the	Firm's	reputation. As	a	participant	in	the	financial	services	industry,	it	is	likely	that	the	Firm	will continue	to	experience	a	high	level	of	litigation	related	to	its	businesses	and operations.

In	addition,	and	as	noted	above,	the	Firm's	businesses	and	operations	are	also subject	to	heightened	regulatory	oversight	and	scrutiny,	which	may	lead	to additional	regulatory	investigations	or	enforcement	actions.	Regulators	and	other government	agencies	examine	the	operations	of	the	Firm	and	its	subsidiaries	on both	a	routine-	and	targeted-exam	basis,	and	there	is	no	assurance	that	they	will not	pursue	additional	regulatory	settlements	or	other	enforcement	actions	against the	Firm	in	the	future.

A	single	event	may	give	rise	to	numerous	and	overlapping	investigations	and proceedings,	either	by	multiple	federal	and	state	agencies	and	officials	in	the U.S.	or,	in	some	instances,	regulators	and	other	governmental	officials	in	non- U.S.	jurisdictions.	These	and	other	initiatives	from	U.S.	and	non-U.S. governmental	authorities	and	officials	may	subject	the	Firm	to	further judgments,	settlements,	fines	or	penalties,	or	cause	the	Firm	to	be	required	to restructure	its	operations	and	activities	or	to	cease	offering	certain	products	or services,	all	of	which	could	harm	the	Firm's	reputation	or	lead	to	higher operational	costs,	thereby	reducing	the	Firm's	profitability,	or	result	in	collateral consequences	as	discussed	above.

# Other	Business	Risks

# JPMorgan	Chase's	operations	are	subject	to	risk	of	loss	from	unfavorable economic,	monetary	and	political	developments	in	the	U.S.	and	around	the world.

JPMorgan	Chase's	businesses	and	earnings	are	affected	by	the	fiscal	and	other policies	that	are	adopted	by	various	U.S.	and	non-U.S.	regulatory	authorities	and agencies.	The	Federal	Reserve	regulates	the	supply	of	money	and	credit	in	the U.S.	and	its	policies	determine	in	large	part	the	cost	of	funds	for	lending	and investing	in	the	U.S.	and	the	return	earned	on	those	loans	and	investments. Changes	in	Federal	Reserve	policies	(as	well	as	the	fiscal	and	monetary	policies of	non-U.S.	central	banks	or	regulatory	authorities	and	agencies,	such	as "pegging"	the	exchange	rate	of	their	currency	to	the	currencies	of	others)	are beyond	the	Firm's	control	and	may	be	difficult	to	predict,	and	consequently, unanticipated	changes	in	these	policies	could	have	a	negative	impact	on	the Firm's	activities	and	results	of	operations.

The	Firm's	businesses	and	revenue	are	also	subject	to	risks	inherent	in	investing and	market-making	in	securities,	loans	and	other	obligations	of	companies worldwide.	These	risks	include,	among	others,	negative	effects	from	slowing growth	rates	or	recessionary	economic	conditions,	or	the	risk	of	loss	from unfavorable	political,	legal	or	other	developments,	including	social	or	political instability,	in	the	countries	or	regions	in	which	such	companies	operate,	as	well as	the	other	risks	and	considerations	as	described	further	below.

Several	of	the	Firm's	businesses	engage	in	transactions	with,	or	trade	in obligations	of,	U.S.	and	non-U.S.	governmental	entities,	including	national,	state, provincial,	municipal	and	local	authorities.	These	activities	can	expose	the	Firm to	enhanced	sovereign,	credit-related,	operational	and	reputation	risks,	including the	risks	that	a	governmental	entity	may	default	on	or	restructure	its	obligations or	may	claim	that	actions	taken	by	government	officials	were	beyond	the	legal authority	of	those	officials,	which	could	adversely	affect	the	Firm's	financial condition	and	results	of	operations.

Further,	various	countries	or	regions	in	which	the	Firm	operates	or	invests,	or	in which	the	Firm	may	do	so	in	the	future,	have	in	the	past	experienced	severe economic	disruptions	particular	to	those	countries	or	regions.	Low	or	volatile	oil prices,	coupled	with	the	slowdown	in	the

macroeconomic	prospects	in	China,	and	concerns	about	economic	weaknesses	in the	Eurozone	(including	the	permanent	resolution	of	the	Greek	"bailout" program),	could	continue	to	undermine	investor	confidence	and	affect	the operating	environment	in	2016.	In	some	cases,	concerns	regarding	the	fiscal condition	of	one	or	more	countries	can	cause	a	contraction	of	available	credit	and reduced	activity	among	trading	partners	or	create	market	volatility	that	could lead	to	"market	contagion"	affecting	other	countries	in	the	same	region	or beyond	the	region.	Accordingly,	it	is	possible	that	economic	disruptions	in certain	countries,	even	in	countries	in	which	the	Firm	does	not	conduct	business or	have	operations	or	engages	in	only	limited	activities,	may	adversely	affect	the Firm.

# JPMorgan	Chase's	operations	in	emerging	markets	may	be	hindered	by local	political,	social	and	economic	factors,	and	may	be	subject	to	additional compliance	costs	and	risks.

Some	of	the	countries	in	which	JPMorgan	Chase	conducts	its	businesses	have economies	or	markets	that	are	less	developed	and	more	volatile,	and	may	have legal	and	regulatory	regimes	that	are	less	established	or	predictable,	than	the	U.S. and	other	developed	markets	in	which	the	Firm	currently	operates.	Some	of	these countries	have	in	the	past	experienced	severe	economic	disruptions,	including extreme	currency	fluctuations,	high	inflation,	low	or	negative	growth,	or	defaults or	potential	defaults	on	sovereign	debt,	among	other	negative	conditions,	or	have imposed	restrictive	monetary	policies	such	as	currency	exchange	controls	and other	laws	and	restrictions	that	adversely	affect	the	local	and	regional	business environment.	In	addition,	these	countries,	as	well	as	certain	more	developed countries,	have	recently	been	more	susceptible	to	unfavorable	political,	social	or economic	developments;	these	development	have	in	the	past	resulted	in,	and	may in	the	future	lead	to,	social	unrest,	general	strikes	and	demonstrations,	crime	and corruption,	security	and	personal	safety	issues,	outbreaks	of	hostilities, overthrow	of	incumbent	governments,	terrorist	attacks	or	other	forms	of	internal discord,	all	of	which	can	adversely	affect	the	Firm's	operations	or	investments	in such	countries.	Political,	social	or	economic	disruption	or	dislocation	in	certain countries	or	regions	in	which	the	Firm	conducts	its	businesses	can	hinder	the growth	and	profitability	of	those	operations.

Less	developed	legal	and	regulatory	systems	in	certain	countries	can	also	have adverse	consequences	on	the	Firm's	operations	in	those	countries,	including, among	others,	the	absence	of	a	statutory	or	regulatory	basis	or	guidance	for engaging	in	specific	types	of	business	or	transactions;	the	promulgation	of conflicting	or	ambiguous	laws	and	regulations	or	the	inconsistent	application	or interpretation	of	existing	laws	and	regulations;	uncertainty	as	to	the enforceability	of	contractual	obligations;	difficulty	in	competing	in	economies	in which	the	government	controls	or	protects	all	or	a	portion	of	the	local	economy or	specific	businesses,	or	where	graft	or	corruption	may	be	pervasive;	and	the threat	of	arbitrary	regulatory	investigations,	civil	litigations	or	criminal prosecutions.

Revenue	from	international	operations	and	trading	in	non-U.S.	securities	and other	obligations	may	be	subject	to	negative	fluctuations	as	a	result	of	the	above considerations,	as	well	as	due	to	governmental	actions	including	monetary policies,	expropriation,	nationalization,	confiscation	of	assets,	price	controls, capital	controls,	exchange	controls,	and	changes	in	laws	and	regulations.	The impact	of	these	fluctuations	could	be	accentuated	as	some	trading	markets	are smaller,	less	liquid	and	more	volatile	than	larger	markets.	Also,	any	of	the above-mentioned	events	or	circumstances	in	one	country	can	affect,	and	in	the past	conditions	of	these	types	have	affected,	the	Firm's	operations	and investments	in	another	country	or	countries,	including	the	Firm's	operations	in the	U.S.	As	a	result,	any	such	unfavorable	conditions	or	developments	could have	an	adverse	impact	on	the	Firm's	business	and	results	of	operations.

Conducting	business	in	countries	with	less	developed	legal	and	regulatory regimes	often	requires	the	Firm	to	devote	significant	additional	resources	to understanding,	and	monitoring	changes	in,	local	laws	and	regulations,	as	well	as structuring	its	operations	to	comply	with	local	laws	and	regulations	and implementing	and	administering	related	internal	policies	and	procedures.	There can	be	no	assurance	that	the	Firm	will	always	be	successful	in	its	efforts	to conduct	its	business	in	compliance	with	laws	and	regulations	in	countries	with less	predictable	legal	and	regulatory	systems	or	that	the	Firm	will	be	able	to develop	effective	working	relationships	with	local	regulators.	In	addition,	the Firm	can	also	incur	higher	costs,	and	face	greater	compliance	risks,	in	structuring and	operating	its	businesses	outside	the	U.S.	to	comply	with	U.S.	anti-corruption and	anti-money	laundering	laws	and	regulations.

JPMorgan	Chase	relies	on	the	effectiveness	and	integrity	of	its	processes, operating	systems	and	employees,	and	those	of	third	parties,	and	certain failures	of	such	processes	or	systems	or	misconduct	by	such	employees could	materially	and	adversely	affect	the	Firm's	operations.

JPMorgan	Chase's	businesses	are	dependent	on	the	Firm's	ability	to	process, record	and	monitor	an	increasingly	large	number	of	complex	transactions	and	to do	so	on	a	faster	and	more	frequent	basis.	The	Firm's	front-	and	back-office trading	systems	similarly	rely	on	their	access	to,	and	on	the	functionality	of,	the operating	systems	maintained	by	third	parties	such	as	clearing	and	payment systems,	central	counterparties,	securities	exchanges	and	data	processing	and technology	companies.	If	the	Firm's	financial,	accounting,	trading	or	other	data processing	systems,	or	the	operating	systems	of	third	parties	on	which	the	Firm's businesses	are	dependent,	are	unable	to	meet	these	increasingly	demanding standards,	or	if	they	fail	or	have	other	significant	shortcomings,	the	Firm	could be	materially	and	adversely	affected.	Moreover,	as	the	speed,	frequency,	volume and	complexity	of	transactions	(and	the	requirements	to	report	such	transactions on	a	real-time	basis	to	clients,	regulators	and	financial	intermediaries)	increases, the	risk	of	human	and/or	systems	error	in	connection	with	such	transactions increases,	and	it	becomes

more	challenging	to	maintain	the	Firm's	operational	systems	and	infrastructure. The	Firm	is	similarly	dependent	on	its	employees.	The	Firm	could	be	materially and	adversely	affected	if	one	or	more	of	its	employees	causes	a	significant operational	breakdown	or	failure,	either	as	a	result	of	human	error	or	where	an individual	purposefully	sabotages	or	fraudulently	manipulates	the	Firm's operations	or	systems.	In	addition,	when	the	Firm	changes	processes	or introduces	new	products	and	services	or	new	connectivity	solutions,	the	Firm may	not	fully	appreciate	or	identify	new	operational	risks	that	may	arise	from such	changes.	Any	of	these	occurrences	could	diminish	the	Firm's	ability	to operate	one	or	more	of	its	businesses,	or	result	in	potential	liability	to	clients	and customers,	increased	operating	expenses,	higher	litigation	costs	(including	fines and	sanctions),	damage	to	reputation,	impairment	of	liquidity,	regulatory intervention	or	weaker	competitive	standing,	any	of	which	could	materially	and adversely	affect	the	Firm.

Third	parties	with	which	the	Firm	does	business,	including	retailers	and	other third	parties	with	which	the	Firm's	customers	do	business,	can	also	be	sources	of operational	risk	to	the	Firm,	particularly	where	activities	of	customers	are beyond	the	Firm's	security	and	control	systems,	such	as	through	the	use	of	the internet,	personal	smart	phones	and	other	mobile	devices	or	services.	As	the Firm's	interconnectivity	with	these	third	parties	increases,	the	Firm	increasingly faces	the	risk	of	operational	failure	with	respect	to	their	systems.	Security breaches	affecting	the	Firm's	customers,	or	systems	breakdowns	or	failures, security	breaches	or	employee	misconduct	affecting	such	other	third	parties,	may require	the	Firm	to	take	steps	to	protect	the	integrity	of	its	own	operational systems	or	to	safeguard	confidential	information	of	the	Firm	or	its	customers, thereby	increasing	the	Firm's	operational	costs	and	potentially	diminishing customer	satisfaction.	Furthermore,	the	interconnectivity	of	multiple	financial institutions	with	central	agents,	exchanges	and	clearing	houses,	and	the	increased importance	of	these	entities,	increases	the	risk	that	an	operational	failure	at	one institution	or	entity	may	cause	an	industry-wide	operational	failure	that	could materially	impact	the	Firm's	ability	to	conduct	business.

The	Firm's	businesses	are	subject	to	complex	and	evolving	U.S.	and	non-U.S. laws	and	regulations	governing	the	privacy	and	protection	of	personal information	of	individuals	(including	clients,	client's	clients,	employees	of	the Firm	and	its	suppliers	and	other	third	parties).	Ensuring	that	the	Firm's collection,	use,	transfer	and	storage	of	personal	information	complies	with	all applicable	laws	and	regulations,	including	where	the	laws	of	different jurisdictions	are	in	conflict,	can	increase	the	Firm's	operating	costs,	impact	the development	of	new	products	or	services	and	require	significant	oversight	by management,	and	may	require	the	Firm	to	structure	its	businesses,	operations and	systems	in	less	efficient	ways.	Furthermore,	the	Firm	may	not	be	able	to ensure	that	all	of	its	clients,	suppliers,	counterparties	and	other	third	parties	have appropriate	controls	in	place	to	protect	the	confidentiality	of	the	information exchanged	between	them	and	the	Firm,	particularly	where	such	information	is transmitted	by

electronic	means.	If	personal,	confidential	or	proprietary	information	of customers	or	clients	or	others	were	to	be	mishandled	or	misused	(in	situations where,	for	example,	such	information	was	erroneously	provided	to	parties	who are	not	permitted	to	have	the	information,	or	where	such	information	was intercepted	or	otherwise	compromised	by	third	parties),	the	Firm	could	be exposed	to	litigation	or	regulatory	sanctions.	Concerns	regarding	the effectiveness	of	the	Firm's	measures	to	safeguard	personal	information,	or	even the	perception	that	such	measures	are	inadequate,	could	cause	the	Firm	to	lose customers	or	potential	customers	for	its	products	and	services	and	thereby	reduce the	Firm's	revenues.	Accordingly,	any	failure	or	perceived	failure	by	the	Firm	to comply	with	applicable	privacy	or	data	protection	laws	and	regulations	may subject	it	to	inquiries,	examinations	and	investigations	that	could	result	in requirements	to	modify	or	cease	certain	operations	or	practices	or	in	significant liabilities,	fines	or	penalties,	and	could	damage	the	Firm's	reputation	and otherwise	adversely	affect	its	businesses.

The	Firm	may	be	subject	to	disruptions	of	its	operating	systems	arising	from events	that	are	wholly	or	partially	beyond	the	Firm's	control,	which	may	include, for	example,	security	breaches	(as	discussed	further	below);	electrical	or telecommunications	outages;	failures	of	computer	servers	or	other	damage	to	the Firm's	property	or	assets;	natural	disasters	or	severe	weather	conditions;	health emergencies	or	pandemics;	or	events	arising	from	local	or	larger-scale	political events,	including	outbreaks	of	hostilities	or	terrorist	acts.	JPMorgan	Chase maintains	a	global	resiliency	and	crisis	management	program	that	is	intended	to ensure	that	the	Firm	has	the	ability	to	recover	its	critical	business	functions	and supporting	assets,	including	staff,	technology	and	facilities,	in	the	event	of	a business	interruption.	While	the	Firm	believes	that	its	current	resiliency	plans are	both	sufficient	and	adequate,	there	can	be	no	assurance	that	such	plans	will fully	mitigate	all	potential	business	continuity	risks	to	the	Firm	or	its	customers and	clients.	Any	failures	or	disruptions	of	the	Firm's	systems	or	operations	could give	rise	to	losses	in	service	to	customers	and	clients,	adversely	affect	the	Firm's business	and	results	of	operations	by	subjecting	the	Firm	to	losses	or	liability,	or require	the	Firm	to	expend	significant	resources	to	correct	the	failure	or disruption,	as	well	as	by	exposing	the	Firm	to	litigation,	regulatory	fines	or penalties	or	losses	not	covered	by	insurance.

A	breach	in	the	security	of	JPMorgan	Chase's	systems,	or	those	of	other market	participants,	could	disrupt	the	Firm's	businesses,	result	in	the disclosure	of	confidential	information,	damage	its	reputation	and	create significant	financial	and	legal	exposure	for	the	Firm.

Although	JPMorgan	Chase	devotes	significant	resources	to	maintain	and regularly	update	its	systems	and	processes	that	are	designed	to	protect	the security	of	the	Firm's	computer	systems,	software,	networks	and	other technology	assets,	as	well	as	the	confidentiality,	integrity	and	availability	of information	belonging	to	the	Firm	and	its	customers	and	clients,	there	is	no assurance	that	all	of	the	Firm's	security	measures	will	provide	absolute	security.

JPMorgan	Chase	and	other	companies	have	reported	significant	breaches	in	the security	of	their	websites	or	other	systems,	some	of	which	have	involved sophisticated	and	targeted	attacks	intended	to	obtain	unauthorized	access	to confidential	information,	destroy	data,	disrupt	or	degrade	service,	sabotage systems	or	cause	other	damage,	including	through	the	introduction	of	computer viruses	or	malware,	cyberattacks	and	other	means.	The	Firm	is	regularly	targeted by	unauthorized	parties	using	malicious	code	and	viruses,	and	has	experienced several	significant	distributed	denial-of-service	attacks	from	technically sophisticated	and	well-resourced	third	parties	which	were	intended	to	disrupt online	banking	services.

Despite	the	Firm's	efforts	to	ensure	the	integrity	of	its	systems,	it	is	possible	that the	Firm	may	not	be	able	to	anticipate,	detect	or	recognize	threats	to	its	systems or	to	implement	effective	preventive	measures	against	all	security	breaches	of these	types	inside	or	outside	the	Firm,	especially	because	the	techniques	used change	frequently	or	are	not	recognized	until	launched,	and	because	cyberattacks can	originate	from	a	wide	variety	of	sources,	including	third	parties	outside	the Firm	such	as	persons	who	are	associated	with	external	service	providers	or	who are	or	may	be	involved	in	organized	crime	or	linked	to	terrorist	organizations	or hostile	foreign	governments.	Those	parties	may	also	attempt	to	fraudulently induce	employees,	customers,	third-party	service	providers	or	other	users	of	the Firm's	systems	to	disclose	sensitive	information	in	order	to	gain	access	to	the Firm's	data	or	that	of	its	customers	or	clients.	These	risks	may	increase	in	the future	as	the	Firm	continues	to	increase	its	mobile-payment	and	other	internet- based	product	offerings	and	expands	its	internal	usage	of	web-based	products and	applications.

A	successful	penetration	or	circumvention	of	the	security	of	the	Firm's	systems or	the	systems	of	another	market	participant	could	cause	serious	negative consequences	for	the	Firm,	including	significant	disruption	of	the	Firm's operations,	misappropriation	of	confidential	information	of	the	Firm	or	that	of	its customers,	or	damage	to	computers	or	systems	of	the	Firm	and	those	of	its customers	and	counterparties,	and	could	result	in	violations	of	applicable	privacy and	other	laws,	financial	loss	to	the	Firm	or	to	its	customers,	loss	of	confidence in	the	Firm's	security	measures,	customer	dissatisfaction,	significant	litigation exposure	and	harm	to	the	Firm's	reputation,	all	of	which	could	have	a	material adverse	effect	on	the	Firm.

# Risk	Management

# JPMorgan	Chase's	framework	for	managing	risks	and	its	risk	management procedures	and	practices	may	not	be	effective	in	identifying	and	mitigating every	risk	to	the	Firm,	thereby	resulting	in	losses.

JPMorgan	Chase's	risk	management	framework	seeks	to	mitigate	risk	and	loss	to the	Firm.	The	Firm	has	established	processes	and	procedures	intended	to identify,	measure,	monitor,	report	and	analyze	the	types	of	risk	to	which	the Firm	is	subject.	However,	as	with	any	risk	management	framework,	there	are inherent	limitations	to	the	Firm's	risk	management	strategies	because	there	may exist,	or	develop

in	the	future,	risks	that	the	Firm	has	not	appropriately	anticipated	or	identified. In	addition,	the	Firm	relies	on	data	to	aggregate	and	assess	its	various	risk exposures,	and	any	deficiencies	in	the	quality	or	effectiveness	of	the	Firm's	data aggregation	and	validation	procedures	could	result	in	ineffective	risk management	practices	or	inaccurate	risk	reporting.	Any	lapse	in	the	Firm's	risk management	framework	and	governance	structure	or	other	inadequacies	in	the design	or	implementation	of	the	Firm's	risk	management	framework, governance,	procedures,	practices,	models	or	risk	reporting	systems	could, individually	or	in	the	aggregate,	cause	unexpected	losses	for	the	Firm,	materially and	adversely	affect	the	Firm's	financial	condition	and	results	of	operations, require	significant	resources	to	remediate	any	risk	management	deficiency, attract	heightened	regulatory	scrutiny,	expose	the	Firm	to	regulatory investigations	or	legal	proceedings,	subject	the	Firm	to	fines,	penalties	or judgments,	harm	the	Firm's	reputation,	or	otherwise	cause	a	decline	in	investor confidence.

The	Firm's	products,	including	loans,	leases,	lending	commitments,	derivatives and	trading	account	assets,	as	well	as	the	investment	securities	portfolio	and	cash management	and	clearing	activities,	expose	the	Firm	to	credit	risk.	The	Firm	has exposures	arising	from	its	many	different	products	and	counterparties,	and	the credit	quality	of	the	Firm's	exposures	can	have	a	significant	impact	on	its earnings.	The	Firm	establishes	allowances	for	probable	credit	losses	inherent	in its	credit	exposure,	including	unfunded	lending-related	commitments.	The	Firm also	employs	stress	testing	and	other	techniques	to	determine	the	capital	and liquidity	necessary	to	protect	the	Firm	in	the	event	of	adverse	economic	or market	events.	These	processes	are	critical	to	the	Firm's	financial	results	and condition,	and	require	difficult,	subjective	and	complex	judgments,	including forecasts	of	how	economic	conditions	might	impair	the	ability	of	the	Firm's borrowers	and	counterparties	to	repay	their	loans	or	other	obligations.	As	is	the case	with	any	such	assessments,	there	is	always	the	possibility	that	the	Firm	will fail	to	identify	the	proper	factors	or	that	the	Firm	will	fail	to	accurately	estimate the	impact	of	factors	that	it	identifies.

JPMorgan	Chase's	market-making	businesses	may	expose	the	Firm	to unexpected	market,	credit	and	operational	risks	that	could	cause	the	Firm	to suffer	unexpected	losses.	Severe	declines	in	asset	values,	unanticipated	credit events,	or	unforeseen	circumstances	that	may	cause	previously	uncorrelated factors	to	become	correlated	(and	vice	versa)	may	create	losses	resulting	from risks	not	appropriately	taken	into	account	in	the	development,	structuring	or pricing	of	a	financial	instrument	such	as	a	derivative.

Certain	of	the	Firm's	trading	transactions	require	the	physical	settlement	by delivery	of	securities	or	other	obligations	that	the	Firm	does	not	own;	if	the	Firm is	unable	to	obtain	such	securities	or	obligations	within	the	required	timeframe for	delivery,	this	could	cause	the	Firm	to	forfeit	payments	otherwise	due	to	it	and could	result	in	settlement	delays,	which	could	damage	the	Firm's	reputation	and ability	to	transact	future	business.	In	addition,	in	situations

where	trades	are	not	settled	or	confirmed	on	a	timely	basis,	the	Firm	may	be subject	to	heightened	credit	and	operational	risk,	and	in	the	event	of	a	default,	the Firm	may	be	exposed	to	market	and	operational	losses.	In	particular,

In	addition,	disputes	with	counterparties	may	arise	regarding	the	terms	or	the settlement	procedures	of	derivative	contracts,	including	with	respect	to	the	value of	underlying	collateral,	which	could	cause	the	Firm	to	incur	unexpected	costs, including	transaction,	operational,	legal	and	litigation	costs,	or	result	in	credit losses,	all	of	which	may	impair	the	Firm's	ability	to	manage	effectively	its	risk exposure	from	these	products.

In	a	difficult	or	less	liquid	market	environment,	the	Firm's	risk	management strategies	may	not	be	effective	because	other	market	participants	may	be attempting	to	use	the	same	or	similar	strategies	to	deal	with	the	challenging market	conditions.	In	such	circumstances,	it	may	be	difficult	for	the	Firm	to reduce	its	risk	positions	due	to	the	activity	of	such	other	market	participants	or widespread	market	dislocations.

Many	of	the	Firm's	risk	management	strategies	or	techniques	have	a	basis	in historical	market	behavior,	and	all	such	strategies	and	techniques	are	based	to some	degree	on	management's	subjective	judgment.	For	example,	many	models used	by	the	Firm	are	based	on	assumptions	regarding	correlations	among	prices of	various	asset	classes	or	other	market	indicators.	In	times	of	market	stress,	or	in the	event	of	other	unforeseen	circumstances,	previously	uncorrelated	indicators may	become	correlated,	or	conversely,	previously	correlated	indicators	may make	unrelated	movements.	These	sudden	market	movements	or	unanticipated	or unidentified	market	or	economic	movements	have	in	some	circumstances	limited and	could	again	limit	the	effectiveness	of	the	Firm's	risk	management	strategies, causing	the	Firm	to	incur	losses.

Many	of	the	models	used	by	the	Firm	are	subject	to	review	not	only	by	the Firm's	Model	Risk	function	but	also	by	the	Firm's	regulators	in	order	that	the Firm	may	utilize	such	models	in	connection	with	the	Firm's	calculations	of market	risk	risk-weighted	assets	("RWA"),	credit	risk	RWA	and	operational	risk RWA	under	the	Advanced	Approach	of	Basel	III.	The	Firm	may	be	subject	to higher	capital	charges,	which	could	adversely	affect	its	financial	results	or	limit its	ability	to	expand	its	businesses,	if	such	models	do	not	receive	approval	by	its regulators.

In	addition,	the	Firm	must	comply	with	enhanced	standards	for	the	assessment and	management	of	risks	associated	with	vendors	and	other	third	parties	that provide	services	to	the	Firm.	These	requirements	apply	to	the	Firm	both	under general	guidance	issued	by	its	banking	regulators	and,	more	specifically,	under certain	of	the	consent	orders	to	which	the	Firm	has	been	subject.	The	Firm	has incurred	and	expects	to	incur	additional	costs	and	expenses	in	connection	with	its initiatives	to	address	the	risks	associated	with	oversight	of	its	third	party relationships.	Failure	by	the	Firm	to	appropriately	assess	and	manage	third	party relationships,	especially	those	involving	significant	banking	functions,	shared services	or	other	critical	activities,	could

result	in	potential	liability	to	clients	and	customers,	fines,	penalties	or	judgments imposed	by	the	Firm's	regulators,	increased	operating	expenses	and	harm	to	the Firm's	reputation,	any	of	which	could	materially	and	adversely	affect	the	Firm.

# Other	Risks

# The	financial	services	industry	is	highly	competitive,	and	JPMorgan Chase's	inability	to	compete	successfully	may	adversely	affect	its	results	of operations.

JPMorgan	Chase	operates	in	a	highly	competitive	environment,	and	the	Firm expects	that	competition	in	the	U.S.	and	global	financial	services	industry	will continue	to	be	intense.	Competitors	of	the	Firm	include	other	banks	and	financial institutions,	trading,	advisory	and	investment	management	firms,	finance companies	and	technology	companies	and	other	firms	that	are	engaged	in providing	similar	products	and	services.	Technological	advances	and	the	growth of	e-commerce	have	made	it	possible	for	non-depository	institutions	to	offer products	and	services	that	traditionally	were	banking	products,	and	for	financial institutions	and	other	companies	to	provide	electronic	and	internet-based financial	solutions,	including	electronic	securities	trading	and	payment processing.	New	technologies	have	required	and	could	require	the	Firm	to	spend more	to	modify	or	adapt	its	products	to	attract	and	retain	customers	or	to	match products	and	services	offered	by	its	competitors,	including	technology companies.

Ongoing	or	increased	competition,	on	the	basis	of	the	quality	and	variety	of products	and	services	offered,	transaction	execution,	innovation,	reputation,	price or	other	factors,	may	put	downward	pressure	on	prices	for	the	Firm's	products and	services	or	may	cause	the	Firm	to	lose	market	share.	In	addition,	the	failure of	any	of	the	Firm's	businesses	to	meet	the	expectations	of	clients	and	customers, whether	due	to	general	market	conditions	or	underperformance	(relative	to competitors	or	to	benchmarks),	could	impact	the	Firm's	ability	to	retain	clients and	customers	or	attract	new	clients	and	customers,	thereby	reducing	the	Firm's revenues.	Increased	competition	also	may	require	the	Firm	to	make	additional capital	investments	in	its	businesses,	or	to	extend	more	of	its	capital	on	behalf	of its	clients	in	order	to	remain	competitive.	The	Firm	cannot	provide	assurance	that the	significant	competition	in	the	financial	services	industry	will	not	materially and	adversely	affect	its	future	results	of	operations.

Competitors	of	the	Firm's	non-U.S.	wholesale	businesses	are	typically	subject	to different,	and	in	some	cases,	less	stringent,	legislative	and	regulatory	regimes. The	more	restrictive	laws	and	regulations	applicable	to	U.S.	financial	services institutions,	such	as	JPMorgan	Chase,	can	put	the	Firm	at	a	competitive disadvantage	to	its	non-U.S.	competitors,	including	prohibiting	the	Firm	from engaging	in	certain	transactions,	imposing	higher	capital	and	liquidity requirements	on	the	Firm,	making	the	Firm's	pricing	of	certain	transactions	more expensive	for	clients	or	adversely	affecting	the	Firm's	cost	structure	for providing	certain	products,	all	of	which	can	reduce	the	revenue	and	profitability of	the	Firm's	wholesale	businesses.

# JPMorgan	Chase's	ability	to	attract	and	retain	qualified	employees	is critical	to	its	success.

JPMorgan	Chase's	employees	are	the	Firm's	most	important	resource,	and	in many	areas	of	the	financial	services	industry,	competition	for	qualified	personnel is	intense.	The	Firm	endeavors	to	attract	talented	and	diverse	new	employees	and retain	and	motivate	its	existing	employees.	The	Firm	also	seeks	to	retain	a pipeline	of	senior	employees	with	superior	talent,	augmented	from	time	to	time by	external	hires,	to	provide	continuity	of	succession	for	the	Firm's	Operating Committee,	including	the	Chief	Executive	Officer	position,	and	senior	positions below	the	Operating	Committee.	The	Firm	regularly	reviews	candidates	for senior	management	positions	to	assess	whether	they	currently	are	ready	for	a next-level	role.	In	addition,	the	Firm's	Board	of	Directors	is	deeply	involved	in succession	planning,	including	review	of	the	succession	plans	for	the	Chief Executive	Officer	and	the	members	of	the	Operating	Committee.	If	for	any reason	the	Firm	were	unable	to	continue	to	attract	or	retain	qualified	employees, including	successors	to	the	Chief	Executive	Officer	or	members	of	the	Operating Committee,	the	Firm's	performance,	including	its	competitive	position,	could	be materially	and	adversely	affected.

# JPMorgan	Chase's	financial	statements	are	based	in	part	on	estimates	and judgments	which,	if	incorrect,	could	result	in	unexpected	losses	in	the future.

Under	accounting	principles	generally	accepted	in	the	U.S.	("U.S.	GAAP"), JPMorgan	Chase	is	required	to	use	estimates	and	apply	judgments	in	preparing its	financial	statements,	including	in	determining	allowances	for	credit	losses	and reserves	related	to	litigation,	among	other	items.	Certain	of	the	Firm's	financial instruments,	including	trading	assets	and	liabilities,	instruments	in	the	investment securities	portfolio,	certain	loans,	MSRs,	structured	notes	and	certain	repurchase and	resale	agreements,	among	other	items,	require	a	determination	of	their	fair value	in	order	to	prepare	the	Firm's	financial	statements.	Where	quoted	market prices	are	not	available,	the	Firm	may	make	fair	value	determinations	based	on internally	developed	models	or	other	means	which	ultimately	rely	to	some degree	on	management	estimates	and	judgment.	In	addition,	sudden	illiquidity	in markets	or	declines	in	prices	of	certain	loans	and	securities	may	make	it	more difficult	to	value	certain	balance	sheet	items,	which	may	lead	to	the	possibility that	such	valuations	will	be	subject	to	further	change	or	adjustment.	If	estimates or	judgments	underlying	the	Firm's	financial	statements	are	incorrect,	the	Firm may	experience	material	losses.

# Lapses	in	disclosure	controls	and	procedures	or	internal	control	over financial	reporting	could	materially	and	adversely	affect	the	Firm's operations,	profitability	or	reputation.

There	can	be	no	assurance	that	the	Firm's	disclosure	controls	and	procedures	will be	effective	in	every	circumstance	or	that	a	material	weakness	or	significant deficiency	in	internal	control	over	financial	reporting	will	not	occur.	Any	such lapses	or	deficiencies	may	materially

and	adversely	affect	the	Firm's	business	and	results	of	operations	or	financial condition,	restrict	its	ability	to	access	the	capital	markets,	require	the	Firm	to expend	significant	resources	to	correct	the	lapses	or	deficiencies,	expose	the Firm	to	regulatory	or	legal	proceedings,	subject	it	to	fines,	penalties	or judgments,	harm	the	Firm's	reputation,	or	otherwise	cause	a	decline	in	investor confidence.

# Damage	to	JPMorgan	Chase's	reputation	could	damage	its	businesses.

Maintaining	trust	in	JPMorgan	Chase	is	critical	to	the	Firm's	ability	to	attract	and maintain	customers,	investors	and	employees.	Damage	to	the	Firm's	reputation can	therefore	cause	significant	harm	to	the	Firm's	business	and	prospects.	Harm to	the	Firm's	reputation	can	arise	from	numerous	sources,	including,	among others,	employee	misconduct,	security	breaches,	compliance	failures,	litigation	or regulatory	outcomes	or	governmental	investigations.	The	Firm's	reputation	could also	be	harmed	by	the	failure	or	perceived	failure	of	an	affiliate,	joint-venturer	or merchant	banking	portfolio	company,	or	a	vendor	or	other	third	party	with	which the	Firm	does	business,	to	comply	with	laws	or	regulations.	In	addition,	a	failure or	perceived	failure	to	deliver	appropriate	standards	of	service	and	quality,	to treat	customers	and	clients	fairly,	to	provide	fiduciary	products	or	services	in accordance	with	the	appropriate	standards,	or	to	handle	or	use	confidential information	of	customers	or	clients	appropriately	or	in	compliance	with applicable	data	protection	and	privacy	laws	and	regulations	can	result	in customer	dissatisfaction,	litigation	and	heightened	regulatory	scrutiny,	all	of which	can	lead	to	lost	revenue,	higher	operating	costs	and	harm	to	the	Firm's reputation.	Adverse	publicity	or	negative	information	posted	on	social	media websites	regarding	the	Firm,	whether	or	not	true,	may	result	in	harm	to	the Firm's	prospects.

Management	of	potential	conflicts	of	interests	has	become	increasingly	complex as	the	Firm	continues	to	expand	its	business	activities	through	more	numerous transactions,	obligations	and	interests	with	and	among	the	Firm's	clients.	The failure	or	perceived	failure	to	adequately	address	or	appropriately	disclose conflicts	of	interest	has	given	rise	to	litigation	and	enforcement	actions	and	may do	so	in	the	future	and	could	affect	the	willingness	of	clients	to	deal	with	the Firm,	as	well	as	cause	serious	harm	to	the	Firm's	reputation.

Actions	by	the	financial	services	industry	generally	or	by	certain	members	of	or individuals	in	the	industry	can	also	affect	the	Firm's	reputation.	For	example,	the role	played	by	financial	services	firms	during	the	financial	crisis,	including concerns	that	consumers	have	been	treated	unfairly	by	financial	institutions,	has damaged	the	reputation	of	the	industry	as	a	whole.	Should	any	of	these	or	other events	or	factors	that	can	undermine	the	Firm's	reputation	occur,	there	is	no assurance	that	the	additional	costs	and	expenses	that	the	Firm	may	need	to	incur to	address	the	issues	giving	rise	to	the	damage	to	its	reputation	could	not adversely	affect	the	Firm's	earnings	and	results	of	operations,	or	that	damage	to the	Firm's	reputation	will	not	impair	the	Firm's	ability	to	retain	its	existing	or attract	new	customers,	investors	and	employees.

# ITEM	1B:	UNRESOLVED	SEC	STAFF	COMMENTS

None.

# ITEM	2:	PROPERTIES

JPMorgan	Chase's	headquarters	is	located	in	New	York	City	at	270	Park Avenue,	a	50-story	office	building	it	owns.

The	Firm	owned	or	leased	facilities	in	the	following	locations	at	December	31, 2015.

states.

(b) In	2008,	JPMorgan	Chase	acquired	a	999-year	leasehold	interest	in	land	at	London's	Canary	Wharf.	JPMorgan

Chase	has	a	building	agreement	in	place	through	October	30,	2016,	to	develop	the	Canary	Wharf	site	for	future use.

The	properties	occupied	by	JPMorgan	Chase	are	used	across	all	of	the	Firm's business	segments	and	for	corporate	purposes.	JPMorgan	Chase	continues	to evaluate	its	current	and	projected	space	requirements	and	may	determine	from time	to	time	that	certain	of	its	premises	and	facilities	are	no	longer	necessary	for its	operations.	There	is	no	assurance	that	the	Firm	will	be	able	to	dispose	of	any such	excess	premises	or	that	it	will	not	incur	charges	in	connection	with	such dispositions.	Such	disposition	costs	may	be	material	to	the	Firm's	results	of operations	in	a	given	period.	For	information	on	occupancy	expense,	see	the Consolidated	Results	of	Operations	on	pages	72–74.

# ITEM	3:	LEGAL	PROCEEDINGS

For	a	description	of	the	Firm's	material	legal	proceedings,	see	Note	31.

# ITEM	4:	MINE	SAFETY	DISCLOSURES

Not	applicable.

# Part	II

# ITEM	5:	MARKET	FOR	REGISTRANT'S	COMMON

# EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND

# ISSUER	PURCHASES	OF	EQUITY	SECURITIES

# Market	for	registrant's	common	equity

The	outstanding	shares	of	JPMorgan	Chase	common	stock	are	listed	and	traded on	the	New	York	Stock	Exchange	and	the	London	Stock	Exchange.	For	the quarterly	high	and	low	prices	of	and	cash	dividends	declared	on	JPMorgan Chase's	common	stock	for	the	last	two	years,	see	the	section	entitled "Supplementary	information	–	Selected	quarterly	financial	data	(unaudited)"	on pages	309–310.	For	a	comparison	of	the	cumulative	total	return	for	JPMorgan Chase	common	stock	with	the	comparable	total	return	of	the	S&P	500	Index,	the KBW	Bank	Index	and	the	S&P	Financial	Index	over	the	five-year	period	ended December	31,	2015,	see	"Five-year	stock	performance", on	page	67.

For	information	on	the	common	dividend	payout	ratio,	see	Capital	actions	in	the Capital	Management	section	of	Management's	discussion	and	analysis	on	page 157.	For	a	discussion	of	restrictions	on	dividend	payments,	see	Note	22	and	Note 27.	At	January	31,	2016,	there	were	200,881	holders	of	record	of	JPMorgan Chase	common	stock.	For	information	regarding	securities	authorized	for issuance	under	the	Firm's	employee	stock-based	compensation	plans,	see	Part III,	Item	12	on	page	23.

# Repurchases	under	the	common	equity	repurchase	program

For	information	regarding	repurchases	under	the	Firm's	common	equity repurchase	program,	see	Capital	actions	in	the	Capital	Management	section	of Management's	discussion	and	analysis	on	page	157.

Shares	repurchased,	on	a	settlement-date	basis,	pursuant	to	the	common	equity	repurchase	program	during	2015	were	as	follows.

| Year	ended	December	31,	2015 | Total	shares	of<br>common	stock<br>repurchased | Average	price<br>paid	per	share	of<br>common	stock(b) | Aggregate	repurchases<br>of	common	equity	(in<br>millions)(b) | Dollar	value<br>of	remaining<br>authorized<br>repurchase<br>(in	millions)(b) |
| :--- | :--- | :--- | :--- | :--- |
| First\tquarter | 32,531,294 | $58.40 | $1,900 | $1,984 |
| Second\tquarter(a) | 19,129,714 | 65.32 | 1,249 | 5,180 |
| Third\tquarter | 19,100,389 | 65.30 | 1,248 | 3,932 |
| October | 9,247,060 | 61.42 | 567 | 3,365 |
| November | 4,511,071 | 66.44 | 300 | 3,065 |
| December | 5,321,146 | 66.12 | 352 | 2,713 |
| Fourth\tquarter | 19,079,277 | 63.92 | 1,219 | 2,713 |
| Year-to-date | 89,840,674 | $62.51 | $5,616 | $2,713 |

(a) The	unused	portion	under	the	prior	Board	authorization	was	canceled	when	the	$6.4	billion	program	was	authorized.	Repurchases	during	the	second	quarter	included	$29	million	under	the	prior program.

(b) Excludes	commissions	cost.

(c) Dollar	value	remaining	under	the	$6.4	billion	program.

# ITEM	6:	SELECTED	FINANCIAL	DATA

For	five-year	selected	financial	data,	see	"Five-year	summary	of	consolidated financial	highlights	(unaudited)"	on	page	66.

# ITEM	7:	MANAGEMENT'S	DISCUSSION	AND	ANALYSIS OF	FINANCIAL	CONDITION	AND	RESULTS	OF OPERATIONS

Management's	discussion	and	analysis	of	financial	condition	and	results	of operations,	entitled	"Management's	discussion	and	analysis,"	appears	on	pages 68–173.	Such	information	should	be	read	in	conjunction	with	the	Consolidated Financial	Statements	and	Notes	thereto,	which	appear	on	pages	176–308.

# ITEM	7A:	QUANTITATIVE	AND	QUALITATIVE DISCLOSURES	ABOUT	MARKET	RISK

For	a	discussion	of	the	quantitative	and	qualitative	disclosures	about	market	risk, see	the	Market	Risk	Management	section	of	Management's	discussion	and analysis	on	pages	133–139.

# ITEM	8:	FINANCIAL	STATEMENTS	AND SUPPLEMENTARY	DATA

The	Consolidated	Financial	Statements,	together	with	the	Notes	thereto	and	the report	thereon	dated	February	23,	2016,	of	PricewaterhouseCoopers	LLP,	the Firm's	independent	registered	public	accounting	firm,	appear	on	pages	175–308.

Supplementary	financial	data	for	each	full	quarter	within	the	two	years	ended December	31,	2015,	are	included	on	pages	309–310	in	the	table	entitled "Selected	quarterly	financial	data	(unaudited)."	Also	included	is	a	"Glossary	of terms''	on	pages	311–315.

# ITEM	9:	CHANGES	IN	AND	DISAGREEMENTS	WITH ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL DISCLOSURE

# ITEM	9A:	CONTROLS	AND	PROCEDURES

The	internal	control	framework	promulgated	by	the	Committee	of	Sponsoring Organizations	of	the	Treadway	Commission	("COSO"),	"Internal	Control	— Integrated	Framework"	("COSO	2013")	provides	guidance	for	designing, implementing	and	conducting	internal	control	and	assessing	its	effectiveness. The	Firm	used	the	COSO	2013	framework	to	assess	the	effectiveness	of	the Firm's	internal	control	over	financial	reporting	as	of	December	31,	2015.	See "Management's	report	on	internal	control	over	financial	reporting"	on	page	174.

As	of	the	end	of	the	period	covered	by	this	report,	an	evaluation	was	carried	out under	the	supervision	and	with	the	participation	of	the	Firm's	management, including	its	Chairman	and	Chief	Executive	Officer	and	its	Chief	Financial Officer,	of	the	effectiveness	of	its	disclosure	controls	and	procedures	(as	defined in	Rule	13a-15(e)	under	the	Securities	Exchange	Act	of	1934).	Based	on	that evaluation,	the	Chairman	and	Chief	Executive	Officer	and	the	Chief	Financial Officer	concluded	that	these	disclosure	controls	and	procedures	were	effective. See	Exhibits	31.1	and	31.2	for	the	Certification	statements	issued	by	the Chairman	and	Chief	Executive	Officer	and	Chief	Financial	Officer.

The	Firm	is	committed	to	maintaining	high	standards	of	internal	control	over financial	reporting.	Nevertheless,	because	of	its	inherent	limitations,	internal control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	In addition,	in	a	firm	as	large	and	complex	as	JPMorgan	Chase,	lapses	or deficiencies	in	internal	controls	may	occur	from	time	to	time,	and	there	can	be	no assurance	that	any	such	deficiencies	will	not	result	in	significant	deficiencies	or material	weaknesses	in	internal	control	in	the	future.	For	further	information,	see "Management's	report	on	internal	control	over	financial	reporting"	on	page	174. There	was	no	change	in	the	Firm's	internal	control	over	financial	reporting	(as defined	in	Rule	13a-15(f)	under	the	Securities	Exchange	Act	of	1934)	that occurred	during	the	three	months	ended	December	31,

2015,	that	has	materially	affected,	or	is	reasonably	likely	to	materially	affect,	the Firm's	internal	control	over	financial	reporting.

# ITEM	9B:	OTHER	INFORMATION

Pursuant	to	Section	219	of	the	Iran	Threat	Reduction	and	Syria	Human	Rights Act	of	2012,	which	added	Section	13(r)	to	the	Securities	Exchange	Act	of	1934, an	issuer	is	required	to	disclose	in	its	annual	or	quarterly	reports,	as	applicable, whether	it	or	any	of	its	affiliates	knowingly	engaged	in	certain	activities, transactions	or	dealings	relating	to	Iran	or	with	individuals	or	entities	designated pursuant	to	certain	Executive	Orders.	Disclosure	is	generally	required	even where	the	activities,	transactions	or	dealings	were	conducted	in	compliance	with applicable	law.	Except	as	set	forth	below,	as	of	the	date	of	this	report,	the	Firm	is not	aware	of	any	other	activity,	transaction	or	dealing	by	any	of	its	affiliates during	the	year	ended	December	31,	2015	that	requires	disclosure	under	Section 219.

During	2015,	JPMorgan	Chase	Bank,	N.A.	processed	one	payment	from	Iran Airtours	on	behalf	of	a	U.S.	client	into	such	client's	account	at	JPMorgan	Chase Bank,	N.A.	Iran	Airtours	is	a	subsidiary	of	Iran	Air,	which,	at	the	time	of	the payment,	was	designated	pursuant	to	Executive	Order	13382.	This	transaction was	authorized	by	and	conducted	pursuant	to	a	license	from	the	Treasury Department's	OFAC.	JPMorgan	Chase	Bank,	N.A.	charged	a	fee	of	U.S.	dollar $4.25	for	this	transaction.	JPMorgan	Chase	Bank,	N.A.	may	in	the	future	engage in	similar	transactions	for	its	clients	to	the	extent	permitted	by	U.S.	law.

# Part	III

# ITEM	10:	DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

# Executive	officers	of	the	registrant

(a)	On	January	1,	2016,	Ms.	Friedman	was	named	General	Counsel	and	appointed	to	the	Operating	Committee.	At	that	date,	Mr.	Cutler	became	Vice	Chairman	of	JPMorgan	Chase	and retired	from	the	Operating	Committee;	he	is	no	longer	an	executive	officer	of	the	registrant.

Unless	otherwise	noted,	during	the	five	fiscal	years	ended	December	31,	2015,	all	of	JPMorgan	Chase's	above-named	executive	officers	have	continuously	held	senior- level	positions	with	JPMorgan	Chase.	There	are	no	family	relationships	among	the	foregoing	executive	officers.	Information	to	be	provided	in	Items	10,	11,	12,	13	and 14	of	the	Form	10-K	and	not	otherwise	included	herein	is	incorporated	by	reference	to	the	Firm's	definitive	proxy	statement	for	its	2016	Annual	Meeting	of	Stockholders to	be	held	on	May	17,	2016,	which	will	be	filed	with	the	SEC	within	120	days	of	the	end	of	the	Firm's	fiscal	year	ended	December	31,	2015.

# ITEM	11:	EXECUTIVE	COMPENSATION

# ITEM	12:	SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED

# STOCKHOLDER	MATTERS

For	security	ownership	of	certain	beneficial	owners	and	management,	see	Item	10.

The	following	table	sets	forth	the	total	number	of	shares	available	for	issuance	under	JPMorgan	Chase's	employee	stock-based	incentive	plans	(including	shares available	for	issuance	to	nonemployee	directors).	The	Firm	is	not	authorized	to	grant	stock-based	incentive	awards	to	nonemployees,	other	than	to	nonemployee directors.

|  |  | Weighted-average | Number	of	shares	remaining | Number	of	shares	remaining |
| :--- | :--- | :--- | :--- | :--- |
|  | Number\tof\tshares\tto\tbe\tissued | exercise\tprice\tof | available\tfor\tfuture\tissuance | available\tfor\tfuture\tissuance |
|  | upon\texercise\tof\toutstanding | outstanding | under\tstock\tcompensation | under\tstock\tcompensation |
| December\t31,\t2015 | options/stock\tappreciation\trights | options/stock\tappreciation\trights | plans |  |
| Plan\tcategory |  |  |  |  |
| Employee\tstock-based\tincentive\tplans\tapproved\tby\tshareholders | 43,466,314 | $43.51 | 93,491,401 | (a) |
| Total | 43,466,314 | $43.51 | 93,491,401 |  |

(a) Represents	future	shares	available	under	the	shareholder-approved	Long-Term	Incentive	Plan,	as	amended	and	restated	effective	May	19,	2015.

All	future	shares	will	be	issued	under	the	shareholder-approved	Long-Term Incentive	Plan,	as	amended	and	restated	effective	May	19,	2015.	For	further discussion,	see	Note	10.

ITEM	13:	CERTAIN	RELATIONSHIPS	AND	RELATED TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

# ITEM	14:	PRINCIPAL	ACCOUNTING	FEES	AND	SERVICES

# Part	IV

# ITEM	15:	EXHIBITS,	FINANCIAL	STATEMENT

# SCHEDULES

Exhibits,	financial	statement	schedules

3.2 Amendment	to	the	Restated	Certificate	of	Incorporation	of JPMorgan	Chase	&	Co.,	effective	June	7,	2013	(incorporated	by reference	to	Appendix	F	to	the	Proxy	Statement	on	Schedule 14A	of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	filed	April	10, 2013).

3.3 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	I	(incorporated	by	reference to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan Chase	&	Co.	(File	No.	1-5805)	filed	April	24,	2008).

3.4 Certificate	of	Designations	for	5.50%	Non-Cumulative Preferred	Stock,	Series	O	(incorporated	by	reference	to	Exhibit 3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan	Chase	& Co.	(File	No.	1-5805)	filed	August	27,	2012).

3.5 Certificate	of	Designations	for	5.45%	Non-Cumulative Preferred	Stock,	Series	P	(incorporated	by	reference	to	Exhibit 3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan	Chase	& Co.	(File	No.	1-5805)	filed	February	5,	2013).

3.6 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	Q	(incorporated	by reference	to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of JPMorgan	Chase	&	Co.	(File	No.	1-5805)	filed	April	23,	2013).

3.7 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	R	(incorporated	by	reference to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan Chase	&	Co.	(File	No.	1-5805)	filed	July	29,	2013).

3.8 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	S	(incorporated	by	reference to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan Chase	&	Co.	(File	No.	1-5805)	filed	January	22,	2014).

3.9 Certificate	of	Designations	for	6.70%	Non-Cumulative Preferred	Stock,	Series	T	(incorporated	by	reference	to	Exhibit 3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan	Chase	& Co.	(File	No.	1-5805)	filed	January	30,	2014).

3.10 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	U	(incorporated	by reference	to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of JPMorgan	Chase	&	Co.	(File	No.	1-5805)	filed	on	March	10, 2014).

3.11 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	V	(incorporated	by reference	to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of JPMorgan	Chase	&	Co.	(File	No.	1-5805)	filed	on	June	9,	2014).

3.12 Certificate	of	Designations	for	6.30%	Non-Cumulative Preferred	Stock,	Series	W	(incorporated	by	reference	to	Exhibit 3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan	Chase	& Co.	(File	No.	1-5805)	filed	on	June	23,	2014).

3.13 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	X	(incorporated	by reference	to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of JPMorgan	Chase	&	Co.	(File	No.	1-5805)	filed	on	September 23,	2014).

3.14 Certificate	of	Designations	for	6.125%	Non-Cumulative Preferred	Stock,	Series	Y	(incorporated	by	reference	to	Exhibit 3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan	Chase	& Co.	(File	No.	1-5805)	filed	February	17,	2015).

3.15 Certificate	of	Designations	for	Fixed-to-Floating	Rate	Non- Cumulative	Preferred	Stock,	Series	Z	(incorporated	by	reference to	Exhibit	3.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan Chase	&	Co.	(File	No.	1-5805)	filed	April	21,	2015).

4.1 Indenture,	dated	as	of	October	21,	2010,	between	JPMorgan Chase	&	Co.	and	Deutsche	Bank	Trust	Company	Americas,	as Trustee	(incorporated	by	reference	to	Exhibit	4.1	to	the	Current Report	on	Form	8-K	of	JPMorgan	Chase	&	Co.	(File	No.1-5805) filed	October	21,	2010).

4.2 Subordinated	Indenture,	dated	as	of	March	14,	2014,	between JPMorgan	Chase	&	Co.	and	U.S.	Bank	Trust	National Association,	as	Trustee	(incorporated	by	reference	to	Exhibit	4.1 to	the	Current	Report	on	Form	8-K	of	JPMorgan	Chase	&	Co. (File	No.1-5805)	filed	March	14,	2014).

4.3 Indenture,	dated	as	of	May	25,	2001,	between	JPMorgan	Chase &	Co.	and	Bankers	Trust	Company	(succeeded	by	Deutsche Bank	Trust	Company	Americas),	as	Trustee	(incorporated	by reference	to	Exhibit	4(a)(1)	to	the	Registration	Statement	on Form	S-3	of	JPMorgan	Chase	&	Co.	(File	No.	333-52826)	filed June	13,	2001).

4.4 Form	of	Deposit	Agreement	(incorporated	by	reference	to Exhibit	4.3	to	the	Registration	Statement	on	Form	S-3	of JPMorgan	Chase	&	Co.	(File	No.	333-191692)	filed	October	11, 2013).

4.5 Form	of	Warrant	to	purchase	common	stock	(incorporated	by reference	to	Exhibit	4.2	to	the	Form	8-A	of	JPMorgan	Chase	& Co.	(File	No.	1-5805)	filed	December	11,	2009).

Other	instruments	defining	the	rights	of	holders	of	long-term	debt	securities	of JPMorgan	Chase	&	Co.	and	its	subsidiaries	are	omitted	pursuant	to	Section	(b) (4)(iii)(A)	of	Item	601	of	Regulation	S-K.	JPMorgan	Chase	&	Co.	agrees	to furnish	copies	of	these	instruments	to	the	SEC	upon	request.

10.1 Deferred	Compensation	Plan	for	Non-Employee	Directors	of JPMorgan	Chase	&	Co.,	as	amended	and	restated	July	2001	and as	of	December	31,	2004	(incorporated	by	reference	to	Exhibit 10.1	to	the	Annual	Report	on	Form	10-K	of	JPMorgan	Chase	& Co.	(File	No.	1-5805)	for	the	year	ended	December	31,	2007).(a)

10.2 2005	Deferred	Compensation	Plan	for	Non-Employee	Directors of	JPMorgan	Chase	&	Co.,	effective	as	of	January	1,	2005 (incorporated	by	reference	to	Exhibit	10.2	to	the	Annual	Report on	Form	10-K	of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for the	year	ended	December	31,	2007).(a)

2005	Deferred	Compensation	Program	of	JPMorgan	Chase	& Co.,	restated	effective	as	of	December	31,	2008	(incorporated by	reference	to	Exhibit	10.4	to	the	Annual	Report	on	Form	10-K of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year	ended December	31,	2008).(a)

10.4 JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan	as	amended and	restated	effective	May	19,	2015	(incorporated	by	reference to	Appendix	C	of	the	Schedule	14A	of	JPMorgan	Chase	&	Co. (File	No.	1-5805)	filed	April	8,	2015).(a)

10.5 Key	Executive	Performance	Plan	of	JPMorgan	Chase	&	Co.,	as amended	and	restated	effective	January	1,	2014	(incorporated	by reference	to	Appendix	G	of	the	Schedule	14A	of	JPMorgan Chase	&	Co.	(File	No.	1-5805)	filed	April	10,	2013).(a)

10.6 Excess	Retirement	Plan	of	JPMorgan	Chase	&	Co.,	restated	and amended	as	of	December	31,	2008,	as	amended	(incorporated	by reference	to	Exhibit	10.7	to	the	Annual	Report	on	Form	10-K	of JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year	ended December	31,	2009).(a)

10.7 1995	Stock	Incentive	Plan	of	J.P.	Morgan	&	Co.	Incorporated and	Affiliated	Companies,	as	amended,	dated	December	11, 1996	(incorporated	by	reference	to	Exhibit	10.8	to	the	Annual Report	on	Form	10-K	of	JPMorgan	Chase	&	Co.	(File	No.	1- 5805)	for	the	year	ended	December	31,	2008).(a)

10.8 Executive	Retirement	Plan	of	JPMorgan	Chase	&	Co.,	as amended	and	restated	December	31,	2008	(incorporated	by reference	to	Exhibit	10.9	to	the	Annual	Report	on	Form	10-K	of JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year	ended December	31,	2008).(a)

10.9 Bank	One	Corporation	Stock	Performance	Plan,	as	amended	and restated	effective	February	20,	2001	(incorporated	by	reference to	Exhibit	10.12	to	the	Annual	Report	on	Form	10-K	of JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year	ended December	31,	2008).(a)

10.10 Bank	One	Corporation	Supplemental	Savings	and	Investment Plan,	as	amended	and	restated	effective	December	31,	2008 (incorporated	by	reference	to	Exhibit	10.13	to	the	Annual Report	on	Form	10-K	of	JPMorgan	Chase	&	Co.	(File	No.	1- 5805)	for	the	year	ended	December	31,	2008).(a)

Banc	One	Corporation	Revised	and	Restated	1995	Stock Incentive	Plan,	effective	April	17,	1995	(incorporated	by reference	to	Exhibit	10.15	to	the	Annual	Report	on	Form	10-K of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year	ended December	31,	2008).(a)

10.12 Form	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Award	Agreement	of	January	22,	2008	stock	appreciation	rights (incorporated	by	reference	to	Exhibit	10.25	to	the	Annual Report	on	Form	10-K	of	JPMorgan	Chase	&	Co.	(File	No.	1- 5805)	for	the	year	ended	December	31,	2007).(a)

Forms	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	&	Conditions	for	restricted	stock	units	for	Operating Committee	members	(U.S.,	E.U.	and	U.K.),	dated	as	of	January 20,	2015	(incorporated	by	reference	to	Exhibit	10.1	to	the Quarterly	Report	on	Form	10-Q	of	JPMorgan	Chase	&	Co.	(File No.	1-5805)	for	the	quarter	ended	March	31,	2015).(a)

10.13 Form	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Award	Agreement	of	January	22,	2008	stock	appreciation	rights for	James	Dimon	(incorporated	by	reference	to	Exhibit	10.27	to the	Annual	Report	on	Form	10-K	of	JPMorgan	Chase	&	Co. (File	No.	1-5805)	for	the	year	ended	December	31,	2007).(a)

10.14 Form	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	and	Conditions	for	stock	appreciation	rights,	dated	as	of January	20,	2009	(incorporated	by	reference	to	Exhibit	10.20	to the	Annual	Report	on	Form	10-K	of	JPMorgan	Chase	&	Co. (File	No.	1-5805)	for	the	year	ended	December	31,	2008).(a)

10.15 Form	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	and	Conditions	for	Operating	Committee	member	stock appreciation	rights,	dated	as	of	January	20,	2009	(incorporated by	reference	to	Exhibit	10.21	to	the	Annual	Report	on	Form	10- K	of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year ended	December	31,	2008).(a)

10.16 Form	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	and	Conditions	for	Operating	Committee	member	stock appreciation	rights,	dated	as	of	February	3,	2010	(incorporated by	reference	to	Exhibit	10.23	to	the	Annual	Report	on	Form	10- K	of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year ended	December	31,	2009).(a)

10.17 Forms	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	and	Conditions	for	stock	appreciation	rights	and restricted	stock	units,	dated	as	of	January	18,	2012	(incorporated by	reference	to	Exhibit	10.25	to	the	Annual	Report	on	Form	10- K	of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the	year ended	December	31,	2011).(a)

10.18 Forms	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	and	Conditions	for	stock	appreciation	rights	and restricted	stock	units	for	Operating	Committee	members,	dated as	of	January	17,	2013	(incorporated	by	reference	to	Exhibit 10.23	to	the	Annual	Report	on	Form	10-K	of	JPMorgan	Chase &	Co.	(File	No.	1-5805)	for	the	year	ended	December	31, 2012).(a) 10.19 Form	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	and	Conditions	for	restricted	stock	units	for	Operating Committee	members,	dated	as	of	January	22,	2014	(incorporated by	reference	to	Exhibit	10.1	to	the	Quarterly	Report	on	Form 10-Q	of	JPMorgan	Chase	&	Co.	(File	No.	1-5805)	for	the quarter	ended	March	31,	2014).(a) 31.1 31.2 32

10.21 Form	of	JPMorgan	Chase	&	Co.	Long-Term	Incentive	Plan Terms	and	Conditions	for	restricted	stock	units	for	Operating Committee	members,	dated	as	of	January	19,	2016.(a)(b)

(a) This	exhibit	is	a	management	contract	or	compensatory	plan	or	arrangement.

(b) Filed	herewith.

(c) Furnished	herewith.	This	exhibit	shall	not	be	deemed	"filed"	for	purposes	of	Section	18	of the	Securities	Exchange	Act	of	1934,	or	otherwise	subject	to	the	liability	of	that	Section. Such	exhibit	shall	not	be	deemed	incorporated	into	any	filing	under	the	Securities	Act	of 1933	or	the	Securities	Exchange	Act	of	1934.

(d) Pursuant	to	Rule	405	of	Regulation	S-T,	includes	the	following	financial	information included	in	the	Firm's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31, 2015,	formatted	in	XBRL	(eXtensible	Business	Reporting	Language)	interactive	data	files: (i)	the	Consolidated	statements	of	income	for	the	years	ended	December	31,	2015,	2014 and	2013,	(ii)	the	Consolidated	statements	of	comprehensive	income	for	the	years	ended December	31,	2015,	2014	and	2013,	(iii)	the	Consolidated	balance	sheets	as	of December	31,	2015	and	2014,	(iv)	the	Consolidated	statements	of	changes	in	stockholders' equity	for	the	years	ended	December	31,	2015,	2014	and	2013,	(v)	the	Consolidated statements	of	cash	flows	for	the	years	ended	December	31,	2015,	2014	and	2013,	and	(vi) the	Notes	to	Consolidated	Financial	Statements.

# Table	of	contents

# Financial:

72 Consolidated	Results	of	Operations

75 Consolidated	Balance	Sheets	Analysis

79 Consolidated	Cash	Flows	Analysis

# Supplementary	information:

173 Forward-Looking	Statements

JPMorgan	Chase	&	Co./2015	Annual	Report

# FIVE-YEAR	SUMMARY	OF	CONSOLIDATED	FINANCIAL	HIGHLIGHTS

| (in	millions,	except	per	share,	ratio,	headcount	data	and	where	otherwise	noted) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Selected\tincome\tstatement\tdata |  |  |  |  |  |
| Total\tnet\trevenue | $93,543 | $95,112 | $97,367 | $97,680 | $97,843 |
| Total\tnoninterest\texpense | 59,014 | 61,274 | 70,467 | 64,729 | 62,911 |
| Pre-provision\tprofit | 34,529 | 33,838 | 26,900 | 32,951 | 34,932 |
| Provision\tfor\tcredit\tlosses | 3,827 | 3,139 | 225 | 3,385 | 7,574 |
| Income\tbefore\tincome\ttax\texpense | 30,702 | 30,699 | 26,675 | 29,566 | 27,358 |
| Income\ttax\texpense | 6,260 | 8,954 | 8,789 | 8,307 | 8,402 |
| Net\tincome | $24,442 | $21,745 | $17,886 | $21,259 | $18,956 |
| Earnings\tper\tshare\tdata |  |  |  |  |  |
| Net\tincome:\tBasic | $6.05 | $5.33 | $4.38 | $5.21 | $4.50 |
| \t\t\t\t\t\t\t\t\t\t\tDiluted | 6.00 | 5.29 | 4.34 | 5.19 | 4.48 |
| Average\tshares:\tBasic | 3,700.4 | 3,763.5 | 3,782.4 | 3,809.4 | 3,900.4 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tDiluted | 3,732.8 | 3,797.5 | 3,814.9 | 3,822.2 | 3,920.3 |
| Market\tand\tper\tcommon\tshare\tdata |  |  |  |  |  |
| Market\tcapitalization | $241,899 | $232,472 | $219,657 | $167,260 | $125,442 |
| Common\tshares\tat\tperiod-end | 3,663.5 | 3,714.8 | 3,756.1 | 3,804.0 | 3,772.7 |
| Share\tprice(a) |  |  |  |  |  |
| High | $70.61 | $63.49 | $58.55 | $46.49 | $48.36 |
| Low | 50.07 | 52.97 | 44.20 | 30.83 | 27.85 |
| Close | 66.03 | 62.58 | 58.48 | 43.97 | 33.25 |
| Book\tvalue\tper\tshare | 60.46 | 56.98 | 53.17 | 51.19 | 46.52 |
| Tangible\tbook\tvalue\tper\tshare\t("TBVPS")(b) | 48.13 | 44.60 | 40.72 | 38.68 | 33.62 |
| Cash\tdividends\tdeclared\tper\tshare | 1.72 | 1.58 | 1.44 | 1.20 | 1.00 |
| Selected\tratios\tand\tmetrics |  |  |  |  |  |
| Return\ton\tcommon\tequity\t("ROE") | 11% | 10% | 9% | 11% | 11% |
| Return\ton\ttangible\tcommon\tequity\t("ROTCE")(b) | 13 | 13 | 11 | 15 | 15 |
| Return\ton\tassets\t("ROA") | 0.99 | 0.89 | 0.75 | 0.94 | 0.86 |
| Overhead\tratio | 63 | 64 | 72 | 66 | 64 |
| Loans-to-deposits\tratio | 65 | 56 | 57 | 61 | 64 |
| High\tquality\tliquid\tassets\t("HQLA")\t(in\tbillions)(c) | $496 | $600 | $522 | 341 | NA |
| Common\tequity\ttier\t1\t("CET1")\tcapital\tratio(d) | 11.8% | 10.2% | 10.7% | 11.0% | 10.0% |
| Tier\t1\tcapital\tratio(d) | 13.5 | 11.6 | 11.9 | 12.6 | 12.3 |
| Total\tcapital\tratio(d) | 15.1 | 13.1 | 14.3 | 15.2 | 15.3 |
| Tier\t1\tleverage\tratio(d) | 8.5 | 7.6 | 7.1 | 7.1 | 6.8 |
| Selected\tbalance\tsheet\tdata\t(period-end) |  |  |  |  |  |
| Trading\tassets | $343,839 | $398,988 | $374,664 | $450,028 | $443,963 |
| Securities | 290,827 | 348,004 | 354,003 | 371,152 | 364,793 |
| Loans | 837,299 | 757,336 | 738,418 | 733,796 | 723,720 |
| Core\tLoans | 732,093 | 628,785 | 583,751 | 555,351 | 518,095 |
| Total\tassets | 2,351,698 | 2,572,274 | 2,414,879 | 2,358,323 | 2,264,976 |
| Deposits | 1,279,715 | 1,363,427 | 1,287,765 | 1,193,593 | 1,127,806 |
| Long-term\tdebt(e) | 288,651 | 276,379 | 267,446 | 248,521 | 255,962 |
| Common\tstockholders'\tequity | 221,505 | 211,664 | 199,699 | 194,727 | 175,514 |
| Total\tstockholders'\tequity | 247,573 | 231,727 | 210,857 | 203,785 | 183,314 |
| Headcount | 234,598 | 241,359 | 251,196 | 258,753 | 259,940 |
| Credit\tquality\tmetrics |  |  |  |  |  |
| Allowance\tfor\tcredit\tlosses | $14,341 | $14,807 | $16,969 | $22,604 | $28,282 |
| Allowance\tfor\tloan\tlosses\tto\ttotal\tretained\tloans | 1.63% | 1.90% | 2.25% | 3.02% | 3.84% |
| Allowance\tfor\tloan\tlosses\tto\tretained\tloans\texcluding\tpurchased\tcredit-impaired\tloans(f) | 1.37 | 1.55 | 1.80 | 2.43 | 3.35 |
| Nonperforming\tassets | $7,034 | $7,967 | $9,706 | $11,906 | $11,315 |
| Net\tcharge-offs | 4,086 | 4,759 | 5,802 | 9,063 | 12,237 |
| Net\tcharge-off\trate | 0.52% | 0.65% | 0.81% | 1.26% | 1.78% |

Note:	Effective	October	1,	2015,	and	January	1,	2015,	JPMorgan	Chase	&	Co.	adopted	new	accounting	guidance,	retrospectively,	related	to	(1)	the	presentation	of	debt	issuance	costs,	and	(2)	investments	in	affordable	housing	projects	that	qualify	for	the	low-income	housing tax	credit,	respectively.	For	additional	information,	see	Explanation	and	Reconciliation	of	the	Firm's	Use	of	Non-GAAP	Financial	Measures	on	pages	80–82	,	Accounting	and	Reporting	Developments	on	page	170	,	and	Note	1.

(a) Share	prices	shown	for	JPMorgan	Chase's	common	stock	are	from	the	New	York	Stock	Exchange.

(b) 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	on	 pages	80–82.

(c) HQLA	represents	the	amount	of	assets	that	qualify	for	inclusion	in	the	liquidity	coverage	ratio	under	the	final	U.S.	rule	("U.S.	LCR")	for	December	31,	2015	and	the	Firm's	estimated	amount	for	December	31,	2014	prior	to	the	effective	date	of	the	final	rule,	and	under the	Basel	III	liquidity	coverage	ratio	("Basel	III	LCR")	for	prior	periods.	The	Firm	did	not	begin	estimating	HQLA	until	December	31,	2012.	For	additional	information,	see	HQLA	on	page	160.

(d) Basel	III	Transitional	rules	became	effective	on	January	1,	2014;	prior	period	data	is	based	on	Basel	I	rules.	As	of	December	31,	2014	the	ratios	presented	are	calculated	under	the	Basel	III	Advanced	Transitional	Approach.	CET1	capital under	Basel	III	replaced	Tier	1	common	capital	under	Basel	I.	Prior	to	Basel	III	becoming	effective	on	January	1,	2014,	Tier	1	common	capital	under	Basel	I	was	a	non-GAAP	financial	measure.	See	Capital	Management	on	pages	149–158	for additional	information	on	Basel	III	and	non-GAAP	financial	measures	of	regulatory	capital.

(f) 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	on pages	80–82. For	further	discussion,	see	Allowance	for	credit	losses	on	pages	130–132.

# FIVE-YEAR	STOCK	PERFORMANCE

The	following	table	and	graph	compare	the	five-year	cumulative	total	return	for	JPMorgan	Chase	&	Co.	("JPMorgan	Chase"	or	the	"Firm")	common	stock	with	the cumulative	return	of	the	S&P	500	Index,	the	KBW	Bank	Index	and	the	S&P	Financial	Index.	The	S&P	500	Index	is	a	commonly	referenced	United	States	of	America ("U.S.")	equity	benchmark	consisting	of	leading	companies	from	different	economic	sectors.	The	KBW	Bank	Index	seeks	to	reflect	the	performance	of	banks	and	thrifts that	are	publicly	traded	in	the	U.S.	and	is	composed	of	24	leading	national	money	center	and	regional	banks	and	thrifts.	The	S&P	Financial	Index	is	an	index	of	87 financial	companies,	all	of	which	are	components	of	the	S&P	500.	The	Firm	is	a	component	of	all	three	industry	indices.

The	following	table	and	graph	assume	simultaneous	investments	of	$100	on	December	31,	2010,	in	JPMorgan	Chase	common	stock	and	in	each	of	the	above	indices.	The comparison	assumes	that	all	dividends	are	reinvested.

| (in	dollars) | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| JPMorgan\tChase | $100.00 | $80.03 | $108.98 | $148.98 | $163.71 | $177.40 |
| KBW\tBank\tIndex | 100.00 | 76.82 | 102.19 | 140.77 | 153.96 | 154.71 |
| S&amp;P\tFinancial\tIndex | 100.00 | 82.94 | 106.78 | 144.79 | 166.76 | 164.15 |
| S&amp;P\t500\tIndex | 100.00 | 102.11 | 118.44 | 156.78 | 178.22 | 180.67 |
| December\t31,\n(in\tdollars) |  |  |  |  |  |  |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  |  | 67 |

(in	dollars)

# Management's	discussion	and	analysis

This	section	of	JPMorgan	Chase's	Annual	Report	for	the	year	ended	December	31,	2015	("Annual	Report"),	provides	Management's	discussion	and	analysis	of	the financial	condition	and	results	of	operations	("MD&A")	of	JPMorgan	Chase.	See	the	Glossary	of	Terms	on	pages	311–315	for	definitions	of	terms	used	throughout	this Annual	Report.	The	MD&A	included	in	this	Annual	Report	contains	statements	that	are	forward-looking	within	the	meaning	of	the	Private	Securities	Litigation	Reform Act	of	1995.	Such	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.	Certain	of	such	risks	and uncertainties	are	described	herein	(see	Forward-looking	Statements	on	page	173)	and	in	JPMorgan	Chase's	Annual	Report	on	Form	10-K	for	the	year	ended December	31,	2015	("2015	Form	10-K"),	in	Part	I,	Item	1A:	Risk	factors;	reference	is	hereby	made	to	both.

# INTRODUCTION

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	U.S.,	with	operations	worldwide;	the	Firm	had $2.4	trillion	in	assets	and	$247.6	billion	in	stockholders'	equity	as	of December	31,	2015.	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.

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	Management	("AM").	For	a description	of	the	Firm's	business	segments,	and	the	products	and	services	they provide	to	their	respective	client	bases,	refer	to	Business	Segment	Results	on pages	83–106,	and	Note	33.

# EXECUTIVE	OVERVIEW

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	Annual Report.	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	Annual	Report	should	be	read	in	its	entirety.

# Financial	performance	of	JPMorgan	Chase

| and	ratios) | 2015 | 2014 | Change |
| :--- | :--- | :--- | :--- |
| Selected\tincome\tstatement\tdata |  |  |  |
| Total\tnet\trevenue | $93,543 | $95,112 | (2)% |
| Total\tnoninterest\texpense | 59,014 | 61,274 | (4) |
| Pre-provision\tprofit | 34,529 | 33,838 | 2 |
| Provision\tfor\tcredit\tlosses | 3,827 | 3,139 | 22 |
| Net\tincome | 24,442 | 21,745 | 12 |
| Diluted\tearnings\tper\tshare | 6.00 | 5.29 | 13 |
| Return\ton\tcommon\tequity | 11% | 10% |  |
| Capital\tratios(a) |  |  |  |
| CET1 | 11.8 | 10.2 |  |
| Tier\t1\tcapital | 13.5 | 11.6 |  |

(a) Ratios	presented	are	calculated	under	the	transitional	Basel	III	rules	and	represent	the Collins	Floor.	See	Capital	Management	on	pages	149–158	for	additional	information	on Basel	III.

# Summary	of	2015	Results

JPMorgan	Chase	reported	record	full-year	2015	net	income	of	$24.4	billion,	and record	earnings	per	share	of	$6.00,	on	net	revenue	of	$93.5	billion.	Net	income increased	by	$2.7	billion	compared	with	net	income	of	$21.7	billion	in	2014. ROE	for	the	year	was	11%,	up	from	10%	in	the	prior	year.

The	increase	in	net	income	in	2015	was	driven	by	lower	taxes	and	lower noninterest	expense,	partially	offset	by	lower	net	revenue	and	a	higher	provision for	credit	losses.	The	decline	in	net	revenue	was	predominantly	driven	by	lower Corporate	private	equity	gains,	lower	CIB	revenue	reflecting	the	impact	of business	simplification,	and	lower	CCB	Mortgage	Banking	revenue.	These decreases	were	partially	offset	by	a	benefit	from	a	legal	settlement	in	Corporate and	higher	operating	lease	income,	predominantly	in	CCB.

The	decrease	in	noninterest	expense	was	driven	by	lower	CIB	expense,	reflecting the	impact	of	business	simplification,	and	lower	CCB	expense	as	a	result	of efficiencies,	predominantly	reflecting	declines	in	headcount-related	expense	and lower	professional	fees,	partially	offset	by	investments	in	the	business.	As	a result	of	these	changes,	the	Firm's	overhead	ratio	in	2015	was	lower	compared with	the	prior	year.

The	provision	for	credit	losses	increased	from	the	prior	year	as	a	result	of	an increase	in	the	wholesale	provision,	reflecting	the	impact	of	downgrades, including	in	the	Oil	&	Gas	portfolio.	The	consumer	provision	declined,	reflecting lower	net	charge-offs	due	to	continued	discipline	in	credit	underwriting,	as	well as	improvement	in	the	economy	driven	by	increasing	home	prices	and	lower unemployment	levels.	This	was	partially	offset	by	a	lower	reduction	in	the allowance	for	loan	losses.

Total	firmwide	allowance	for	credit	losses	in	2015	was	$14.3	billion,	resulting	in a	loan	loss	coverage	ratio	of	1.37%,	excluding	the	PCI	portfolio,	compared	with 1.55%	in	the	prior	year.	The	Firm's	allowance	for	loan	losses	to	retained nonaccrual	loans,	excluding	the	PCI	portfolio	and	credit	card,	was	117% compared	with	106%	in	2014.	Firmwide,	net	charge-offs	were	$4.1	billion	for	the year,	down	$673	million	from	2014.	Nonperforming	assets	at	year-end	were $7.0	billion,	down	$933	million.

The	Firm's	results	reflected	solid	underlying	performance	across	its	four	major reportable	business	segments,	with	continued	strong	lending	and	consumer deposit	growth.	Firmwide	average	core	loans	increased	by	12%	compared	with the	prior	year.	Within	CCB,	Consumer	&	Business	Banking	average	deposits increased	9%	over	the	prior	year.	The	Firm	had	nearly	23	million	active	mobile customers	at	year	end,	an	increase	of	20%	over	the	prior	year.	Credit	card	sales volume	(excluding	Commercial	Card)	was	up	7%	for	the	year	and	merchant processing	volume	was	up	12%.	The	CIB	maintained	its	#1	ranking	in	Global Investment	Banking	Fees	according	to	Dealogic.	CB	had	record	average	loans, with	an	11%	increase	compared	with	the	prior	year.	CB	also	had	record	gross investment	banking	revenue	of	$2.2	billion,	up	10%	from	the	prior	year.	AM	had positive	net	long-term

client	inflows	and	continued	to	deliver	strong	investment	performance	with	80% of	mutual	fund	assets	under	management	("AUM")	ranked	in	the	1st	or	2nd quartiles	over	the	past	five	years.	AM	also	increased	average	loan	balances	by 8%	in	2015.

In	2015,	the	Firm	continued	to	adapt	its	strategy	and	financial	architecture toward	meeting	regulatory	and	capital	requirements	and	the	changing	banking landscape,	while	serving	its	clients	and	customers,	investing	in	its	businesses, and	delivering	strong	returns	to	its	shareholders.	Importantly,	the	Firm	exceeded all	of	its	2015	financial	targets	including	those	related	to	balance	sheet optimization	and	managing	its	capital,	its	GSIB	surcharge	and	expense.	On capital,	the	Firm	exceeded	its	capital	target	of	reaching	Basel	III	Fully	Phased-In Advanced	and	Standardized	CET1	ratios	of	approximately	11%,	ending	the	year with	estimated	Basel	III	Advanced	Fully	Phased-in	CET1	capital	and	ratio	of $173.2	billion	and	11.6%,	respectively.	The	Firm	also	exceeded	its	target	of reducing	its	GSIB	capital	surcharge,	ending	the	year	at	an	estimated	3.5%	GSIB surcharge,	achieved	through	a	combination	of	reducing	wholesale	non-operating deposits,	level	3	assets	and	derivative	notionals.

The	Firm's	fully	phased-in	supplementary	leverage	ratio	("SLR")	was	6.5%	and JPMorgan	Chase	Bank,	N.A.'s	fully	phased-in	SLR	was	6.6%.	The	Firm	was also	compliant	with	the	fully	phased-in	U.S.	liquidity	coverage	ratio	("LCR") and	had	$496	billion	of	HQLA	as	of	year-end	2015.

The	Firm's	tangible	book	value	per	share	was	$48.13,	an	increase	of	8%	from the	prior	year.	Total	stockholders'	equity	was	$247.6	billion	at	December	31, 2015.

Tangible	book	value	per	share	and	each	of	these	Basel	III	Advanced	Fully Phased-In	measures	are	non-GAAP	financial	measures;	they	are	used	by management,	bank	regulators,	investors	and	analysts	to	assess	and	monitor	the Firm's	capital	position	and	liquidity.	For	further	discussion	of	Basel	III Advanced	Fully	Phased-in	measures	and	the	SLR	under	the	U.S.	final	SLR	rule, see	Capital	Management	on	pages	149–158,	and	for	further	discussion	of	LCR and	HQLA,	see	Liquidity	Risk	Management	on	pages	159–164.

The	Firm	provided	credit	to	and	raised	capital	of	$2.0	trillion	for	its	clients during	2015.	This	included	$705	billion	of	credit	to	corporations,	$233	billion	of credit	to	consumers,	and	$22	billion	to	U.S.	small	businesses.	During	2015,	the Firm	also	raised	$1.0	trillion	of	capital	for	clients.	Additionally,	$68	billion	of credit	was	provided	to,	and	capital	was	raised	for,	nonprofit	and	government entities,	including	states,	municipalities,	hospitals	and	universities.

The	Firm	has	substantially	completed	its	business	simplification	agenda,	exiting businesses,	products	or	clients	that	were	non-core,	not	at	scale	or	not	returning the	appropriate	level	of	return	in	order	to	focus	on	core	activities	for	its	core clients	and	reduce	risk	to	the	Firm.	While	the	business	simplification	initiative impacted	revenue	growth	in	2015,	it	did	not	have	a	meaningful	impact	on	the Firm's	profitability.	The	Firm	continues	to	focus	on	streamlining,	simplifying and	centralizing	operational	functions	and	processes	in	order	to	attain	more consistencies	and	efficiencies	across	the	Firm.	To	that	end,	the	Firm	continues	to make	progress	on	simplifying	its	legal	entity	structure,	streamlining	its	Global Technology	function,	rationalizing	its	use	of	vendors,	and	optimizing	its	real estate	location	strategy.

# Business	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	173	and	the	Risk	Factors	section	on	pages	8–18.

JPMorgan	Chase's	outlook	for	the	full-year	2016	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	inter-related	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.

In	the	first	quarter	of	2016,	management	expects	net	interest	income	and	net interest	margin	to	be	relatively	flat	when	compared	with	the	fourth	quarter	of 2015.	During	2016,	if	there	are	no	changes	in	interest	rates,	management	expects net	interest	income	could	be	approximately	$2	billion	higher	than	in	2015, reflecting	the	Federal	Reserve's	rate	increase	in	December	2015	and	loan growth.

Management	expects	core	loan	growth	of	approximately	10%-15%	in	2016	as well	as	continued	growth	in	retail	deposits	which	are	anticipated	to	lead	to	the Firm's	balance	sheet	growing	to	approximately	$2.45	trillion	in	2016.

Management	also	expects	managed	noninterest	revenue	of	approximately	$50 billion	in	2016,	a	decrease	from	2015,	primarily	driven	by	lower	Card	revenue reflecting	renegotiated	co-brand	partnership	agreements	and	lower	revenue	in Mortgage	Banking.

The	Firm	continues	to	experience	charge-offs	at	levels	lower	than	its	through- the-cycle	expectations	reflecting	favorable	credit	trends	across	the	consumer	and wholesale	portfolios,	excluding	Oil	&	Gas.	Management	expects	total	net charge-offs	of	up	to	approximately	$4.75	billion	in	2016.	Based	on	the	changes in	market	expectations	for	oil	prices	since	year-end	2015,	management	believes reserves	during	the	first	quarter	of	2016	could	increase	by	approximately	$500 million	for	Oil	&	Gas,	and	by	approximately	$100	million	for	Metals	&	Mining.

The	Firm	continues	to	take	a	disciplined	approach	to	managing	its	expenses, while	investing	in	growth	and	innovation.	The	Firm	intends	to	leverage	its	scale and	improve	its	operating	efficiencies,	in	order	to	reinvest	its	expense	savings	in additional	technology	and	marketing	investments	and	fund	other	growth initiatives.	As	a	result,	Firmwide	adjusted	expense	in	2016	is	expected	to	be approximately	$56	billion	(excluding	Firmwide	legal	expense).

Additionally,	the	Firm	will	continue	to	adapt	its	capital	assessment	framework	to review	businesses	and	client	relationships	against	multiple	binding	constraints, including	GSIB	and	other	applicable	capital	requirements,	imposing	internal limits	on	business	activities	to	align	or	optimize	the	Firm's	balance	sheet	and risk-weighted	assets	("RWA")	with	regulatory	requirements	in	order	to	ensure that	business	activities	generate	appropriate	levels	of	shareholder	value.

During	2016,	the	Firm	expects	the	CET1	capital	ratio	calculated	under	the	Basel III	Standardized	Approach	to	become	its	binding	constraint.	As	a	result	of	the anticipated	growth	in	the	balance	sheet,	management	anticipates	that	the	Firm will	have,	over	time,	$1.55	trillion	in	Standardized	risk	weighted	assets,	and	is expecting	that,	over	the	next	several	years,	its	Basel	III	CET1	capital	ratio	will be	between	11%	and	12.5%.	In	the	longer	term,	management	expects	to	maintain a	minimum	Basel	III	CET1	ratio	of	11%.	It	is	the	Firm's	current	intention	that the	Firm's	capital	ratios	continue	to	exceed	regulatory	minimums	as	they	are fully	implemented	in	2019	and	thereafter.	Likewise,	the	Firm	will	be	evolving	its funding	framework	to	ensure	it	meets	the	current	and	proposed	more	stringent regulatory	liquidity	rules,	including	those	relating	to	the	availability	of	adequate Total	Loss	Absorbing	Capacity	("TLAC").

In	Mortgage	Banking	within	CCB,	management	expects	noninterest	revenue	to decline	by	approximately	$700	million	in	2016	as	servicing	balances	continue	to decline	from	year-end	2015	levels.	The	Card	net	charge-off	rate	is	expected	to	be approximately	2.5%	in	2016.

In	CIB,	management	expects	Investment	Banking	revenue	in	the	first	quarter	of 2016	to	be	approximately	25%	lower	than	the	prior	year	first	quarter,	driven	by current	market	conditions	in	the	underwriting	businesses.	In	addition,	Markets revenue	to	date	in	the	first	quarter	of	2016	is	down	approximately	20%,	when compared	to	a	particularly	strong	period	in	the	prior	year	and	reflecting	the current	challenging	market	conditions.	Prior	year	Markets	revenue	was positively	impacted	by	macroeconomic	events,	including	the	Swiss	franc decoupling	from	the	Euro.	Actual	Markets	revenue	results	for	the	first	quarter will	continue	to	be	affected	by	market	conditions,	which	can	be	volatile.	In Securities	Services,	management	expects	revenue	of	approximately	$875	million in	the	first	quarter	of	2016.

The	following	section	of	the	MD&A	provides	a	comparative	discussion	of JPMorgan	Chase's	Consolidated	Results	of	Operations	on	a	reported	basis	for the	three-year	period	ended	December	31,	2015.	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	165–169.

# Revenue

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Investment\tbanking\tfees | $6,751 | $6,542 | $6,354 |
| Principal\ttransactions | 10,408 | 10,531 | 10,141 |
| Lending-\tand\tdeposit-related\tfees | 5,694 | 5,801 | 5,945 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 15,509 | 15,931 | 15,106 |
| Securities\tgains | 202 | 77 | 667 |
| Mortgage\tfees\tand\trelated\tincome | 2,513 | 3,563 | 5,205 |
| Card\tincome | 5,924 | 6,020 | 6,022 |
| Other\tincome(a) | 3,032 | 3,013 | 4,608 |
| Noninterest\trevenue | 50,033 | 51,478 | 54,048 |
| Net\tinterest\tincome | 43,510 | 43,634 | 43,319 |
| Total\tnet\trevenue | $93,543 | $95,112 | $97,367 |

Total	net	revenue	for	2015	was	down	by	2%	compared	with	the	prior	year, predominantly	driven	by	lower	Corporate	private	equity	gains,	lower	CIB revenue	reflecting	the	impact	of	business	simplification	initiatives,	and	lower CCB	Mortgage	Banking	revenue.	These	decreases	were	partially	offset	by	a benefit	from	a	legal	settlement	in	Corporate,	and	higher	operating	lease	income, predominantly	in	CCB.

Investment	banking	fees	increased	from	the	prior	year,	reflecting	higher	advisory fees,	partially	offset	by	lower	equity	and	debt	underwriting	fees.	The	increase	in advisory	fees	was	driven	by	a	greater	share	of	fees	for	completed	transactions	as well	as	growth	in	industry-wide	fee	levels.	The	decrease	in	equity	underwriting fees	resulted	from	lower	industry-wide	issuance,	and	the	decrease	in	debt underwriting	fees	resulted	primarily	from	lower	loan	syndication	and	bond underwriting	fees	on	lower	industry-wide	fee	levels.	For	additional	information on	investment	banking	fees,	see	CIB	segment	results	on	pages	94–98	and	Note	7. Principal	transactions	revenue	decreased	from	the	prior	year,	reflecting	lower private	equity	gains	in	Corporate	driven	by	lower	valuation	gains	and	lower	net gains	on	sales	as	the	Firm	exits	this	non-core	business.	The	decrease	was partially	offset	by	higher	client-driven	market-making	revenue,	particularly	in foreign	exchange,	interest	rate	and

equity-related	products	in	CIB,	as	well	as	a	gain	of	approximately	$160	million on	CCB's	investment	in	Square,	Inc.	upon	its	initial	public	offering.	For additional	information,	see	CIB	and	Corporate	segment	results	on	pages	94–98 and	pages	105–106,	respectively,	and	Note	7.

Asset	management,	administration	and	commissions	revenue	decreased compared	with	the	prior	year,	largely	as	a	result	of	lower	fees	in	CIB	and	lower performance	fees	in	AM.	The	decrease	was	partially	offset	by	higher	asset management	fees	as	a	result	of	net	client	inflows	into	assets	under	management and	the	impact	of	higher	average	market	levels	in	AM	and	CCB.	For	additional information,	see	the	segment	discussions	of	CIB	and	AM	on	pages	94–98	and pages	102–104,	respectively,	and	Note	7.

Mortgage	fees	and	related	income	decreased	compared	with	the	prior	year, reflecting	lower	servicing	revenue	largely	as	a	result	of	lower	average	third-party loans	serviced,	and	lower	net	production	revenue	reflecting	a	lower	repurchase benefit.	For	further	information	on	mortgage	fees	and	related	income,	see	the segment	discussion	of	CCB	on	pages	85–93	and	Notes	7	and	17.

For	information	on	lending-	and	deposit-related	fees,	see	the	segment	results	for CCB	on	pages	85–93,	CIB	on	pages	94–98,	and	CB	on	pages	99–101	and	Note 7;	securities	gains,	see	the	Corporate	segment	discussion	on	pages	105–106;	and card	income,	see	CCB	segment	results	on	pages	85–93.

Other	income	was	relatively	flat	compared	with	the	prior	year,	reflecting	a	$514 million	benefit	from	a	legal	settlement	in	Corporate,	higher	operating	lease income	as	a	result	of	growth	in	auto	operating	lease	assets	in	CCB,	and	the absence	of	losses	related	to	the	exit	of	non-core	portfolios	in	Card.	These increases	were	offset	by	the	impact	of	business	simplification	in	CIB;	the absence	of	a	benefit	recognized	in	2014	from	a	franchise	tax	settlement;	and losses	related	to	the	accelerated	amortization	of	cash	flow	hedges	associated	with the	exit	of	certain	non-operating	deposits.

Net	interest	income	was	relatively	flat	compared	with	the	prior	year,	as	lower loan	yields,	lower	investment	securities	net	interest	income,	and	lower	trading asset	balance	and	yields	were	offset	by	higher	average	loan	balances	and	lower interest	expense	on	deposits.	The	Firm's	average	interest-earning	assets	were $2.1	trillion	in	2015,	and	the	net	interest	yield	on	these	assets,	on	a	fully	taxable- equivalent	("FTE")	basis,	was	2.14%,	a	decrease	of	4	basis	points	from	the	prior year.

Total	net	revenue	for	2014	was	down	by	2%	compared	with	the	prior	year, predominantly	due	to	lower	mortgage	fees	and	related	income	and	lower	other income.	The	decrease	was	partially	offset	by	higher	asset	management, administration	and	commissions	revenue.

Investment	banking	fees	increased	compared	with	the	prior	year,	due	to	higher advisory	and	equity	underwriting	fees,	largely	offset	by	lower	debt	underwriting fees.	The	increase

in	advisory	fees	was	driven	by	the	combined	impact	of	a	greater	share	of	fees	for completed	transactions,	and	growth	in	industry-wide	fees.	The	increase	in	equity underwriting	fees	was	driven	by	higher	industry-wide	issuance.	The	decrease	in debt	underwriting	fees	was	primarily	related	to	lower	bond	underwriting	fees compared	with	the	prior	year,	and	lower	loan	syndication	fees	on	lower	industry- wide	fees.

Principal	transactions	revenue	increased	as	the	prior	year	included	a	$1.5	billion loss	related	to	the	implementation	of	the	funding	valuation	adjustment	("FVA") framework	for	over-the-counter	("OTC")	derivatives	and	structured	notes. Private	equity	gains	increased	as	a	result	of	higher	net	gains	on	sales.	These increases	were	partially	offset	by	lower	fixed	income	markets	revenue	in	CIB, primarily	driven	by	credit-related	and	rates	products,	as	well	as	the	impact	of business	simplification	initiatives.

Lending-	and	deposit-related	fees	decreased	compared with	the	prior	year,	reflecting	the	impact	of	business	simplification	initiatives	and lower	trade	finance	revenue in	CIB.

Asset	management,	administration	and	commissions	revenue	increased	compared with	the	prior	year,	reflecting	higher	asset	management	fees	driven	by	net	client inflows	and	higher	market	levels	in	AM	and	CCB.	The	increase	was	offset partially	by	lower	commissions	and	other	fee	revenue	in	CCB	as	a	result	of	the exit	of	a	non-core	product	in	2013.

Securities	gains	decreased	compared	with	the	prior	year,	reflecting	lower repositioning	activity	related	to	the	Firm's	investment	securities	portfolio.

Mortgage	fees	and	related	income	decreased	compared	with	the	prior	year, predominantly	due	to	lower	net	production	revenue	driven	by	lower	volumes	due to	higher	mortgage	interest	rates,	and	tighter	margins.	The	decline	in	net production	revenue	was	partially	offset	by	a	lower	loss	on	the	risk	management of	mortgage	servicing	rights	("MSRs").

Card	income	was	relatively	flat	compared	with	the	prior	year,	but	included higher	net	interchange	income	due	to	growth	in	credit	and	debit	card	sales volume,	offset	by	higher	amortization	of	new	account	origination	costs.

Other	income	decreased	from	the	prior	year,	predominantly	from	the	absence	of two	significant	items	recorded	in	Corporate	in	2013:	gains	of	$1.3	billion	and $493	million	from	sales	of	Visa	shares	and	One	Chase	Manhattan	Plaza, respectively.	Lower	valuations	of	seed	capital	investments	in	AM	and	losses related	to	the	exit	of	non-core	portfolios	in	Card	also	contributed	to	the	decrease. These	items	were	partially	offset	by	higher	auto	lease	income	as	a	result	of growth	in	auto	lease	volume,	and	a	benefit	from	a	tax	settlement.

Net	interest	income	increased	slightly	from	the	prior	year,	predominantly reflecting	higher	yields	on	investment	securities,	the	impact	of	lower	interest expense	from	lower	rates,	and	higher	average	loan	balances.	The	increase	was partially	offset	by	lower	yields	on	loans	due	to	the	run-off	of	higher-yielding loans	and	new	originations	of	lower-yielding	loans,	and	lower	average	interest- earning	trading	asset	balances.	The	Firm's	average	interest-earning	assets	were $2.0	trillion,	and	the	net	interest	yield	on	these	assets,	on	a	FTE	basis,	was 2.18%,	a	decrease	of	5	basis	points	from	the	prior	year.

# Provision	for	credit	losses

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Consumer,\texcluding\tcredit\tcard | $(81) | $419 | $(1,871) |
| Credit\tcard | 3,122 | 3,079 | 2,179 |
| Total\tconsumer | 3,041 | 3,498 | 308 |
| Wholesale | 786 | (359) | (83) |
| Total\tprovision\tfor\tcredit\tlosses | $3,827 | $3,139 | $225 |

The	provision	for	credit	losses	increased	from	the	prior	year	as	a	result	of	an increase	in	the	wholesale	provision,	largely	reflecting	the	impact	of	downgrades in	the	Oil	&	Gas	portfolio.	The	increase	was	partially	offset	by	a	decrease	in	the consumer	provision,	reflecting	lower	net	charge-offs	due	to	continued	discipline in	credit	underwriting,	as	well	as	improvement	in	the	economy	driven	by increasing	home	prices	and	lower	unemployment	levels.	The	increase	was partially	offset	by	a	lower	reduction	in	the	allowance	for	loan	losses.	For	a	more detailed	discussion	of	the	credit	portfolio	and	the	allowance	for	credit	losses,	see the	segment	discussions	of	CCB	on	pages	85–93,	CB	on	pages	99–101,	and	the Allowance	For	Credit	Losses	on	pages	130–132.

The	provision	for	credit	losses	increased	by	$2.9	billion	from	the	prior	year	as result	of	a	lower	benefit	from	reductions	in	the	consumer	allowance	for	loan losses,	partially	offset	by	lower	net	charge-offs.	The	consumer	allowance reduction	in	2014	was	primarily	related	to	the	consumer,	excluding	credit	card, portfolio	and	reflected	the	continued	improvement	in	home	prices	and delinquencies	in	the	residential	real	estate	portfolio.	The	wholesale	provision reflected	a	continued	favorable	credit	environment.

# Noninterest	expense

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Compensation\texpense | $29,750 | $30,160 | $30,810 |
| Noncompensation\texpense: |  |  |  |
| Occupancy | 3,768 | 3,909 | 3,693 |
| Technology,\tcommunications\tand\tequipment | 6,193 | 5,804 | 5,425 |
| Professional\tand\toutside\tservices | 7,002 | 7,705 | 7,641 |
| Marketing | 2,708 | 2,550 | 2,500 |
| Other(a)(b) | 9,593 | 11,146 | 20,398 |
| Total\tnoncompensation\texpense | 29,264 | 31,114 | 39,657 |
| Total\tnoninterest\texpense | $59,014 | $61,274 | $70,467 |

(b) Included	Federal	Deposit	Insurance	Corporation	("FDIC")-related	expense	of	$1.2	billion,

Total	noninterest	expense	decreased	by	4%	from	the	prior	year,	as	a	result	of lower	CIB	expense,	predominantly	reflecting	the	impact	of	business simplification;	and	lower	CCB	expense	resulting	from	efficiencies	related	to declines	in	headcount-related	expense	and	lower	professional	fees.	These decreases	were	partially	offset	by	investment	in	the	businesses,	including	for infrastructure	and	controls.

Compensation	expense	decreased	compared	with	the	prior	year,	predominantly driven	by	lower	performance-based	incentives	and	reduced	headcount,	partially offset	by	higher	postretirement	benefit	costs	and	investment	in	the	businesses, including	for	infrastructure	and	controls.

Noncompensation	expense	decreased	from	the	prior	year,	reflecting	benefits from	business	simplification	in	CIB;	lower	professional	and	outside	services expense,	reflecting	lower	legal	services	expense	and	a	reduced	number	of contractors	in	the	businesses;	lower	amortization	of	intangibles;	and	the	absence of	a	goodwill	impairment	in	Corporate.	These	factors	were	partially	offset	by higher	depreciation	expense,	largely	associated	with	higher	auto	operating	lease assets	in	CCB;	higher	marketing	expense	in	CCB;	and	higher	FDIC-related assessments.	Legal	expense	was	relatively	flat	compared	with	the	prior	year.	For a	further	discussion	of	legal	expense,	see	Note	31.

Total	noninterest	expense	decreased	by	$9.2	billion,	or	13%,	from	the	prior	year, as	a	result	of	lower	other	expense	(in	particular,	legal	expense)	and	lower compensation	expense.

Compensation	expense	decreased	compared	with	the	prior	year,	predominantly driven	by	lower	headcount	in	CCB	Mortgage	Banking,	lower	performance-based compensation	expense	in	CIB,	and	lower	postretirement	benefit	costs.	The decrease	was	partially	offset	by	investments	in	the	businesses,	including headcount	for	controls.

Noncompensation	expense	decreased	compared	with	the	prior	year,	due	to	lower other	expense,	predominantly	reflecting	lower	legal	expense.	Lower	expense	for foreclosure-related	matters	and	production	and	servicing-related	expense	in	CCB Mortgage	Banking,	lower	FDIC-related	assessments,	and	lower	amortization	due to	certain	fully	amortized	intangibles,	also	contributed	to	the	decline.	The decrease	was	offset	partially	by	investments	in	the	businesses,	including	for controls,	and	costs	related	to	business	simplification	initiatives	across	the	Firm.

# Income	tax	expense

| (in	millions,	except	rate) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Income\tbefore\tincome\ttax\texpense | $30,702 | $30,699 | $26,675 |
| Income\ttax\texpense | 6,260 | 8,954 | 8,789 |
| Effective\ttax\trate | 20.4% | 29.2% | 32.9% |

The	effective	tax	rate	decreased	compared	with	the	prior	year,	predominantly	due to	the	recognition	in	2015	of	tax	benefits	of	$2.9	billion	and	other	changes	in	the mix	of	income	and	expense	subject	to	U.S.	federal,	state	and	local	income	taxes, partially	offset	by	prior-year	tax	adjustments.	The	recognition	of	tax	benefits	in 2015	was	due	to	the	resolution	of	various	tax	audits,	as	well	as	the	release	of	U.S. deferred	taxes	associated	with	the	restructuring	of	certain	non-U.S.	entities.	For further	information	see

The	decrease	in	the	effective	tax	rate	from	the	prior	year	was	largely	attributable to	the	effect	of	the	lower	level	of	nondeductible	legal-related	penalties,	partially offset	by	higher	2014	pretax	income	in	combination	with	changes	in	the	mix	of income	and	expense	subject	to	U.S.	federal,	state	and	local	income	taxes,	and lower	tax	benefits	associated	with	tax	adjustments	and	the	settlement	of	tax audits.

# Selected	Consolidated	balance	sheets	data

| December	31,	(in	millions) | 2015 | 2014 | Change |
| :--- | :--- | :--- | :--- |
| Assets |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | $20,490 | $27,831 | (26)% |
| Deposits\twith\tbanks | 340,015 | 484,477 | (30) |
| Federal\tfunds\tsold\tand\tsecurities\npurchased\tunder\tresale\tagreements | 212,575 | 215,803 | (1) |
| Securities\tborrowed | 98,721 | 110,435 | (11) |
| Trading\tassets: |  |  |  |
| Debt\tand\tequity\tinstruments | 284,162 | 320,013 | (11) |
| Derivative\treceivables | 59,677 | 78,975 | (24) |
| Securities | 290,827 | 348,004 | (16) |
| Loans | 837,299 | 757,336 | 11 |
| Allowance\tfor\tloan\tlosses | (13,555) | (14,185) | (4) |
| Loans,\tnet\tof\tallowance\tfor\tloan\nlosses | 823,744 | 743,151 | 11 |
| Accrued\tinterest\tand\taccounts\nreceivable | 46,605 | 70,079 | (33) |
| Premises\tand\tequipment | 14,362 | 15,133 | (5) |
| Goodwill | 47,325 | 47,647 | (1) |
| Mortgage\tservicing\trights | 6,608 | 7,436 | (11) |
| Other\tintangible\tassets | 1,015 | 1,192 | (15) |
| Other\tassets | 105,572 | 102,098 | 3 |
| Total\tassets | $2,351,698 | $2,572,274 | (9)% |
| Liabilities |  |  |  |
| Deposits | $1,279,715 | $1,363,427 | (6) |
| Federal\tfunds\tpurchased\tand\tsecurities |  |  |  |
| loaned\tor\tsold\tunder\trepurchase |  |  |  |
| agreements | 152,678 | 192,101 | (21) |
| Commercial\tpaper | 15,562 | 66,344 | (77) |
| Other\tborrowed\tfunds | 21,105 | 30,222 | (30) |
| Trading\tliabilities: |  |  |  |
| Debt\tand\tequity\tinstruments | 74,107 | 81,699 | (9) |
| Derivative\tpayables | 52,790 | 71,116 | (26) |
| Accounts\tpayable\tand\tother\tliabilities | 177,638 | 206,939 | (14) |
| Beneficial\tinterests\tissued\tby |  |  |  |
| consolidated\tvariable\tinterest\tentities |  |  |  |
| ("VIEs") | 41,879 | 52,320 | (20) |
| Long-term\tdebt | 288,651 | 276,379 | 4 |
| Total\tliabilities | 2,104,125 | 2,340,547 | (10) |
| Stockholders'\tequity | 247,573 | 231,727 | 7 |
| Total\tliabilities\tand\tstockholders'\nequity | $2,351,698 | $2,572,274 | (9)% |

The	following	is	a	discussion	of	the	significant	changes	between	December	31, 2015	and	2014.

# Cash	and	due	from	banks	and	deposits	with	banks

The	Firm's	excess	cash	is	placed	with	various	central	banks,	predominantly Federal	Reserve	Banks.	The	net	decrease	in	cash	and	due	from	banks	and deposits	with	banks	was	primarily	due	to	the	Firm's	actions	to	reduce	wholesale non-operating	deposits.

# Securities	borrowed

The	decrease	was	largely	driven	by	a	lower	demand	for	securities	to	cover	short positions	in	CIB.	For	additional	information,	refer	to	Notes	3	and	13.

# Trading	assets–debt	and	equity	instruments

The	decrease	was	predominantly	related	to	client-driven	market-making activities	in	CIB,	which	resulted	in	lower	levels	of	both	debt	and	equity instruments.	For	additional	information,	refer	to	Note	3.

# Trading	assets	and	liabilities–derivative	receivables	and	payables

The	decrease	in	both	receivables	and	payables	was	predominantly	driven	by declines	in	interest	rate	derivatives,	commodity	derivatives,	foreign	exchange derivatives	and	equity	derivatives	due	to	market	movements,	maturities	and settlements	related	to	client-driven	market-making	activities	in	CIB.	For additional	information,	refer	to	Derivative	contracts	on	pages	127–129,	and Notes	3	and	6.

# Securities

The	decrease	was	largely	due	to	paydowns	and	sales	of non-U.S.	residential	mortgage-backed	securities,	non-U.S.	government	debt securities,	and	non-U.S.	corporate	debt	securities	reflecting	a	shift	to	loans.	For additional	information	related	to	securities,	refer	to	the	discussion in	the	Corporate	segment	on	pages	105–106,	and	Notes	3 and	12.

# Loans	and	allowance	for	loan	losses

The	increase	in	loans	was	attributable	to	an	increase	in	consumer	loans	due	to higher	originations	and	retention	of	prime	mortgages	in	Mortgage	Banking ("MB")	and	AM,	and	higher	originations	of	auto	loans	in	CCB,	as	well	as	an increase	in	wholesale	loans	driven	by	increased	client	activity,	notably	in commercial	real	estate.

The	decrease	in	the	allowance	for	loan	losses	was	attributable	to	a	lower consumer,	excluding	credit	card,	allowance	for	loan	losses,	driven	by	a	reduction in	the	residential	real	estate	portfolio	allowance	as	a	result	of	continued improvement	in	home	prices	and	delinquencies	and	increased	granularity	in	the impairment	estimates.	The	wholesale	allowance	increased,	largely	reflecting	the impact	of	downgrades	in	the	Oil	&	Gas	portfolio.	For	a	more	detailed	discussion of	loans	and	the	allowance	for	loan	losses,	refer	to	Credit	Risk	Management	on pages	112–132,	and	Notes	3,	4,	14	and	15.

# Accrued	interest	and	accounts	receivable

The	decrease	was	due	to	lower	customer	receivables	related	to	client	activity	in CIB,	and	a	reduction	in	unsettled	securities	transactions.

# Mortgage	servicing	rights

For	information	on	MSRs,	see	Note	17.

# Other	assets

Other	assets	increased	modestly	as	a	result	of	an	increase	in	income	tax receivables,	largely	associated	with	the	resolution	of	certain	tax	audits,	and higher	auto	operating	lease	assets	from	growth	in	business	volume.	These	factors were	mostly	offset	by	lower	private	equity	investments	driven	by	the	sale	of	a portion	of	the	Private	Equity	business	and	other	portfolio	sales.

# Deposits

The	decrease	was	attributable	to	lower	wholesale	deposits,	partially	offset	by higher	consumer	deposits.	The	decrease	in	wholesale	deposits	reflected	the impact	of	the	Firm's	actions	to	reduce	non-operating	deposits.	The	increase	in consumer	deposits	reflected	continuing	positive	growth	from	strong	customer retention.	For	more	information,	refer	to	the	Liquidity	Risk	Management discussion	on	pages	159–164;	and	Notes	3	and	19.

# Federal	funds	purchased	and	securities	loaned	or	sold	under	repurchase agreements

The	decrease	was	due	to	a	decline	in	secured	financing	of	trading	assets-debt	and equity	instruments	in	CIB	and	of	investment	securities	in	the	Chief	Investment Office	("CIO").	For	additional	information	on	the	Firm's	Liquidity	Risk Management,	see	pages	159–164.

# Commercial	paper

The	decrease	was	associated	with	the	discontinuation	of	a	cash	management product	that	offered	customers	the	option	of	sweeping	their	deposits	into commercial	paper	("customer	sweeps"),	and	lower	issuances	in	the	wholesale markets,	consistent	with	Treasury's	short-term	funding	plans.	For	additional information,	see	Liquidity	Risk	Management	on	pages	159–164.

# Accounts	payable	and	other	liabilities

The	decrease	was	due	to	lower	brokerage	customer	payables	related	to	client activity	in	CIB.

# Beneficial	interests	issued	by	consolidated	VIEs

The	decrease	was	predominantly	due	to	a	reduction	in	commercial	paper	issued by	conduits	to	third	parties	and	to	maturities	of	certain	municipal	bond	vehicles in	CIB,	as	well	as	net	maturities	of	credit	card	securitizations.	For	further information	on	Firm-sponsored	VIEs	and	loan	securitization	trusts,	see	Off- Balance	Sheet	Arrangements	on	pages	77–78	and	Note	16.

# Long-term	debt

The	increase	was	due	to	net	issuances,	consistent	with	Treasury's	long-term funding	plans.	For	additional	information	on	the	Firm's	long-term	debt	activities, see	Liquidity	Risk	Management	on	pages	159–164	and	Note	21.

# Stockholders'	equity

The	increase	was	due	to	net	income	and	preferred	stock	issuances,	partially offset	by	the	declaration	of	cash	dividends	on	common	and	preferred	stock,	and repurchases	of	common	stock.	For	additional	information	on	accumulated	other comprehensive	income/(loss)	("AOCI"),	see	Note	25;	for	the	Firm's	capital actions,	see	Capital	Management	on	page	157	and	Notes	22,	23	and	25.

# OFF-BALANCE	SHEET	ARRANGEMENTS	AND	CONTRACTUAL	CASH	OBLIGATIONS

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).

# 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.	SPEs	may	be	organized	as	trusts, partnerships	or	corporations	and	are	typically	established	for	a	single,	discrete purpose.	SPEs	are	not	typically	operating	entities	and	usually	have	a	limited	life and	no	employees.	The	basic	SPE	structure	involves	a	company	selling	assets	to the	SPE;	the	SPE	funds	the	purchase	of	those	assets	by	issuing	securities	to investors.

JPMorgan	Chase	uses	SPEs	as	a	source	of	liquidity	for	itself	and	its	clients	by securitizing	financial	assets,	and	by	creating	investment	products	for	clients.	The Firm	is	involved	with	SPEs	through	multi-seller	conduits,	investor intermediation	activities,	and	loan	securitizations.	See	Note	16	for	further information	on	these	types	of	SPEs.

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.

The	Firm	has	no	commitments	to	issue	its	own	stock	to	support	any	SPE transaction,	and	its	policies	require	that	transactions	with	SPEs	be	conducted	at arm's	length	and	reflect	market	pricing.	Consistent	with	this	policy,	no JPMorgan	Chase	employee	is	permitted	to	invest	in	SPEs	with	which	the	Firm	is involved	where	such	investment	would	violate	the	Firm's	Code	of	Conduct. These	rules	prohibit	employees	from	self-dealing	and	acting	on	behalf	of	the Firm	in	transactions	with	which	they	or	their	family	have	any	significant financial	interest.

# 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	December	31,	2015	and	2014,	was	$8.7	billion	and	$12.1	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	$5.6	billion and	$9.9	billion	at	December	31,	2015	and	2014,	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	multi-seller	conduits	in	Note	16.

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	16	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	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	127	and	Note 29.	For	a	discussion	of	liabilities	associated	with	loan	sales	and	securitization- related	indemnifications,	see	Note	29.

# Contractual	cash	obligations

The	accompanying	table	summarizes,	by	remaining	maturity,	JPMorgan	Chase's significant	contractual	cash	obligations	at	December	31,	2015.	The	contractual cash	obligations	included	in	the	table	below	reflect	the	minimum	contractual obligation	under	legally	enforceable	contracts	with	terms	that	are	both	fixed	and determinable.	Excluded	from	the	below	table	are	certain	liabilities	with	variable cash	flows	and/or	no	obligation	to	return	a	stated	amount	of	principal	at	maturity.

The	carrying	amount	of	on-balance	sheet	obligations	on	the	Consolidated balance	sheets	may	differ	from	the	minimum	contractual	amount	of	the obligations	reported	below.	For	a	discussion	of	mortgage	repurchase	liabilities and	other	obligations,	see	Note	29.

| By	remaining	maturity	at	December	31, |  |  | 2015 |  |  | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2016 | 2017-2018 | 2019-2020 | After\t2020 | Total | Total |
| On-balance\tsheet\tobligations |  |  |  |  |  |  |
| Deposits(a) | $1,262,865 | $5,166 | $3,553 | $4,555 | $1,276,139 | $1,361,597 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\nrepurchase\tagreements | 151,433 | 811 | 3 | 491 | 152,738 | 192,128 |
| Commercial\tpaper | 15,562 | — | — | — | 15,562 | 66,344 |
| Other\tborrowed\tfunds(a) | 11,331 | — | — | — | 11,331 | 15,734 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs | 16,389 | 18,480 | 3,093 | 3,130 | 41,092 | 50,200 |
| Long-term\tdebt(a) | 45,972 | 82,293 | 59,669 | 92,272 | 280,206 | 262,888 |
| Other(b) | 3,659 | 1,201 | 1,024 | 2,488 | 8,372 | 8,355 |
| Total\ton-balance\tsheet\tobligations | 1,507,211 | 107,951 | 67,342 | 102,936 | 1,785,440 | 1,957,246 |
| Off-balance\tsheet\tobligations |  |  |  |  |  |  |
| Unsettled\treverse\trepurchase\tand\tsecurities\tborrowing\nagreements(c) | 42,482 | — | — | — | 42,482 | 40,993 |
| Contractual\tinterest\tpayments(d) | 8,787 | 9,461 | 6,693 | 21,208 | 46,149 | 48,038 |
| Operating\tleases(e) | 1,668 | 3,094 | 2,388 | 4,679 | 11,829 | 12,441 |
| Equity\tinvestment\tcommitments(f) | 387 | — | 75 | 459 | 921 | 1,108 |
| Contractual\tpurchases\tand\tcapital\texpenditures | 1,266 | 886 | 276 | 170 | 2,598 | 2,832 |
| Obligations\tunder\taffinity\tand\tco-brand\tprograms | 98 | 275 | 80 | 43 | 496 | 2,303 |
| Total\toff-balance\tsheet\tobligations | 54,688 | 13,716 | 9,512 | 26,559 | 104,475 | 107,715 |
| Total\tcontractual\tcash\tobligations | $1,561,899 | $121,667 | $76,854 | $129,495 | $1,889,915 | $2,064,961 |

(a) Excludes	structured	notes	on	which	the	Firm	is	not	obligated	to	return	a	stated	amount	of	principal	at	the	maturity	of	the	notes,	but	is	obligated	to	return	an	amount	based	on	the	performance	of	the structured	notes.

(b) Primarily	includes	dividends	declared	on	preferred	and	common	stock,	deferred	annuity	contracts,	pension	and	postretirement	obligations	and	insurance	liabilities.

(c) For	further	information,	refer	to	unsettled	reverse	repurchase	and	securities	borrowing	agreements	in	Note	29.

(d) Includes	accrued	interest	and	future	contractual	interest	obligations.	Excludes	interest	related	to	structured	notes	for	which	the	Firm's	payment	obligation	is	based	on	the	performance	of	certain benchmarks.

(e) Includes	noncancelable	operating	leases	for	premises	and	equipment	used	primarily	for	banking	purposes	and	for	energy-related	tolling	service	agreements.	Excludes	the	benefit	of	noncancelable sublease	rentals	of	$1.9	billion	and	$2.2	billion	at	December	31,	2015	and	2014,	respectively.

(f) At	December	31,	2015	and	2014,	included	unfunded	commitments	of	$50	million	and	$147	million,	respectively,	to	third-party	private	equity	funds,	and	 $871	million	and	$961	million	of unfunded	commitments,	respectively,	to	other	equity	investments.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby/(used\tin) |  |  |  |
| Operating\tactivities | $73,466 | $36,593 | $107,953 |
| Investing\tactivities | 106,980 | (165,636) | (150,501) |
| Financing\tactivities | (187,511) | 118,228 | 28,324 |
| Effect\tof\texchange\trate\tchanges\ton\ncash | (276) | (1,125) | 272 |
| Net\tdecrease\tin\tcash\tand\tdue\tfrom\nbanks | $(7,341) | $(11,940) | $(13,952) |

# Operating	activities

JPMorgan	Chase's	operating	assets	and	liabilities	support	the	Firm's	lending	and capital	markets	activities,	including	the	origination	or	purchase	of	loans	initially designated	as	held-for-sale.	Operating	assets	and	liabilities	can	vary	significantly in	the	normal	course	of	business	due	to	the	amount	and	timing	of	cash	flows, which	are	affected	by	client-driven	and	risk	management	activities	and	market conditions.	The	Firm	believes	cash	flows	from	operations,	available	cash balances	and	its	capacity	to	generate	cash	through	secured	and	unsecured	sources are	sufficient	to	meet	the	Firm's	operating	liquidity	needs.

Cash	provided	by	operating	activities	in	2015	resulted	from	a	decrease	in	trading assets,	predominantly	due	to	client-driven	market-making	activities	in	CIB, resulting	in	lower	levels	of	debt	and	equity	securities.	Additionally,	cash	was provided	by	a	decrease	in	accounts	receivable	due	to	lower	client	receivables	and higher	net	proceeds	from	loan	sales	activities.	This	was	partially	offset	by	cash used	due	to	a	decrease	in	accounts	payable	and	other	liabilities,	resulting	from lower	brokerage	customer	payables	related	to	client	activity	in	CIB.	In	2014	cash provided	reflected	higher	net	proceeds	from	loan	securitizations	and	sales activities	when	compared	with	2013.	In	2013	cash	provided	reflected	a	decrease in	trading	assets	from	client-driven	market-making	activities	in	CIB,	resulting	in lower	levels	of	debt	securities,	partially	offset	by	net	cash	used	in	connection with	loans	originated	or	purchased	for	sale.	Cash	provided	by	operating	activities for	all	periods	also	reflected	net	income	after	noncash	operating	adjustments.

# Investing	activities

The	Firm's	investing	activities	predominantly	include	loans	originated	to	be	held for	investment,	the	investment	securities	portfolio	and	other	short-term	interest- earning	assets.	Cash	provided	by	investing	activities	during	2015	predominantly resulted	from	lower	deposits	with	banks	due	to	the	Firm's	actions	to	reduce wholesale	non-operating	deposits;	and	net	proceeds	from	paydowns,	maturities, sales	and	purchases	of	investment	securities.	Partially	offsetting	these	net	inflows was	cash	used	for	net	originations	of	consumer	and	wholesale	loans,	a	portion	of which	reflected	a	shift	from	investment	securities.	Cash

used	in	investing	activities	during	2014	and	2013	resulted	from	increases	in deposits	with	banks,	attributable	to	higher	levels	of	excess	funds;	cash	was	also used	for	growth	in	wholesale	and	consumer	loans	in	2014,	while	in	2013	cash used	reflected	growth	only	in	wholesale	loans.	Partially	offsetting	these	cash outflows	in	2014	and	2013	was	a	net	decline	in	securities	purchased	under	resale agreements	due	to	a	shift	in	the	deployment	of	the	Firm's	excess	cash	by Treasury,	and	a	net	decline	in	consumer	loans	in	2013	resulting	from	paydowns and	portfolio	runoff	or	liquidation	of	delinquent	loans.	Investing	activities	in 2014	and	2013	also	reflected	net	proceeds	from	paydowns,	maturities,	sales	and purchases	of	investment	securities.

# Financing	activities

The	Firm's	financing	activities	includes	cash	related	to	customer	deposits,	long- term	debt,	and	preferred	and	common	stock.	Cash	used	in	financing	activities	in 2015	resulted	from	lower	wholesale	deposits	partially	offset	by	higher	consumer deposits.	Additionally,	in	2015	cash	outflows	were	attributable	to	lower	levels	of commercial	paper	due	to	the	discontinuation	of	a	cash	management	product	that offered	customers	the	option	of	sweeping	their	deposits	into	commercial	paper; lower	commercial	paper	issuances	in	the	wholesale	markets;	and	a	decrease	in securities	loaned	or	sold	under	repurchase	agreements	due	to	a	decline	in	secured financings.	Cash	provided	by	financing	activities	in	2014	and	2013 predominantly	resulted	from	higher	consumer	and	wholesale	deposits;	partially offset	in	2013	by	a	decrease	in	securities	loaned	or	sold	under	repurchase agreements,	predominantly	due	to	changes	in	the	mix	of	the	Firm's	funding sources.	For	all	periods,	cash	was	provided	by	net	proceeds	from	long-term borrowings	and	issuances	of	preferred	stock;	and	cash	was	used	for	repurchases of	common	stock	and	cash	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	75–76,	Capital	Management	on pages	149–158,	and	Liquidity	Risk	Management	on	pages	159–164.

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

The	Firm	prepares	its	Consolidated	Financial	Statements	using	U.S.	GAAP; these	financial	statements	appear	on	pages	176–180.	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	an	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.	These	adjustments	have	no	impact on	net	income	as	reported	by	the	Firm	as	a	whole	or	by	the	lines	of	business.

Effective	January	1,	2015,	the	Firm	adopted	new	accounting	guidance	for investments	in	affordable	housing	projects	that	qualify	for	the	low-income housing	tax	credit,	which	impacted	the	CIB.	As	a	result	of	the	adoption	of	this new	guidance,	the	Firm	made	an	accounting	policy	election	to	amortize	the initial	cost	of	qualifying	investments	in	proportion	to	the	tax	credits	and	other benefits	received,	and	to	present	the	amortization	as	a	component	of	income	tax expense;	previously	such	amounts	were	predominantly	presented	in	other income.	The	guidance	was	required	to	be	applied	retrospectively	and, accordingly,	certain	prior	period	amounts	have	been	revised	to	conform	with	the current	period	presentation.	The	adoption	of	the	guidance	did	not	materially change	the	Firm's	results	of	operations	on	a	managed	basis	as	the	Firm	had previously	presented	and	will	continue	to	present	the	revenue	from	such investments	on	an	FTE	basis	in	other	income	for	the	purposes	of	managed	basis reporting.

Management	also	uses	certain	non-GAAP	financial	measures	at	the	business- segment	level,	because	it	believes	these	other	non-GAAP	financial	measures provide	information	to	investors	about	the	underlying	operational	performance and	trends	of	the	particular	business	segment	and,	therefore,	facilitate	a comparison	of	the	business	segment	with	the	performance	of	its	competitors. Non-	GAAP	financial	measures	used	by	the	Firm	may	not	be	comparable	to similarly	named	non-GAAP	financial	measures	used	by	other	companies.

The	following	summary	table	provides	a	reconciliation	from	the	Firm's	reported	U.S.	GAAP	results	to	managed	basis.

|  |  | 2015 |  |  | 2014 |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\nDecember\t31,\n(in\tmillions,\texcept\tratios) | Reported\nResults | Fully\ttaxable-\nequivalent\nadjustments(a) | Managed\nbasis | Reported\nResults | Fully\ttaxable-\nequivalent\nadjustments(a) | Managed\nbasis | Reported\nResults | Fully\ttaxable-\nequivalent\nadjustments(a) | Managed\nbasis |
| Other\tincome | $3,032 | $1,980 | $5,012 | $3,013 | $1,788 | $4,801 | $4,608 | $1,660 | $6,268 |
| Total\tnoninterest\trevenue | 50,033 | 1,980 | 52,013 | 51,478 | 1,788 | 53,266 | 54,048 | 1,660 | 55,708 |
| Net\tinterest\tincome | 43,510 | 1,110 | 44,620 | 43,634 | 985 | 44,619 | 43,319 | 697 | 44,016 |
| Total\tnet\trevenue | 93,543 | 3,090 | 96,633 | 95,112 | 2,773 | 97,885 | 97,367 | 2,357 | 99,724 |
| Pre-provision\tprofit | 34,529 | 3,090 | 37,619 | 33,838 | 2,773 | 36,611 | 26,900 | 2,357 | 29,257 |
| Income\tbefore\tincome\ttax\texpense | 30,702 | 3,090 | 33,792 | 30,699 | 2,773 | 33,472 | 26,675 | 2,357 | 29,032 |
| Income\ttax\texpense | 6,260 | 3,090 | 9,350 | 8,954 | 2,773 | 11,727 | 8,789 | 2,357 | 11,146 |
| Overhead\tratio | 63% | NM | 61% | 64% | NM | 63% | 72% | NM | 71% |

(a) Predominantly	recognized	in	CIB	and	CB	business	segments	and	Corporate

# Calculation	of	certain	U.S.	GAAP	and	non-GAAP	financial	measures

Certain	U.S.	GAAP	and	non-GAAP	financial	measures	are	calculated	as	follows:

# Book	value	per	share	("BVPS")

Common	stockholders'	equity	at	period-end	/ Common	shares	at	period-end

# Overhead	ratio

Total	noninterest	expense	/	Total	net	revenue

# Return	on	assets	("ROA")

Reported	net	income	/	Total	average	assets

# Return	on	common	equity	("ROE")

Net	income*	/	Average	common	stockholders'	equity

# Return	on	tangible	common	equity	("ROTCE")

Net	income*	/	Average	tangible	common	equity

# Tangible	book	value	per	share	("TBVPS")

Tangible	common	equity	at	period-end	/	Common	shares	at	period-end

# *	Represents	net	income	applicable	to	common	equity

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	earnings	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	meaningful	to	the	Firm,	as	well	as	investors and	analysts,	in	assessing	the	Firm's	use	of	equity.

Additionally,	certain	credit	and	capital	metrics	and	ratios	disclosed	by	the	Firm are	non-GAAP	measures.	For	additional	information	on	these	non-GAAP measures,	see	Credit	Risk	Management	on	pages	112–132,	and	Capital Management	on	pages	149–158.

# Tangible	common	equity

|  | Period-end | Period-end | Average | Average | Average |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Dec\t31, | Dec\t31, |  | Year\tended\tDecember\t31, |  |
| (in\tmillions,\texcept\tper\tshare\tand\tratio\tdata) | 2015 | 2014 | 2015 | 2014 | 2013 |
| Common\tstockholders'\tequity | $221,505 | $211,664 | $215,690 | $207,400 | $196,409 |
| Less:\tGoodwill | 47,325 | 47,647 | 47,445 | 48,029 | 48,102 |
| Less:\tCertain\tidentifiable\tintangible\tassets | 1,015 | 1,192 | 1,092 | 1,378 | 1,950 |
| Add:\tDeferred\ttax\tliabilities(a) | 3,148 | 2,853 | 2,964 | 2,950 | 2,885 |
| Tangible\tcommon\tequity | $176,313 | $165,678 | $170,117 | $160,943 | $149,242 |
| Return\ton\ttangible\tcommon\tequity | NA | NA | 13% | 13% | 11% |
| Tangible\tbook\tvalue\tper\tshare | $48.13 | $44.60 | NA | NA | N/A |
| (a)\nRepresents\tdeferred\ttax\tliabilities\trelated\tto\ttax-deductible\tgoodwill\tand\tto\tidentifiable\tintangibles\tcreated\tin\tnontaxable\ttransactions,\twhich\tare\tnetted\tagainst\tgoodwill\tand\tother\tintangibles\nwhen\tcalculating\tTCE. |  |  |  |  |  |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  | 81 |

(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.

# Net	interest	income	excluding	markets-based	activities	(formerly	core	net interest	income)

In	addition	to	reviewing	net	interest	income	on	a	managed	basis,	management also	reviews	net	interest	income	excluding	CIB's	markets-based	activities	to assess	the	performance	of	the	Firm's	lending,	investing	(including	asset-liability management)	and	deposit-raising	activities.	The	data	presented	below	are	non- GAAP	financial	measures	due	to	the	exclusion	of	CIB's	markets-based	net interest	income	and	related	assets.	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.

# Net	interest	income	excluding	CIB	markets-based	activities	data

| (in	millions,	except	rates)<br>Net	interest	income	–<br>managed	basis(a)(b) | 2015<br>$44,620 | 2014<br>$44,619 | 2013<br>$44,016 |
| :--- | :--- | :--- | :--- |
| Less:\tMarkets-based\tnet\ninterest\tincome | 4,813 | 5,552 | 5,492 |
| Net\tinterest\tincome\nexcluding\tmarkets(a) | $39,807 | $39,067 | $38,524 |
| Average\tinterest-earning\nassets | $2,088,242 | $2,049,093 | $1,970,231 |
| Less:\tAverage\tmarkets-based\ninterest-earning\tassets | 493,225 | 510,261 | 504,218 |
| Average\tinterest-earning\nassets\texcluding\tmarkets | $1,595,017 | $1,538,832 | $1,466,013 |
| Net\tinterest\tyield\ton\taverage |  |  |  |
| interest-earning\tassets\t– |  |  |  |
| managed\tbasis | 2.14% | 2.18% | 2.23% |
| Net\tinterest\tyield\ton\taverage |  |  |  |
| markets-based\tinterest- |  |  |  |
| earning\tassets | 0.97 | 1.09 | 1.09 |
| Net\tinterest\tyield\ton\taverage |  |  |  |
| interest-earning\tassets |  |  |  |
| excluding\tmarkets | 2.50% | 2.54% | 2.63% |

(a) Interest	includes	the	effect	of	related	hedging	derivatives.	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	80.

Net	interest	income	excluding	CIB's	markets-based	activities	increased	by	$740 million	in	2015	to	$39.8	billion,	and	average	interest-earning	assets	increased	by $56.2	billion	to	$1.6	trillion.	The	increase	in	net	interest	income	in	2015 predominantly	reflected	higher	average	loan	balances	and	lower	interest	expense on	deposits.	The	increase	was	partially	offset	by	lower	loan	yields	and	lower investment	securities	net	interest	income.	The	increase	in	average	interest- earning	assets	largely	reflected	the	impact	of	higher	average	deposits	with	banks. These	changes	in	net	interest	income	and	interest-earning	assets	resulted	in	the net	interest	yield	decreasing	by	4	basis	points	to	2.50%	for	2015.

Net	interest	income	excluding	CIB's	markets-based	activities	increased	by	$543 million	in	2014	to	$39.1	billion,	and	average	interest-earning	assets	increased	by $72.8	billion	to	$1.5	trillion.	The	increase	in	net	interest	income	in	2014 predominantly	reflected	higher	yields	on	investment	securities,	the	impact	of lower	interest	expense,	and	higher	average	loan	balances.	The	increase	was partially	offset	by	lower	yields	on	loans	due	to	the	run-off	of	higher-yielding loans	and	new	originations	of	lower-yielding	loans.	The	increase	in	average interest-earning	assets	largely	reflected	the	impact	of	higher	average	balance	of deposits	with	banks.	These	changes	in	net	interest	income	and	interest-earning assets	resulted	in	the	net	interest	yield	decreasing	by	9	basis	points	to	2.54%	for 2014.

# BUSINESS	SEGMENT	RESULTS

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	80–82.

# JPMorgan	Chase

# Consumer	Businesses

# Wholesale	Businesses

	•	Credit	Adjustments	&

Other

# Description	of	business	segment	reporting	methodology

Results	of	the	business	segments	are	intended	to	reflect	each	segment	as	if	it	were essentially	a	stand-alone	business.	The	management	reporting	process	that derives	business	segment	results	allocates	income	and	expense	using	market- based	methodologies.	The	Firm	periodically	assesses	the	assumptions, methodologies	and	reporting	classifications	used	for	segment	reporting,	and further	refinements	may	be	implemented	in	future	periods.

# Revenue	sharing

When	business	segments	join	efforts	to	sell	products	and	services	to	the	Firm's clients,	the	participating	business	segments	agree	to	share	revenue	from	those transactions.	The	segment	results	reflect	these	revenue-sharing	agreements.

# Funds	transfer	pricing

Funds	transfer	pricing	is	used	to	allocate	interest	income	and	expense	to	each business	and	transfer	the	primary	interest	rate	risk	exposures	to	the	Treasury group	within	Corporate.	The	allocation	process	is	unique	to	each	business segment	and	considers	the	interest	rate	risk,	liquidity	risk	and	regulatory requirements	of	that	segment	as	if	it	were	operating	independently,	and	as compared	with	its	stand-alone	peers.	This	process	is	overseen	by	senior management	and	reviewed	by	the	Firm's	Asset-Liability	Committee	("ALCO").

	•	Real	Estate	Banking

# Preferred	stock	dividend	allocation

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.	This	cost	is	included	as	a reduction	to	net	income	applicable	to	common	equity	in	order	to	be	consistent with	the	presentation	of	firmwide	results.

# Business	segment	capital	allocation	changes

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	the	equity	allocations	to	its lines	of	business	as	refinements	are	implemented.	Each	business	segment	is allocated	capital	by	taking	into	consideration	stand-alone	peer	comparisons, regulatory	capital	requirements	(as	estimated	under	Basel	III	Advanced	Fully Phased-In	rules)	and	economic	risk.	The	amount	of	capital	assigned	to	each business	is	referred	to	as	equity.		For	further	information	about	line	of	business capital,	see	Line	of	business	equity	on	page	156.

# Expense	allocation

Where	business	segments	use	services	provided	by	corporate	support	units,	or another	business	segment,	the	costs	of	those	services	are	allocated	to	the respective	business	segments.	The	expense	is	generally	allocated	based	on	actual cost	and	use	of	services	provided.	In	contrast,	certain	other	costs	related	to corporate	support

units,	or	to	certain	technology	and	operations,	are	not	allocated	to	the	business segments	and	are	retained	in	Corporate.	Expense	retained	in	Corporate	generally includes	parent	company	costs	that	would	not	be	incurred	if	the

segments	were	stand-alone	businesses;	adjustments	to	align	corporate	support units;	and	other	items	not	aligned	with	a	particular	business	segment.

# Segment	Results	–	Managed	Basis

The	following	tables	summarize	the	business	segment	results	for	the	periods	indicated.

# CONSUMER	&	COMMUNITY	BANKING

# Consumer	&	Community	Banking	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	(including	Consumer	Banking/Chase	Wealth Management	and	Business	Banking),	Mortgage	Banking	(including Mortgage	Production,	Mortgage	Servicing	and	Real	Estate	Portfolios)	and Card,	Commerce	Solutions	&	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	consisting	of residential	mortgages	and	home	equity	loans.	Card	issues	credit	cards	to consumers	and	small	businesses,	offers	payment	processing	services	to merchants,	and	provides	auto	loans	and	leases	and	student	loan	services.

# Selected	income	statement	data

| (in	millions,	except	ratios) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Lending-\tand\tdeposit-related\tfees | $3,137 | $3,039 | $2,983 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 2,172 | 2,096 | 2,116 |
| Mortgage\tfees\tand\trelated\tincome | 2,511 | 3,560 | 5,195 |
| Card\tincome | 5,491 | 5,779 | 5,785 |
| All\tother\tincome | 2,281 | 1,463 | 1,473 |
| Noninterest\trevenue | 15,592 | 15,937 | 17,552 |
| Net\tinterest\tincome | 28,228 | 28,431 | 28,985 |
| Total\tnet\trevenue | 43,820 | 44,368 | 46,537 |
| Provision\tfor\tcredit\tlosses | 3,059 | 3,520 | 335 |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 9,770 | 10,538 | 11,686 |
| Noncompensation\texpense | 15,139 | 15,071 | 16,156 |
| Total\tnoninterest\texpense | 24,909 | 25,609 | 27,842 |
| Income\tbefore\tincome\ttax\texpense | 15,852 | 15,239 | 18,360 |
| Income\ttax\texpense | 6,063 | 6,054 | 7,299 |
| Net\tincome | $9,789 | $9,185 | $11,061 |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity | 18% | 18% | 23% |
| Overhead\tratio | 57 | 58 | 60 |

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.	For	additional	information,	see Explanation	and	Reconciliation	of	the	Firm's	Use	of	Non-GAAP	Financial	Measures.

Consumer	&	Community	Banking	net	income	was	$9.8	billion,	an	increase	of 7%	compared	with	the	prior	year,	driven	by	lower	noninterest	expense	and	lower provision	for	credit	losses,	largely	offset	by	lower	net	revenue.

Net	revenue	was	$43.8	billion,	a	decrease	of	1%	compared	with	the	prior	year. Net	interest	income	was	$28.2	billion,	down	1%,	driven	by	spread	compression, predominantly	offset	by	higher	deposit	and	loan	balances,	and	improved	credit quality	including	lower	reversals	of	interest	and	fees	due	to	lower	net	charge-offs in	Credit	Card.	Noninterest	revenue	was	$15.6	billion,	down	2%,	driven	by	lower mortgage	fees	and	related	income,	predominantly	offset	by	higher	auto	lease	and card	sales	volume,	and	the	impact	of	non-core	portfolio	exits	in	Card	in	the	prior year.

The	provision	for	credit	losses	was	$3.1	billion,	a	decrease	of	13%	from	the	prior year,	reflecting	lower	net	charge-offs,	partially	offset	by	a	lower	reduction	in	the allowance	for	loan	losses.	The	current-year	provision	reflected	a	$1.0	billion reduction	in	the	allowance	for	loan	losses,	compared	with	a	$1.3	billion	reduction in	the	prior	year.

Noninterest	expense	was	$24.9	billion,	a	decrease	of	3%	from	the	prior	year, driven	by	lower	Mortgage	Banking	expense.

Consumer	&	Community	Banking	net	income	was	$9.2	billion,	a	decrease	of 17%	compared	with	the	prior	year,	due	to	higher	provision	for	credit	losses	and lower	net	revenue,	partially	offset	by	lower	noninterest	expense.

Net	revenue	was	$44.4	billion,	a	decrease	of	5%	compared	with	the	prior	year. Net	interest	income	was	$28.4	billion,	down	2%,	driven	by	spread	compression and	lower	mortgage	warehouse	balances,	largely	offset	by	higher	deposit balances	in	Consumer	&	Business	Banking	and	higher	loan	balances	in	Credit Card.	Noninterest	revenue	was	$16.0	billion,	a	decrease	of	9%,	driven	by	lower mortgage	fees	and	related	income.

The	provision	for	credit	losses	was	$3.5	billion,	compared	with	$335	million	in the	prior	year.	The	current-year	provision	reflected	a	$1.3	billion	reduction	in	the allowance	for	loan	losses	and	total	net	charge-offs	of	$4.8	billion.	The	prior-year provision	reflected	a	$5.5	billion	reduction	in	the	allowance	for	loan	losses	and total	net	charge-offs	of	$5.8	billion.

# Selected	metrics

| (in	millions,	except	headcount) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\n(period-end) |  |  |  |
| Total\tassets | $502,652 | $455,634 | $452,929 |
| Trading\tassets\t–\tloans(a) | 5,953 | 8,423 | 6,832 |
| Loans: |  |  |  |
| Loans\tretained | 445,316 | 396,288 | 393,351 |
| Loans\theld-for-sale(b) | 542 | 3,416 | 940 |
| Total\tloans | 445,858 | 399,704 | 394,291 |
| Core\tloans | 341,881 | 273,494 | 246,751 |
| Deposits | 557,645 | 502,520 | 464,412 |
| Equity(c) | 51,000 | 51,000 | 46,000 |
| Selected\tbalance\tsheet\tdata\n(average) |  |  |  |
| Total\tassets | $472,972 | $447,750 | $456,468 |
| Trading\tassets\t–\tloans(a) | 7,484 | 8,040 | 15,603 |
| Loans: |  |  |  |
| Loans\tretained | 414,518 | 389,967 | 392,797 |
| Loans\theld-for-sale\t(d) | 2,062 | 917 | 209 |
| Total\tloans | $416,580 | $390,884 | $393,006 |
| Core\tloans | 301,700 | 253,803 | 234,135 |
| Deposits | 530,938 | 486,919 | 453,304 |
| Equity(c) | 51,000 | 51,000 | 46,000 |
| Headcount | 127,094 | 137,186 | 151,333 |

(a) Predominantly	consists	of	prime	mortgages	originated	with	the	intent	to	sell	that	are	accounted	for	at fair	value.

(b) Included	period-end	credit	card	loans	held-for-sale	of	$76	million,	$3.0	billion	and	$326	million	at December	31,	2015,	2014	and	2013,	respectively.	These	amounts	were	excluded	when	calculating delinquency	rates	and	the	allowance	for	loan	losses	to	period-end	loans.

(c) Equity	is	allocated	to	the	sub-business	segments	with	$5.0	billion	and	$3.0	billion	of	capital	in	2015 and	2014,	respectively,	held	at	the	CCB	level	related	to	legacy	mortgage	servicing	matters.

(d) Included	average	credit	card	loans	held-for-sale	of	$1.6	billion,	$509	million	and	$95	million	for	the years	ended	December	31,	2015,	2014	and	2013,	respectively.	These	amounts	are	excluded	when calculating	the	net	charge-off	rate.

| otherwise	noted) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Credit\tdata\tand\tquality\tstatistics |  |  |  |
| Net\tcharge-offs(a) | $4,084 | $4,773 | $5,826 |
| Nonaccrual\tloans(b)(c) | 5,313 | 6,401 | 7,455 |
| Nonperforming\tassets(b)(c) | 5,635 | 6,872 | 8,109 |
| Allowance\tfor\tloan\tlosses(a) | 9,165 | 10,404 | 12,201 |
| Net\tcharge-off\trate(a) | 0.99% | 1.22% | 1.48% |
| Net\tcharge-off\trate,\texcluding\tPCI\nloans | 1.10 | 1.40 | 1.73 |
| Allowance\tfor\tloan\tlosses\tto\tperiod-\nend\tloans\tretained | 2.06 | 2.63 | 3.10 |
| Allowance\tfor\tloan\tlosses\tto\tperiod- |  |  |  |
| end\tloans\tretained,\texcluding\tPCI |  |  |  |
| loans(d) | 1.59 | 2.02 | 2.36 |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| nonaccrual\tloans\tretained,\texcluding |  |  |  |
| credit\tcard(b)(d) | 57 | 58 | 57 |
| Nonaccrual\tloans\tto\ttotal\tperiod-end |  |  |  |
| loans,\texcluding |  |  |  |
| credit\tcard | 1.69 | 2.38 | 2.80 |
| Nonaccrual\tloans\tto\ttotal\tperiod-end |  |  |  |
| loans,\texcluding\tcredit\tcard\tand\tPCI |  |  |  |
| loans(b) | 1.94 | 2.88 | 3.49 |
| Business\tmetrics |  |  |  |
| Number\tof: |  |  |  |
| Branches | 5,413 | 5,602 | 5,630 |
| ATMs | 17,777 | 18,056 | 20,290 |
| Active\tonline\tcustomers\t(in\nthousands)(e) | 39,242 | 36,396 | 33,742 |
| Active\tmobile\tcustomers\t(in\nthousands) | 22,810 | 19,084 | 15,629 |
| CCB\thouseholds\t(in\tmillions) | 57.8 | 57.2 | 56.7 |

(a) Net	charge-offs	and	the	net	charge-off	rates	excluded	 $208	million,	$533	million,	and	$53	million	of write-offs	in	the	PCI	portfolio	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively. These	write-offs	decreased	the	allowance	for	loan	losses	for	PCI	loans.	For	further	information	on PCI	write-offs,	see	Allowance	for	Credit	Losses	on pages	130–132.

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

(c) At	December	31,	2015,	2014	and	2013,	nonperforming	assets	excluded:	(1)	mortgage	loans	insured by	U.S.	government	agencies	of	$6.3	billion,	$7.8	billion	and	$8.4	billion,	respectively,	that	are	90	or more	days	past	due;	(2)	student	loans	insured	by	U.S.	government	agencies	under	the	Federal	Family Education	Loan	Program	("FFELP")	of	$290	million,	$367	million	and	$428	million	respectively, that	are	90	or	more	days	past	due;	(3)	real	estate	owned	("REO")	insured	by	U.S.	government agencies	of	$343	million,	$462	million	and	$2.0	billion,	respectively.	These	amounts	have	been excluded	based	upon	the	government	guarantee.

(d) The	allowance	for	loan	losses	for	PCI	loans	of	$2.7	billion,	$3.3	billion	and	$4.2	billion	at December	31,	2015,	2014,	and	2013,	respectively;	these	amounts	were	also	excluded	from	the applicable	ratios.

(e) Users	of	all	internet	browsers	and	mobile	platforms	(mobile	smartphone,	tablet	and	SMS)	who	have logged	in	within	the	past	90	days.

# Consumer	&	Business	Banking

Consumer	&	Business	Banking	net	income	was	$3.6	billion,	an	increase	of	4% compared	with	the	prior	year.

Net	revenue	was	$18.0	billion,	down	1%	compared	with	the	prior	year.	Net interest	income	was	$10.4	billion,	down	6%	due	to	deposit	spread	compression, largely	offset	by	higher	deposit	balances.	Noninterest	revenue	was	$7.5	billion, up	5%,	driven	by	higher	debit	card	revenue,	reflecting	an	increase	in	transaction volume,	higher	deposit-related	fees	as	a	result	of	an	increase	in	customer accounts	and	a	gain	on	the	sale	of	a	branch.

Noninterest	expense	was	$11.9	billion,	a	decrease	of	2%	from	the	prior	year, driven	by	lower	headcount-related	expense	due	to	branch	efficiencies,	partially offset	by	higher	legal	expense.

Consumer	&	Business	Banking	net	income	was	$3.4	billion,	an	increase	of 17%,	compared	with	the	prior	year,	due	to	higher	net	revenue.

Net	revenue	was	$18.2	billion,	up	5%	compared	with	the	prior	year.	Net	interest income	was	$11.1	billion,	up	4%	compared	with	the	prior	year,	driven	by	higher deposit	balances,	largely	offset	by	deposit	spread	compression.	Noninterest revenue	was	$7.2	billion,	up	6%,	driven	by	higher	investment	revenue,	reflecting an	increase	in	client	investment	assets,	higher	debit	card	revenue,	reflecting	an increase	in	transaction	volume,	and	higher	deposit-related	fees	as	a	result	of	an increase	in	customer	accounts.

(a) Includes	checking	accounts	and	Chase	Liquid ®	cards.

# Mortgage	Banking

# Selected	Financial	statement	data

As	of	or	for	the	year	ended	December 31,

| (in	millions,	except	ratios) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Mortgage\tfees\tand\trelated\tincome(a) | $2,511 | $3,560 | $5,195 |
| All\tother\tincome | (65) | 37 | 283 |
| Noninterest\trevenue | 2,446 | 3,597 | 5,478 |
| Net\tinterest\tincome | 4,371 | 4,229 | 4,758 |
| Total\tnet\trevenue | 6,817 | 7,826 | 10,236 |
| Provision\tfor\tcredit\tlosses | (690) | (217) | (2,681) |
| Noninterest\texpense | 4,607 | 5,284 | 7,602 |
| Income\tbefore\tincome\ttax\texpense | 2,900 | 2,759 | 5,315 |
| Net\tincome | $1,778 | $1,668 | $3,211 |
| Return\ton\tcommon\tequity | 10% | 9% | 16% |
| Overhead\tratio | 68 | 68 | 74 |
| Equity\t(period-end\tand\taverage) | $16,000 | $18,000 | $19,500 |

# (a) For	further	information	on	mortgage	fees	and	related	income,	see	Note	17.

Mortgage	Banking	net	income	was	$1.8	billion,	an	increase	of	7%	from	the prior	year,	driven	by	lower	noninterest	expense	and	a	higher	benefit	from	the provision	for	credit	losses,	predominantly	offset	by	lower	net	revenue.

Net	revenue	was	$6.8	billion,	a	decrease	of	13%	compared	with	the	prior	year. Net	interest	income	was	$4.4	billion,	an	increase	of	3%	from	the	prior	year,	due to	higher	loan	balances	resulting	from	originations	of	high-quality	loans	that have	been	retained,	partially	offset	by	spread	compression.	Noninterest	revenue was	$2.4	billion,	a	decrease	of	32%	from	the	prior	year.	This	decrease	was	driven by	lower	servicing	revenue,	largely	as	a	result	of	lower	average	third-party	loans serviced	and	lower	net	production	revenue,	reflecting	a	lower	repurchase	benefit.

The	provision	for	credit	losses	was	a	benefit	of	$690	million,	compared	to	a benefit	of	$217	million	in	the	prior	year,	reflecting	a	larger	reduction	in	the allowance	for	loan	losses	and	lower	net	charge-offs.	The	current-year	provision reflected	a	$600	million	reduction	in	the	non	credit-impaired	allowance	for	loan losses	and	a	$375	million	reduction	in	the	purchased	credit-impaired	allowance for	loan	losses;	the	prior-year	provision	included	a	$400	million	reduction	in	the non	credit-impaired	allowance	for	loan	losses	and	a	$300	million	reduction	in	the purchased	credit-impaired	allowance	for	loan	losses.	These	reductions	were	due to	continued	improvement	in	home	prices	and	delinquencies	in	both	periods,	as well	as	increased	granularity	in	the	impairment	estimates	in	the	current	year.

Noninterest	expense	was	$4.6	billion,	a	decrease	of	13%	from	the	prior	year, reflecting	lower	headcount-related	expense	and	lower	professional	fees.

Mortgage	Banking	net	income	was	$1.7	billion,	a	decrease	of	48%,	from	the prior	year,	driven	by	a	lower	benefit	from	the	provision	for	credit	losses	and lower	net	revenue,	partially	offset	by	lower	noninterest	expense.

Net	revenue	was	$7.8	billion,	a	decrease	of	24%,	compared	with	the	prior	year. Net	interest	income	was	$4.2	billion,	a	decrease	of	11%,	driven	by	spread compression	and	lower	loan	balances	due	to	portfolio	runoff	and	lower warehouse	balances.	Noninterest	revenue	was	$3.6	billion,	a	decrease	of	34%, driven	by	lower	net	production	revenue,	largely	reflecting	lower	volumes,	lower servicing	revenue,	largely	as	a	result	of	lower	average	third-party	loans	serviced, and	lower	revenue	from	an	exited	non-core	product,	largely	offset	by	higher MSR	risk	management	income	and	lower	MSR	asset	amortization	expense	as	a result	of	lower	MSR	asset	value.	See	Note	17	for	further	information	regarding changes	in	value	of	the	MSR	asset	and	related	hedges,	and	mortgage	fees	and related	income.

The	provision	for	credit	losses	was	a	benefit	of	$217	million,	compared	to	a benefit	of	$2.7	billion	in	the	prior	year,	reflecting	a	smaller	reduction	in	the allowance	for	loan	losses,	partially	offset	by	lower	net	charge-offs.	The	current- year	provision	reflected	a	$400	million	reduction	in	the	non	credit-impaired allowance	for	loan	losses	and	$300	million	reduction	in	the	purchased	credit- impaired	allowance	for	loan	losses;	the	prior-year	provision	included	a	$2.3 billion	reduction	in	the	non	credit-impaired	allowance	for	loan	losses	and	a	$1.5 billion	reduction	in	the	purchased	credit-impaired	allowance	for	loan	losses. These	reductions	were	due	to	continued	improvement	in	home	prices	and delinquencies.

Noninterest	expense	was	$5.3	billion,	a	decrease	of	30%,	from	the	prior	year, reflecting	lower	headcount-related	expense,	the	absence	of	non-mortgage-backed securities	("MBS")	related	legal	expense,	lower	expense	on	foreclosure-related matters,	and	lower	FDIC-related	expense.

# Supplemental	information

For	the	year	ended	December	31,

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tinterest\tincome: |  |  |  |
| Mortgage\tProduction\tand\tMortgage\nServicing | $575 | $736 | $887 |
| Real\tEstate\tPortfolios | 3,796 | 3,493 | 3,871 |
| Total\tnet\tinterest\tincome | $4,371 | $4,229 | $4,758 |
| Noninterest\texpense: |  |  |  |
| Mortgage\tProduction | $1,491 | $1,644 | 3,083 |
| Mortgage\tServicing | 2,041 | 2,267 | 2,966 |
| Real\tEstate\tPortfolios | 1,075 | 1,373 | 1,553 |
| Total\tnoninterest\texpense | $4,607 | $5,284 | $7,602 |

# Selected	balance	sheet	data

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Trading\tassets\t–\tloans\t(period-end) (a) | $5,953 | $8,423 | $6,832 |
| (a)\nTrading\tassets\t–\tloans\t(average) | 7,484 | 8,040 | 15,603 |
| Loans,\texcluding\tPCI\tloans |  |  |  |
| Period-end\tloans\towned |  |  |  |
| Home\tequity | 43,745 | 50,899 | 57,863 |
| Prime\tmortgage,\tincluding\toption\tadjustable\nrate\tmortgages\t("ARMs") | 134,361 | 80,414 | 65,213 |
| Subprime\tmortgage | 3,732 | 5,083 | 7,104 |
| Other | 398 | 477 | 551 |
| Total\tperiod-end\tloans\towned | 182,236 | 136,873 | 130,731 |
| Average\tloans\towned |  |  |  |
| Home\tequity | 47,216 | 54,410 | 62,369 |
| Prime\tmortgage,\tincluding\toption\tARMs | 107,723 | 71,491 | 61,597 |
| Subprime\tmortgage | 4,434 | 6,257 | 7,687 |
| Other | 436 | 511 | 588 |
| Total\taverage\tloans\towned | 159,809 | 132,669 | 132,241 |
| PCI\tloans |  |  |  |
| Period-end\tloans\towned |  |  |  |
| Home\tequity | 14,989 | 17,095 | 18,927 |
| Prime\tmortgage | 8,893 | 10,220 | 12,038 |
| Subprime\tmortgage | 3,263 | 3,673 | 4,175 |
| Option\tARMs | 13,853 | 15,708 | 17,915 |
| Total\tperiod-end\tloans\towned | 40,998 | 46,696 | 53,055 |
| Average\tloans\towned |  |  |  |
| Home\tequity | 16,045 | 18,030 | 19,950 |
| Prime\tmortgage | 9,548 | 11,257 | 12,909 |
| Subprime\tmortgage | 3,442 | 3,921 | 4,416 |
| Option\tARMs | 14,711 | 16,794 | 19,236 |
| Total\taverage\tloans\towned | 43,746 | 50,002 | 56,511 |
| Total\tMortgage\tBanking |  |  |  |
| Period-end\tloans\towned |  |  |  |
| Home\tequity | 58,734 | 67,994 | 76,790 |
| Prime\tmortgage,\tincluding\toption\tARMs | 157,107 | 106,342 | 95,166 |
| Subprime\tmortgage | 6,995 | 8,756 | 11,279 |
| Other | 398 | 477 | 551 |
| Total\tperiod-end\tloans\towned | 223,234 | 183,569 | 183,786 |
| Average\tloans\towned |  |  |  |
| Home\tequity | 63,261 | 72,440 | 82,319 |
| Prime\tmortgage,\tincluding\toption\tARMs | 131,982 | 99,542 | 93,742 |
| Subprime\tmortgage | 7,876 | 10,178 | 12,103 |
| Other | 436 | 511 | 588 |
| Total\taverage\tloans\towned | 203,555 | 182,671 | 188,752 |

# Credit	data	and	quality	statistics

| 31, |  |  |  |
| :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratios) | 2015 | 2014 | 2013 |
| Net\tcharge-offs/(recoveries),\texcluding\nPCI\tloans(a) |  |  |  |
| Home\tequity | $283 | $473 | $966 |
| Prime\tmortgage,\tincluding\toption\nARMs | 48 | 28 | 53 |
| Subprime\tmortgage | (53) | (27) | 90 |
| Other | 7 | 9 | 10 |
| Total\tnet\tcharge-offs/(recoveries),\nexcluding\tPCI\tloans | 285 | 483 | 1,119 |
| Net\tcharge-off/(recovery)\trate,\texcluding\nPCI\tloans |  |  |  |
| Home\tequity | 0.60% | 0.87% | 1.55% |
| Prime\tmortgage,\tincluding\toption\nARMs | 0.04 | 0.04 | 0.09 |
| Subprime\tmortgage | (1.22) | (0.43) | 1.17 |
| Other | 1.61 | 1.76 | 1.70 |
| Total\tnet\tcharge-off/(recovery)\trate,\nexcluding\tPCI\tloans | 0.18 | 0.37 | 0.85 |
| Net\tcharge-off/(recovery)\trate\t–\nreported(a) |  |  |  |
| Home\tequity | 0.45 | 0.65 | 1.17 |
| Prime\tmortgage,\tincluding\toption\nARMs | 0.04 | 0.03 | 0.06 |
| Subprime\tmortgage | (0.68) | (0.27) | 0.74 |
| Other | 1.61 | 1.76 | 1.70 |
| Total\tnet\tcharge-off/(recovery)\trate\n–\treported | 0.14 | 0.27 | 0.59 |
| 30+\tday\tdelinquency\trate,\texcluding\tPCI |  |  |  |
| loans(b)(c) | 1.57 | 2.61 | 3.55 |
| Allowance\tfor\tloan\tlosses,\texcluding\nPCI\tloans | $1,588 | $2,188 | $2,588 |
| Allowance\tfor\tPCI\tloans(a) | 2,742 | 3,325 | 4,158 |
| Allowance\tfor\tloan\tlosses | 4,330 | 5,513 | 6,746 |
| Nonperforming\tassets(d)(e) | 4,971 | 6,175 | 7,438 |
| Allowance\tfor\tloan\tlosses\tto\tperiod-end\nloans\tretained | 1.94% | 3.01% | 3.68% |
| Allowance\tfor\tloan\tlosses\tto\tperiod-end\nloans\tretained,\texcluding\tPCI\tloans | 0.87 | 1.60 | 1.99 |

(b) At	December	31,	2015,	2014	and	2013,	excluded	mortgage	loans	insured	by	U.S.	government	agencies	of	$8.4 billion	$9.7	billion	and	$9.6	billion,	respectively,	that	are	30	or	more	days	past	due.	These	amounts	have	been excluded	based	upon	the	government	guarantee.	For	further	discussion,	see	Note	14	which	summarizes	loan delinquency	information.

(d) At	December	31,	2015,	2014	and	2013,	nonperforming	assets	excluded:	(1)	mortgage	loans	insured	by	U.S. government	agencies	of	$6.3	billion,	$7.8	billion	and	$8.4	billion,	respectively,	that	are	90	or	more	days	past due	and	(2)	REO	insured	by	U.S.	government	agencies	of	$343	million,	$462	million	and	$2.0	billion, respectively.	These	amounts	have	been	excluded	based	upon	the	government	guarantee.

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

# Business	metrics

| (in	billions,	except	ratios) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Mortgage\torigination\tvolume\nby\tchannel |  |  |  |
| Retail | $36.1 | $29.5 | 77.0 |
| Correspondent | 70.3 | 48.5 | 88.5 |
| Total\tmortgage\norigination\tvolume(a) | 106.4 | 78.0 | 165.5 |
| Total\tloans\tserviced\t(period-\nend) | 910.1 | 948.8 | 1,017.2 |
| Third-party\tmortgage\tloans\nserviced\t(period-end) | 674.0 | 751.5 | 815.5 |
| Third-party\tmortgage\tloans\nserviced\t(average) | 715.4 | 784.6 | 837.3 |
| MSR\tcarrying\tvalue\t(period-\nend) | 6.6 | 7.4 | 9.6 |
| Ratio\tof\tMSR\tcarrying\tvalue |  |  |  |
| (period-end)\tto\tthird-party |  |  |  |
| mortgage\tloans\tserviced |  |  |  |
| (period-end) | 0.98% | 0.98% | 1.18% |
| Ratio\tof\tannualized\tloan |  |  |  |
| servicing-related\trevenue\tto |  |  |  |
| third-party\tmortgage\tloans |  |  |  |
| serviced\t(average) | 0.35 | 0.36 | 0.40 |
| MSR\trevenue\tmultiple(b) | 2.80x | 2.72x | \t\t\t\t\t\t\t\t\t\t2.95x |

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

# Mortgage	servicing-related	matters

The	financial	crisis	resulted	in	unprecedented	levels	of	delinquencies	and defaults	of	1–4	family	residential	real	estate	loans.	Such	loans	required	varying degrees	of	loss	mitigation	activities.	Foreclosure	is	usually	a	last	resort,	and accordingly,	the	Firm	has	made,	and	continues	to	make,	significant	efforts	to help	borrowers	remain	in	their	homes.

The	Firm	entered	into	various	Consent	Orders	and	settlements	with	federal	and state	governmental	agencies	and	private	parties	related	to	mortgage	servicing, origination,	and	residential	mortgage-backed	securities	activities.	The requirements	of	these	Consent	Orders	and	settlements	vary,	but	in	the	aggregate, include	cash	compensatory	payments	(in	addition	to	fines)	and/or	"borrower relief,"	which	may	include	principal	reduction,	refinancing,	short	sale	assistance, and	other	specified	types	of	borrower	relief.	Other	obligations	required	under certain	Consent	Orders	and	settlements,	as	well	as	under	new	regulatory requirements,	include	enhanced	mortgage	servicing	and	foreclosure	standards and	processes.

On	June	11,	2015,	the	Firm	signed	the	Second	Amended	Mortgage	Banking Consent	Order	(the	"Amended	OCC	Consent	Order")	with	the	Office	of	the Comptroller	of	the	Currency	("OCC"),	which	focused	on	ten	remaining	open items	from	the	original	mortgage-servicing	Consent	Order	entered	into	with	the OCC	in	April	2011	and	imposed	certain	business	restrictions	on	the	Firm's mortgage	banking	activities.	The	Firm	completed	its	work	on	those	items,	and	on January	4,	2016,	the	OCC	terminated	the	Amended	OCC	Consent	Order	and lifted	the	mortgage	business	restrictions.	The	Firm	remains	under	the	mortgage- servicing	Consent	Order	entered	into	with	the	Board	of	Governors	of	the	Federal Reserve	System	("Federal	Reserve")	on	April	13,	2011,	as	amended	on	February 28,	2013	(the	"Federal	Reserve	Consent	Order").	The	Audit	Committee	of	the Board	of	Directors	will	provide	governance	and	oversight	of	the	Federal	Reserve Consent	Order	in	2016.

The	Federal	Reserve	Consent	Order	and	certain	other	mortgage-related settlements	are	the	subject	of	ongoing	reporting	to	various	regulators	and independent	overseers.	The	Firm's	compliance	with	certain	of	these	settlements is	detailed	in	periodic	reports	published	by	the	independent	overseers.	The	Firm is	committed	to	fulfilling	all	of	these	commitments	with	appropriate	due diligence	and	oversight.

# Card,	Commerce	Solutions	&	Auto

| (in	millions,	except	ratios) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Card\tincome | $3,769 | $4,173 | $4,289 |
| All\tother\tincome | 1,836 | 993 | 1,041 |
| Noninterest\trevenue | 5,605 | 5,166 | 5,330 |
| Net\tinterest\tincome | 13,415 | 13,150 | 13,559 |
| Total\tnet\trevenue | 19,020 | 18,316 | 18,889 |
| Provision\tfor\tcredit\tlosses | 3,495 | 3,432 | 2,669 |
| Noninterest\texpense(a) | 8,386 | 8,176 | 8,078 |
| Income\tbefore\tincome\ttax\texpense | 7,139 | 6,708 | 8,142 |
| Net\tincome | $4,430 | $4,074 | $4,907 |
| Return\ton\tcommon\tequity | 23% | 21% | 31% |
| Overhead\tratio | 44 | 45 | 43 |
| Equity\t(period-end\tand\taverage) | $18,500 | $19,000 | $15,500 |

Note:	Chase	Commerce	Solutions,	formerly	known	as	Merchant	Services,	includes	Chase	Paymentech, ChaseNet	and	Chase	Offers	businesses.

(a) Included	operating	lease	depreciation	expense	of	$1.4	billion,	$1.2	billion	and	$972	million	for	the years	ended	December	31,	2015,	2014	and	2013,	respectively.

Card	net	income	was	$4.4	billion,	an	increase	of	9%	compared	with	the	prior year,	driven	by	higher	net	revenue,	partially	offset	by	higher	noninterest	expense.

Net	revenue	was	$19.0	billion,	an	increase	of	4%	compared	with	the	prior	year. Net	interest	income	was	$13.4	billion,	up	2%	from	the	prior	year,	driven	by higher	loan	balances	and	improved	credit	quality	including	lower	reversals	of interest	and	fees	due	to	lower	net	charge-offs	in	Credit	Card	and	a	reduction	in the	reserve	for	uncollectible	interest	and	fees,	partially	offset	by	spread compression.	Noninterest	revenue	was	$5.6	billion,	up	8%	compared	with	the prior	year,	driven	by	higher	auto	lease	and	card	sales	volumes,	the	impact	of	non- core	portfolio	exits	in	the	prior	year	and	a	gain	on	the	investment	in	Square,	Inc. upon	its	initial	public	offering,	largely	offset	by	the	impact	of	renegotiated	co- brand	partnership	agreements	and	higher	amortization	of	new	account origination	costs.

The	provision	for	credit	losses	was	$3.5	billion,	an	increase	of	2%	compared	with the	prior	year,	reflecting	a	lower	reduction	in	the	allowance	for	loan	losses, predominantly	offset	by	lower	net	charge-offs.	The	current-year	provision reflected	a	$51	million	reduction	in	the	allowance	for	loan	losses,	primarily	due to	runoff	in	the	student	loan	portfolio.	The	prior-year	provision	included	a	$554 million	reduction	in	the	allowance	for	loan	losses,	primarily	related	to	a	decrease in	the	asset-specific	allowance	resulting	from	increased	granularity	of	the impairment	estimates	and	lower	balances	related	to	credit	card	loans	modified	in troubled	debt	restructurings	("TDRs"),	runoff	in	the	student	loan	portfolio	and lower	estimated	losses	in	auto	loans.

Noninterest	expense	was	$8.4	billion,	up	3%	from	the	prior	year,	driven	by higher	auto	lease	depreciation	and	higher	marketing	expense,	partially	offset	by lower	legal	expense.

Card	net	income	was	$4.1	billion,	a	decrease	of	17%,	compared	with	the	prior year,	predominantly	driven	by	higher	provision	for	credit	losses	and	lower	net revenue.

Net	revenue	was	$18.3	billion,	down	3%	compared	with	the	prior	year.	Net interest	income	was	$13.2	billion,	a	decrease	of	3%	from	the	prior	year, primarily	driven	by	spread	compression	in	Credit	Card	and	Auto,	partially	offset by	higher	average	loan	balances.	Noninterest	revenue	was	$5.2	billion,	down	3% from	the	prior	year.	The	decrease	was	primarily	driven	by	higher	amortization	of new	account	origination	costs	and	the	impact	of	non-core	portfolio	exits,	largely offset	by	higher	auto	lease	income	and	net	interchange	income	from	higher	sales volume.

The	provision	for	credit	losses	was	$3.4	billion,	compared	with	$2.7	billion	in	the prior	year.	The	current-year	provision	reflected	lower	net	charge-offs	and	a	$554 million	reduction	in	the	allowance	for	loan	losses.	The	reduction	in	the	allowance for	loan	losses	was	primarily	related	to	a	decrease	in	the	asset-specific	allowance resulting	from	increased	granularity	of	the	impairment	estimates	and	lower balances	related	to	credit	card	loans	modified	in	TDRs,	runoff	in	the	student	loan portfolio,	and	lower	estimated	losses	in	auto	loans.	The	prior-year	provision included	a	$1.7	billion	reduction	in	the	allowance	for	loan	losses.

Noninterest	expense	was	$8.2	billion,	up	1%	from	the	prior	year,	primarily driven	by	higher	auto	lease	depreciation	expense	and	higher	investment	in controls,	predominantly	offset	by	lower	intangible	amortization	and	lower remediation	costs.

| where	otherwise	noted) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\n(period-end) |  |  |  |
| Loans: |  |  |  |
| Credit\tCard | $131,463 | $131,048 | $127,791 |
| Auto | 60,255 | 54,536 | 52,757 |
| Student | 8,176 | 9,351 | 10,541 |
| Total\tloans | $199,894 | $194,935 | $191,089 |
| Auto\toperating\tlease\tassets | 9,182 | 6,690 | 5,512 |
| Selected\tbalance\tsheet\tdata\n(average) |  |  |  |
| Total\tassets | $206,765 | $202,609 | $198,265 |
| Loans: |  |  |  |
| Credit\tCard | 125,881 | 125,113 | 123,613 |
| Auto | 56,487 | 52,961 | 50,748 |
| Student | 8,763 | 9,987 | 11,049 |
| Total\tloans | $191,131 | $188,061 | $185,410 |
| Auto\toperating\tlease\tassets | 7,807 | 6,106 | 5,102 |
| Business\tmetrics |  |  |  |
| Credit\tCard,\texcluding\nCommercial\tCard |  |  |  |
| Sales\tvolume\t(in\tbillions) | $495.9 | $465.6 | $419.5 |
| New\taccounts\topened | 8.7 | 8.8 | 7.3 |
| Open\taccounts | 59.3 | 64.6 | 65.3 |
| Accounts\twith\tsales\tactivity | 33.8 | 34.0 | 32.3 |
| %\tof\taccounts\tacquired\tonline | 67% | 56% | 55% |
| Commerce\tSolutions |  |  |  |
| Merchant\tprocessing\tvolume\t(in\nbillions) | $949.3 | $847.9 | $750.1 |
| Total\ttransactions\t(in\tbillions) | 42.0 | 38.1 | 35.6 |
| Auto |  |  |  |
| Loan\tand\tlease\torigination\nvolume\t(in\tbillions) | 32.4 | 27.5 | 26.1 |

# The	following	are	brief	descriptions	of	selected	business	metrics	within	Card, Commerce	Solutions	&	Auto.

Card	Services	includes	the	Credit	Card	and	Commerce	Solutions	businesses.

Commerce	Solutions	is	a	business	that	primarily	processes	transactions	for merchants.

Total	transactions	–	Number	of	transactions	and	authorizations	processed	for merchants.

Sales	volume	–	Dollar	amount	of	cardmember	purchases,	net	of	returns. Open	accounts	–	Cardmember	accounts	with	charging	privileges.

Accounts	with	sales	activity	–	represents	the	number	of	cardmember	accounts	with a	sales	transaction	within	the	past	month.

Auto	origination	volume	–	Dollar	amount	of	auto	loans	and	leases	originated.

(a) Average	credit	card	loans	included	loans	held-for-sale	of	$1.6	billion,	$509	million	and	$95	million for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.	These	amounts	are	excluded      when	calculating	the	net	charge-off	rate.

(b) Period-end	credit	card	loans	included	loans	held-for-sale	of	$76	million,$3.0	billion	and	$326 million	at	December	31,	2015,	2014	and	2013,	respectively.	These	amounts	were	excluded	when calculating	delinquency	rates	and	the	allowance	for	loan	losses	to	period-end	loans.

(c) Excluded	student	loans	insured	by	U.S.	government	agencies	under	the	FFELP	of	$526	million,

    $654	million	and	$737	million	at	December	31,	2015,	2014	and	2013,	respectively,	that	are	30	or more	days	past	due.	These	amounts	have	been	excluded	based	upon	the	government	guarantee.

(d) Nonperforming	assets	excluded	student	loans	insured	by	U.S.	government	agencies	under	the	FFELP     of	$290	million,	$367	million	and	$428	million	at	December	31,	2015,	2014	and	2013,	respectively, that	are	90	or	more	days	past	due.	These	amounts	have	been	excluded	from	nonaccrual	loans	based     upon	the	government	guarantee.

# Card	Services	supplemental	information

# CORPORATE	&	INVESTMENT	BANK

The	Corporate	&	Investment	Bank,	which	consists	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.	Banking	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.	Banking	also	includes	Treasury	Services,	which	provides transaction	services,	consisting	of	cash	management	and	liquidity solutions.	Markets	&	Investor	Services	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	Securities	Services,	a	leading	global custodian	which	provides	custody,	fund	accounting	and	administration, and	securities	lending	products	principally	for	asset	managers,	insurance companies	and	public	and	private	investment	funds.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Investment\tbanking\tfees | $6,736 | $6,570 | $6,331 |
| Principal\ttransactions(a) | 9,905 | 8,947 | 9,289 |
| Lending-\tand\tdeposit-related\tfees | 1,573 | 1,742 | 1,884 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 4,467 | 4,687 | 4,713 |
| All\tother\tincome | 1,012 | 1,474 | 1,519 |
| Noninterest\trevenue | 23,693 | 23,420 | 23,736 |
| Net\tinterest\tincome | 9,849 | 11,175 | 10,976 |
| Total\tnet\trevenue(b) | 33,542 | 34,595 | 34,712 |
| Provision\tfor\tcredit\tlosses | 332 | (161) | (232) |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 9,973 | 10,449 | 10,835 |
| Noncompensation\texpense | 11,388 | 12,824 | 10,909 |
| Total\tnoninterest\texpense | 21,361 | 23,273 | 21,744 |
| Income\tbefore\tincome\ttax\texpense | 11,849 | 11,483 | 13,200 |
| Income\ttax\texpense | 3,759 | 4,575 | 4,350 |
| Net\tincome | $8,090 | $6,908 | $8,850 |

(a) Included	FVA	and	debt	valuation	adjustment	("DVA")	on	OTC	derivatives	and	structured	notes,

measured	at	fair	value.	FVA	and	DVA	gains/(losses)	were	$687	million	and	$468	million	and	$(1.9)

(b) 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;	as	well	as	tax-exempt	income	from	municipal	bond	investments	of	$1.7	billion, $1.6	billion	and	$1.5	billion	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.

| (in	millions,	except	ratios) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity | 12% | 10% | 15% |
| Overhead\tratio | 64 | 67 | 63 |
| Compensation\texpense\tas |  |  |  |
| percentage\tof\ttotal\tnet |  |  |  |
| revenue | 30 | 30 | 31 |
| Revenue\tby\tbusiness |  |  |  |
| Investment\tbanking(a) | 6,376 | 6,122 | 5,922 |
| Treasury\tServices(b) | 3,631 | 3,728 | 3,693 |
| Lending(b) | 1,461 | 1,547 | 2,147 |
| Total\tBanking(a) | 11,468 | 11,397 | 11,762 |
| Fixed\tIncome\tMarkets(a) | 12,592 | 14,075 | 15,976 |
| Equity\tMarkets(a) | 5,694 | 5,044 | 4,994 |
| Securities\tServices | 3,777 | 4,351 | 4,100 |
| Credit\tAdjustments\t&amp;\tOther(c) | 11 | (272) | (2,120) |
| Total\tMarkets\t&amp;\tInvestor\nService(a) | 22,074 | 23,198 | 22,950 |
| Total\tnet\trevenue | $33,542 | $34,595 | $34,712 |

(a) Effective	in	2015,	Investment	banking	revenue	(formerly	Investment	banking	fees)	incorporates	all revenue	associated	with	investment	banking	activities,	and	is	reported	net	of	investment	banking revenue	shared	with	other	lines	of	business;	previously	such	shared	revenue	had	been	reported	in Fixed	Income	Markets	and	Equity	Markets.	Prior	period	amounts	have	been	revised	to	conform	with the	current	period	presentation.

(b) Effective	in	2015,	Trade	Finance	revenue	was	transferred	from	Treasury	Services	to	Lending.	Prior period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.

(c) Consists	primarily	of	credit	valuation	adjustments	("CVA")	managed	by	the	credit	portfolio	group, and	FVA	and	DVA	on	OTC	derivatives	and	structured	notes.	Results	are	presented	net	of	associated hedging	activities	and	net	of	CVA	and	FVA	amounts	allocated	to	Fixed	Income	Markets	and	Equity Markets.

Net	income	was	$8.1	billion,	up	17%	compared	with	$6.9	billion	in	the	prior year.	The	increase	primarily	reflected	lower	income	tax	expenses	largely reflecting	the	release	in	2015	of	U.S.	deferred	taxes	associated	with	the restructuring	of	certain	non-U.S.	entities	and	lower	noninterest	expense	partially offset	by	lower	net	revenue,	both	driven	by	business	simplification,	as	well	as higher	provisions	for	credit	losses.

Banking	revenue	was	$11.5	billion,	up	1%	versus	the	prior	year.	Investment banking	revenue	was	$6.4	billion,	up	4%	from	the	prior	year,	driven	by	higher advisory	fees,	partially	offset	by	lower	debt	and	equity	underwriting	fees. Advisory	fees	were	$2.1	billion,	up	31%	on	a	greater	share	of	fees	for	completed transactions	as	well	as	growth	in	the	industry-wide	fee	levels.	The	Firm maintained	its	#2	ranking	for	M&A,	according	to	Dealogic.	Debt	underwriting fees	were	$3.2	billion,	down	6%,	primarily	related	to	lower	bond	underwriting and	loan	syndication	fees	on	lower	industry-wide	fee	levels.	The	Firm	ranked	#1 globally	in	fee	share	across	high	grade,	high	yield	and	loan	products.	Equity underwriting	fees	were	$1.4	billion,	down	9%,	driven	by	lower	industry-wide	fee levels.	The	Firm	was	#1	in	equity	underwriting	fees	in	2015,	up	from	#3	in	2014. Treasury	Services	revenue	was	$3.6	billion,	down	3%	compared	with	the	prior year,	primarily	driven	by	lower	net	interest	income.	Lending	revenue	was	$1.5 billion,	down	6%	from	the	prior	year,	driven	by	lower	trade	finance	revenue	on lower	loan	balances.

Markets	&	Investor	Services	revenue	was	$22.1	billion,	down	5%	from	the	prior year.	Fixed	Income	Markets	revenue	was	$12.6	billion,	down	11%	from	the	prior year,	primarily	driven	by	the	impact	of	business	simplification	as	well	as	lower revenue	in	credit-related	products	on	an	industry-wide	slowdown,	partially	offset by	increased	revenue	in	Rates	and	Currencies	&	Emerging	Markets	on	higher client	activity.	The	lower	Fixed	Income	revenue	also	reflected	higher	interest costs	on	higher	long-term	debt.	Equity	Markets	revenue	was	$5.7	billion,	up 13%,	primarily	driven	by	higher	equity	derivatives	revenue	across	all	regions. Securities	Services	revenue	was	$3.8	billion,	down	13%	from	the	prior	year, driven	by	lower	fees	as	well	as	lower	net	interest	income.

The	provision	for	credit	losses	was	$332	million,	compared	to	a	benefit	of	$161 million	in	the	prior	year,	reflecting	a	higher	allowance	for	credit	losses,	including the	impact	of	select	downgrades	within	the	Oil	&	Gas	portfolio.

Noninterest	expense	was	$21.4	billion,	down	8%	compared	with	the	prior	year, driven	by	the	impact	of	business	simplification	as	well	as	lower	legal	and compensation	expenses.

Net	income	was	$6.9	billion,	down	22%	compared	with	$8.9	billion	in	the	prior year.	These	results	primarily	reflected	higher	noninterest	expense.	Net	revenue was	$34.6	billion,	flat	compared	with	the	prior	year.

Banking	revenue	was	$11.4	billion,	down	3%	from	the	prior	year.	Investment banking	revenue	was	$6.1	billion,	up	3%	from	the	prior	year.	The	increase	was driven	by	higher	advisory	and	equity	underwriting	fees,	partially	offset	by	lower debt	underwriting	fees.	Advisory	fees	were	$1.6	billion,	up	24%	on	stronger share	of	fees	for	completed	transactions	as	well	as	growth	in	the	industry-wide fee	levels,	according	to	Dealogic.	Equity	underwriting	fees	were	$1.6	billion,	up 5%,	driven	by	higher	industry-wide	issuance.	Debt	underwriting	fees	were	$3.4 billion,	down	4%,	primarily	related	to	lower	loan	syndication	fees	on	lower industry-wide	fee	levels	and	lower	bond	underwriting	fees.	The	Firm	also	ranked #1	globally	in	fees	and	volumes	share	across	high	grade,	high	yield	and	loan products.	The	Firm	maintained	its	#2	ranking	for	M&A,	and	improved	share	of fees	both	globally	and	in	the	U.S.	compared	with	the	prior	year.	Treasury Services	revenue	was	$3.7	billion,	up	1%	compared	with	the	prior	year,	primarily driven	by	higher	net	interest	income	from	increased	deposits,	largely	offset	by business	simplification	initiatives.	Lending	revenue	was	$1.5	billion,	down	from $2.1	billion	in	the	prior	year,	driven	by	losses,	compared	with	gains	in	the	prior periods,	on	securities	received	from	restructured	loans,	as	well	as	lower	net interest	income	and	lower	trade	finance	revenue.

Markets	&	Investor	Services	revenue	was	$23.2	billion,	up	1%	from	the	prior year.	Fixed	Income	Markets	revenue	was	$14.1	billion,	down	12%	from	the	prior year,	driven	by	lower	revenues	in	Fixed	Income	primarily	from	credit-related	and rates	products	as	well	as	the	impact	of	business	simplification.	Equity	Markets revenue	was	$5.0	billion,	up	1%	as	higher	prime	services	revenue	was	partially offset	by	lower	equity	derivatives	revenue.	Securities	Services	revenue	was	$4.4 billion,	up	6%	from	the	prior	year,	primarily	driven	by	higher	net	interest	income on	increased	deposits	and	higher	fees	and	commissions.	Credit	Adjustments	& Other	revenue	was	a	loss	of	$272	million,	driven	by	net	CVA	losses	partially offset	by	gains,	net	of	hedges,	related	to	FVA/DVA.	The	prior	year	was	a	loss	of $2.1	billion	(including	the	FVA	implementation	loss	of	$1.5	billion	and	DVA losses	of	$452	million).

Noninterest	expense	was	$23.3	billion,	up	7%	compared	with	the	prior	year	as	a result	of	higher	legal	expense	and	investment	in	controls.	This	was	partially offset	by	lower	performance-based	compensation	expense	as	well	as	the	impact of	business	simplification.

| (in	millions,	except	headcount) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\t(period-\nend) |  |  |  |
| Assets | $748,691 | $861,466 | $843,248 |
| Loans: |  |  |  |
| Loans\tretained(a) | 106,908 | 96,409 | 95,627 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\nvalue | 3,698 | 5,567 | 11,913 |
| Total\tloans | 110,606 | 101,976 | 107,540 |
| Core\tLoans | 110,084 | 100,772 | 101,376 |
| Equity | 62,000 | 61,000 | 56,500 |
| Selected\tbalance\tsheet\tdata\t(average) |  |  |  |
| Assets | $824,208 | $854,712 | $859,071 |
| Trading\tassets-debt\tand\tequity\ninstruments | 302,514 | 317,535 | 321,585 |
| Trading\tassets-derivative\treceivables | 67,263 | 64,833 | 70,353 |
| Loans: |  |  |  |
| Loans\tretained(a) | 98,331 | 95,764 | 104,864 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\nvalue | 4,572 | 7,599 | 5,158 |
| Total\tloans | 102,903 | 103,363 | 110,022 |
| Core\tLoans | 99,231 | 102,604 | 108,199 |
| Equity | 62,000 | 61,000 | 56,500 |
| Headcount(b) | 49,067 | 50,965 | 52,082 |

(a) Loans	retained	includes	credit	portfolio	loans,	loans	held	by	consolidated	Firm-administered	multi-

seller	conduits,	trade	finance	loans,	other	held-for-investment	loans	and	overdrafts.

(b) Effective	in	2015,	certain	technology	staff	were	transferred	from	CIB	to	CB;	previously-reported headcount	has	been	revised	to	conform	with	the	current	period	presentation.	As	the	related	expense for	these	staff	is	not	material,	prior	period	expenses	have	not	been	revised.	Prior	to	2015, compensation	expense	related	to	this	headcount	was	recorded	in	the	CIB,	with	an	allocation	to	CB (reported	in	noncompensation	expense);	commencing	with	2015,	such	expense	is	recorded	as compensation	expense	in	CB	and	accordingly	total	noninterest	expense	related	to	this	headcount	in both	CB	and	CIB	remains	unchanged.

| (in	millions,	except	ratios) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Credit\tdata\tand\tquality\nstatistics |  |  |  |
| Net\tcharge-offs/(recoveries) | $(19) | $(12) | $(78) |
| Nonperforming\tassets: |  |  |  |
| Nonaccrual\tloans: |  |  |  |
| Nonaccrual\tloans\tretained(a) | 428 | 110 | 163 |
| Nonaccrual\tloans\theld-for-\nsale\tand\tloans\tat\tfair\tvalue | 10 | 11 | 180 |
| Total\tnonaccrual\tloans | 438 | 121 | 343 |
| Derivative\treceivables | 204 | 275 | 415 |
| Assets\tacquired\tin\tloan\nsatisfactions | 62 | 67 | 80 |
| Total\tnonperforming\tassets | 704 | 463 | 838 |
| Allowance\tfor\tcredit\tlosses: |  |  |  |
| Allowance\tfor\tloan\tlosses | 1,258 | 1,034 | 1,096 |
| Allowance\tfor\tlending-\nrelated\tcommitments | 569 | 439 | 525 |
| Total\tallowance\tfor\tcredit\nlosses | 1,827 | 1,473 | 1,621 |
| Net\tcharge-off/(recovery)\trate | (0.02)% | (0.01)% | 0.07% |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| period-end\tloans |  |  |  |
| retained | 1.18 | 1.07 | 1.15 |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| period-end\tloans\tretained, |  |  |  |
| excluding\ttrade\tfinance\tand |  |  |  |
| conduits(b) | 1.88 | 1.82 | 2.02 |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| nonaccrual\tloans |  |  |  |
| retained(a) | 294 | 940 | 672 |
| Nonaccrual\tloans\tto\ttotal\tperiod-\nend\tloans | 0.40 | 0.12 | 0.32 |

(a) Allowance	for	loan	losses	of	$177	million,	$18	million	and	$51	million	were	held	against	these nonaccrual	loans	at	December	31,	2015,	2014	and	2013,	respectively.

(b) Management	uses	allowance	for	loan	losses	to	period-end	loans	retained,	excluding	trade	finance	and conduits,	a	non-GAAP	financial	measure,	to	provide	a	more	meaningful	assessment	of	CIB's allowance	coverage	ratio.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Advisory | $2,133 | $1,627 | $1,315 |
| Equity\tunderwriting | 1,434 | 1,571 | 1,499 |
| Debt\tunderwriting | 3,169 | 3,372 | 3,517 |
| Total\tinvestment\tbanking\tfees | $6,736 | $6,570 | $6,331 |

# League	table	results	–	wallet	share

# League	table	results	–	volumes

	(a)	Source:	Dealogic.	Reflects	the	ranking	of	revenue	wallet	and	market	share.

	(b)	Long-term	debt	rankings	include	investment-grade,	high-yield,	supranationals,	sovereigns,	agencies,	covered	bonds,	asset-backed	securities	("ABS")	and	MBS;	and	exclude

								money	market,	short-term	debt,	and	U.S.	municipal	securities.

	(c)	Global	equity	and	equity-related	rankings	include	rights	offerings	and	Chinese	A-Shares.

	(d)	M&A	and	Announced	M&A	rankings	reflect	the	removal	of	any	withdrawn	transactions.	U.S.	M&A	revenue	wallet	represents	wallet	from	client	parents	based	in	the	U.S.	U.S.

								announced	M&A	volumes	represents	any	U.S.	involvement	ranking.

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

	(f)	Source:	Dealogic.	Reflects	transaction	volume	and	market	share.	Global	announced	M&A	is	based	on	transaction	value	at	announcement;	because	of	joint	M&A

								assignments,	M&A	market	share	of	all	participants	will	add	up	to	more	than	100%.	All	other	transaction	volume-based	rankings	are	based	on	proceeds,	with	full	credit	to 								each	book	manager/equal	if	joint.

| (in	millions,	except	where	otherwise	noted) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Market\trisk-related\trevenue\t–\ttrading\tloss\tdays(a) | 9 | 9 | 0 |
| Assets\tunder\tcustody\t("AUC")\tby\tasset\tclass\t(period-end)\tin\tbillions: |  |  |  |
| Fixed\tIncome | $12,042 | $12,328 | $11,903 |
| Equity | 6,194 | 6,524 | 6,913 |
| Other(b) | 1,707 | 1,697 | 1,669 |
| Total\tAUC | $19,943 | $20,549 | $20,485 |
| (c)\nClient\tdeposits\tand\tother\tthird\tparty\tliabilities\t(average) | $395,297 | $417,369 | $383,667 |
| Trade\tfinance\tloans\t(period-end) | 19,255 | 25,713 | 30,752 |

(a) Market	risk-related	revenue	is	defined	as	the	change	in	value	of:	principal	transactions	revenue;	trading-related	net	interest	income;	brokerage	commissions,	underwriting	fees	or	other	revenue;	and	revenue	from syndicated	lending	facilities	that	the	Firm	intends	to	distribute;	gains	and	losses	from	DVA	and	FVA	are	excluded.	Market	risk-related	revenue–trading	loss	days	represent	the	number	of	days	for	which	the	CIB posted	losses	under	this	measure.	The	loss	days	determined	under	this	measure	differ	from	the	loss	days	that	are	determined	based	on	the	disclosure	of	market	risk-related	gains	and	losses	for	the	Firm	in	the	value-at- risk	("VaR")	back-testing	discussion	on	pages	135–137.

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

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

# International	metrics

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Total\tnet\trevenue(a) |  |  |  |
| Europe/Middle\tEast/Africa | $10,894 | $11,598 | $10,689 |
| Asia/Pacific | 4,901 | 4,698 | 4,736 |
| Latin\tAmerica/Caribbean | 1,096 | 1,179 | 1,340 |
| Total\tinternational\tnet\trevenue | 16,891 | 17,475 | 16,765 |
| North\tAmerica | 16,651 | 17,120 | 17,947 |
| Total\tnet\trevenue | $33,542 | $34,595 | $34,712 |
| Loans\t(period-end)(a) |  |  |  |
| Europe/Middle\tEast/Africa | $24,622 | $27,155 | $29,392 |
| Asia/Pacific | 17,108 | 19,992 | 22,151 |
| Latin\tAmerica/Caribbean | 8,609 | 8,950 | 8,362 |
| Total\tinternational\tloans | 50,339 | 56,097 | 59,905 |
| North\tAmerica | 56,569 | 40,312 | 35,722 |
| Total\tloans | $106,908 | $96,409 | $95,627 |
| Client\tdeposits\tand\tother\tthird-party\nliabilities\t(average)(a) |  |  |  |
| Europe/Middle\tEast/Africa | $141,062 | $152,712 | $143,807 |
| Asia/Pacific | 67,111 | 66,933 | 54,428 |
| Latin\tAmerica/Caribbean | 23,070 | 22,360 | 15,301 |
| Total\tinternational | $231,243 | $242,005 | $213,536 |
| North\tAmerica | 164,054 | 175,364 | 170,131 |
| Total\tclient\tdeposits\tand\tother\tthird-\nparty\tliabilities | $395,297 | $417,369 | $383,667 |
| AUC\t(period-end)\t(in\tbillions)(a) |  |  |  |
| North\tAmerica | $12,034 | $11,987 | $11,299 |
| All\tother\tregions | 7,909 | 8,562 | 9,186 |
| Total\tAUC | $19,943 | $20,549 | $20,485 |

(a) Total	net	revenue	is	based	predominantly	on	the	domicile	of	the	client	or	location	of	the	trading desk,	as	applicable.	Loans	outstanding	(excluding	loans	held-for-sale	and	loans	at	fair	value),	client deposits	and	other	third-party	liabilities,	and	AUC	are	based	predominantly	on	the	domicile	of	the client.

# COMMERCIAL	BANKING

# Commercial	Banking	delivers	extensive	industry	knowledge,

local	expertise	and	dedicated	service	to	U.S.	and	U.S.	multinational	clients, including	corporations,	municipalities,	financial	institutions	and	nonprofit entities	with	annual	revenue	generally	ranging	from	$20	million	to	$2 billion.	In	addition,	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.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Lending-\tand\tdeposit-related\tfees | $944 | $978 | $1,033 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 88 | 92 | 116 |
| All\tother\tincome(a) | 1,333 | 1,279 | 1,149 |
| Noninterest\trevenue | 2,365 | 2,349 | 2,298 |
| Net\tinterest\tincome | 4,520 | 4,533 | 4,794 |
| Total\tnet\trevenue(b) | 6,885 | 6,882 | 7,092 |
| Provision\tfor\tcredit\tlosses | 442 | (189) | 85 |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 1,238 | 1,203 | 1,115 |
| Noncompensation\texpense | 1,643 | 1,492 | 1,495 |
| Total\tnoninterest\texpense | 2,881 | 2,695 | 2,610 |
| Income\tbefore\tincome\ttax\texpense | 3,562 | 4,376 | 4,397 |
| Income\ttax\texpense | 1,371 | 1,741 | 1,749 |
| Net\tincome | $2,191 | $2,635 | $2,648 |

(a) Includes	revenue	from	investment	banking	products	and	commercial	card	transactions. (b) Total	net	revenue	included	tax-equivalent	adjustments	from	income	tax	credits	related	to	equity investments	in	designated	community	development	entities	that	provide	loans	to	qualified	businesses in	low-income	communities,	as	well	as	tax-exempt	income	from	municipal	bond	activities	of	$493 million,	$462	million	and	$407	million	for	the	years	ended	 December	31,	2015,	2014	and	2013, respectively.

Net	income	was	$2.2	billion,	a	decrease	of	17%	compared	with	the	prior	year, driven	by	a	higher	provision	for	credit	losses	and	higher	noninterest	expense.

Net	revenue	was	$6.9	billion,	flat	compared	with	the	prior	year.	Net	interest income	was	$4.5	billion,	flat	compared	with	the	prior	year,	with	interest	income from	higher	loan	balances	offset	by	spread	compression.	Noninterest	revenue was	$2.4	billion,	flat	compared	with	the	prior	year,	with	higher	investment banking	revenue	offset	by	lower	lending-related	fees.

Noninterest	expense	was	$2.9	billion,	an	increase	of	7%	compared	with	the	prior year,	reflecting	investment	in	controls.

The	provision	for	credit	losses	was	$442	million,	reflecting	an	increase	in	the allowance	for	credit	losses	for	Oil	&	Gas	exposure	and	other	select	downgrades. The	prior	year	was	a	benefit	of	$189	million.

Net	income	was	$2.6	billion,	flat	compared	with	the	prior	year,	reflecting	lower net	revenue	and	higher	noninterest	expense,	predominantly	offset	by	a	lower provision	for	credit	losses.

Net	revenue	was	$6.9	billion,	a	decrease	of	3%	compared	with	the	prior	year.	Net interest	income	was	$4.5	billion,	a	decrease	of	5%,	reflecting	spread compression,	the	absence	of	proceeds	received	in	the	prior	year	from	a	lending- related	workout,	and	lower	purchase	discounts	recognized	on	loan	repayments, partially	offset	by	higher	loan	balances.	Noninterest	revenue	was	$2.3	billion,	up 2%,	reflecting	higher	investment	banking	revenue,	largely	offset	by	business simplification	and	lower	lending	fees.

Noninterest	expense	was	$2.7	billion,	an	increase	of	3%	from	the	prior	year, largely	reflecting	investments	in	controls.

# CB	product	revenue	consists	of	the	following:

Lending	includes	a	variety	of	financing	alternatives,	which	are	primarily provided	on	a	secured	basis;	collateral	includes	receivables,	inventory, equipment,	real	estate	or	other	assets.	Products	include	term	loans,	revolving lines	of	credit,	bridge	financing,	asset-based	structures,	leases,	and	standby letters	of	credit.

Treasury	services	includes	revenue	from	a	broad	range	of	products	and services	that	enable	CB	clients	to	manage	payments	and	receipts,	as	well	as invest	and	manage	funds.

Investment	banking	includes	revenue	from	a	range	of	products	providing	CB clients	with	sophisticated	capital-raising	alternatives,	as	well	as	balance	sheet and	risk	management	tools	through	advisory,	equity	underwriting,	and	loan syndications.	Revenue	from	Fixed	Income	and	Equity	Markets	products	used by	CB	clients	is	also	included.	Investment	banking	revenue,	gross,	represents total	revenue	related	to	investment	banking	products	sold	to	CB	clients.

Other	product	revenue	primarily	includes	tax-equivalent	adjustments generated	from	Community	Development	Banking	activities	and	certain income	derived	from	principal	transactions.

# CB	is	divided	into	four	primary	client	segments:	Middle	Market	Banking, Corporate	Client	Banking,	Commercial	Term	Lending,	and	Real	Estate Banking.

Middle	Market	Banking	covers	corporate,	municipal	and	nonprofit	clients, with	annual	revenue	generally	ranging	between	$20	million	and	$500	million. Corporate	Client	Banking	covers	clients	with	annual	revenue	generally ranging	between	$500	million	and	$2	billion	and	focuses	on	clients	that	have broader	investment	banking	needs.

Commercial	Term	Lending	primarily	provides	term	financing	to	real	estate investors/owners	for	multifamily	properties	as	well	as	office,	retail	and industrial	properties.

Real	Estate	Banking	provides	full-service	banking	to	investors	and developers	of	institutional-grade	real	estate	investment	properties.

Other	primarily	includes	lending	and	investment-related	activities	within	the Community	Development	Banking	business.

| (in	millions,	except	ratios) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue\tby\tproduct |  |  |  |
| Lending(a) | $3,429 | $3,358 | $3,730 |
| Treasury\tservices(a) | 2,581 | 2,681 | 2,649 |
| Investment\tbanking | 730 | 684 | 575 |
| Other(a) | 145 | 159 | 138 |
| Total\tCommercial\tBanking\tnet\trevenue | $6,885 | $6,882 | $7,092 |
| Investment\tbanking\trevenue,\tgross | $2,179 | $1,986 | $1,676 |
| Revenue\tby\tclient\tsegment |  |  |  |
| Middle\tMarket\tBanking(b) | $2,742 | $2,791 | $3,015 |
| Corporate\tClient\tBanking(b) | 2,012 | 1,982 | 1,911 |
| Commercial\tTerm\tLending | 1,275 | 1,252 | 1,239 |
| Real\tEstate\tBanking | 494 | 495 | 561 |
| Other | 362 | 362 | 366 |
| Total\tCommercial\tBanking\tnet\trevenue | $6,885 | $6,882 | $7,092 |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity | 15% | 18% | 19% |
| Overhead\tratio | 42 | 39 | 37 |

(a) Effective	in	2015,	Commercial	Card	and	Chase	Commerce	Solutions	product	revenue	was transferred	from	Lending	and	Other,	respectively,	to	Treasury	Services.	Prior	period	amounts	were revised	to	conform	with	the	current	period	presentation.

(b) Effective	in	2015,	mortgage	warehouse	lending	clients	were	transferred	from	Middle	Market Banking	to	Corporate	Client	Banking.	Prior	period	revenue,	period-end	loans,	and	average	loans	by client	segment	were	revised	to	conform	with	the	current	period	presentation.

# Selected	metrics	(continued)

(a) Effective	in	2015,	mortgage	warehouse	lending	clients	were	transferred	from	Middle	Market Banking	to	Corporate	Client	Banking.	Prior	period	revenue,	period-end	loans,	and	average	loans	by client	segment	were	revised	to	conform	with	the	current	period	presentation.

(a) An	allowance	for	loan	losses	of	 $64	million,	$45	million	and	$81	million	was	held	against nonaccrual	loans	retained	at	December	31,	2015,	2014	and	2013,	respectively.

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

# ASSET	MANAGEMENT

Asset	Management,	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	many	major	markets throughout	the	world.	AM	offers	investment	management	across	most 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.

| and	headcount) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Asset\tmanagement,\tadministration\tand\ncommissions | $9,175 | $9,024 | $8,232 |
| All\tother\tincome | 388 | 564 | 797 |
| Noninterest\trevenue | 9,563 | 9,588 | 9,029 |
| Net\tinterest\tincome | 2,556 | 2,440 | 2,376 |
| Total\tnet\trevenue | 12,119 | 12,028 | 11,405 |
| Provision\tfor\tcredit\tlosses | 4 | 4 | 65 |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 5,113 | 5,082 | 4,875 |
| Noncompensation\texpense | 3,773 | 3,456 | 3,141 |
| Total\tnoninterest\texpense | 8,886 | 8,538 | 8,016 |
| Income\tbefore\tincome\ttax\texpense | 3,229 | 3,486 | 3,324 |
| Income\ttax\texpense | 1,294 | 1,333 | 1,241 |
| Net\tincome | $1,935 | $2,153 | $2,083 |
| Revenue\tby\tline\tof\tbusiness |  |  |  |
| Global\tInvestment\tManagement | $6,301 | $6,327 | $5,951 |
| Global\tWealth\tManagement | 5,818 | 5,701 | 5,454 |
| Total\tnet\trevenue | $12,119 | $12,028 | $11,405 |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity | 21% | 23% | 23% |
| Overhead\tratio | 73 | 71 | 70 |
| Pretax\tmargin\tratio: |  |  |  |
| Global\tInvestment\tManagement | 31 | 31 | 32 |
| Global\tWealth\tManagement | 22 | 27 | 26 |
| Asset\tManagement | 27 | 29 | 29 |
| Headcount | 20,975 | 19,735 | 20,048 |
| Number\tof\tclient\tadvisors | 2,778 | 2,836 | 2,962 |

Net	income	was	$1.9	billion,	a	decrease	of	10%	compared	with	the	prior	year, reflecting	higher	noninterest	expense,	partially	offset	by	higher	net	revenue.

Net	revenue	was	$12.1	billion,	an	increase	of	1%.	Net	interest	income	was	$2.6 billion,	up	5%,	driven	by	higher	loan	balances	and	spreads.	Noninterest	revenue was	$9.6	billion,	flat	from	last	year,	as	net	client	inflows	into	assets	under management	and	the	impact	of	higher	average	market	levels	were	predominantly offset	by	lower	performance	fees	and	the	sale	of	Retirement	Plan	Services ("RPS")	in	2014.

Revenue	from	Global	Investment	Management	was	$6.3	billion,	flat	from	the prior	year	as	the	sale	of	RPS	in	2014	and	lower	performance	fees	were	largely offset	by	net	client	inflows.	Revenue	from	Global	Wealth	Management	was	$5.8 billion,	up	2%	from	the	prior	year	due	to	higher	net	interest	income	from	higher loan	balances	and	spreads	and	net	client	inflows,	partially	offset	by	lower brokerage	revenue.

Noninterest	expense	was	$8.9	billion,	an	increase	of	4%,	predominantly	due	to higher	legal	expense	and	investment	in	both	infrastructure	and	controls.

Net	income	was	$2.2	billion,	an	increase	of	3%	from	the	prior	year,	reflecting higher	net	revenue	and	lower	provision	for	credit	losses,	predominantly	offset	by higher	noninterest	expense.

Net	revenue	was	$12.0	billion,	an	increase	of	5%	from	the	prior	year. Noninterest	revenue	was	$9.6	billion,	up	6%	from	the	prior	year	due	to	net	client inflows	and	the	effect	of	higher	market	levels,	partially	offset	by	lower valuations	of	seed	capital	investments.	Net	interest	income	was	$2.4	billion,	up 3%	from	the	prior	year	due	to	higher	loan	and	deposit	balances,	largely	offset	by spread	compression.

Revenue	from	Global	Investment	Management	was	$6.3	billion,	up	6%	due	to net	client	inflows	and	the	effect	of	higher	market	levels,	partially	offset	by	lower valuations	of	seed	capital	investments.	Revenue	from	Global	Wealth Management	was	$5.7	billion,	up	5%	from	the	prior	year	due	to	higher	net interest	income	from	loan	and	deposit	balances	and	net	client	inflows,	partially offset	by	spread	compression	and	lower	brokerage	revenue.

Noninterest	expense	was	$8.5	billion,	an	increase	of	7%	from	the	prior	year	as the	business	continues	to	invest	in	both	infrastructure	and	controls.

# AM's	lines	of	business	consist	of	the	following:

Global	Investment	Management	provides	comprehensive	global	investment	services, including	asset	management,	pension	analytics,	asset-liability	management	and	active	risk-   budgeting	strategies.

  Global	Wealth	Management	offers	investment	advice	and	wealth	management,	including   investment	management,	capital	markets	and	risk	management,	tax	and	estate	planning,   banking,	lending	and	specialty-wealth	advisory	services.

# AM's	client	segments	consist	of	the	following:

  Private	Banking	clients	include	high-	and	ultra-high-net-worth	individuals,	families,	money   managers,	business	owners	and	small	corporations	worldwide.

  Institutional	clients	include	both	corporate	and	public	institutions,	endowments,   foundations,	nonprofit	organizations	and	governments	worldwide.   Retail	clients	include	financial	intermediaries	and	individual	investors.

# J.P.	Morgan	Asset	Management	has	two	high-level	measures	of	its	overall  fund	performance.

#   •	Percentage	of	mutual	fund	assets	under	management	in	funds	rated	4-	or	5-

   star:	Mutual	fund	rating	services	rank	funds	based	on	their	risk-adjusted	performance	over various	periods.	A	5-star	rating	is	the	best	rating	and	represents	the	top	10%	of	industry- wide	ranked	funds.	A	4-star	rating	represents	the	next	22.5%	of	industry-wide	ranked	funds. A	3-star	rating	represents	the	next	35%	of	industry-wide	ranked	funds.	A	2-star	rating represents	the	next	22.5%	of	industry-wide	ranked	funds.	A	1-star	rating	is	the	worst	rating and	represents	the	bottom	10%	of	industry-wide	ranked	funds.	The	"overall	Morningstar    rating"	is	derived	from	a	weighted	average	of	the	performance	associated	with	a	fund's three-,	five-	and	ten-year	(if	applicable)	Morningstar	Rating	metrics.	For	U.S.	domiciled funds,	separate	star	ratings	are	given	at	the	individual	share	class	level.	The	Nomura	"star rating"	is	based	on	three-year	risk-adjusted	performance	only.	Funds	with	fewer	than	three years	of	history	are	not	rated	and	hence	excluded	from	this	analysis.	All	ratings,	the    assigned	peer	categories	and	the	asset	values	used	to	derive	this	analysis	are	sourced	from these	fund	rating	providers	mentioned	in	footnote	(a).	The	data	providers	re-denominate	the asset	values	into	U.S.	dollars.	This	%	of	AUM	is	based	on	star	ratings	at	the	share	class level	for	U.S.	domiciled	funds,	and	at	a	"primary	share	class"	level	to	represent	the	star rating	of	all	other	funds	except	for	Japan	where	Nomura	provides	ratings	at	the	fund	level.    The	"primary	share	class",	as	defined	by	Morningstar,	denotes	the	share	class    recommended	as	being	the	best	proxy	for	the	portfolio	and	in	most	cases	will	be	the	most    retail	version	(based	upon	annual	management	charge,	minimum	investment,	currency	and other	factors).	The	performance	data	could	have	been	different	if	all	funds/accounts	would have	been	included.	Past	performance	is	not	indicative	of	future	results.

  •	Percentage	of	mutual	fund	assets	under	management	in	funds	ranked	in	the	1st	or	2nd    quartile	(one,	three	and	five	years):	All	quartile	rankings,	the	assigned	peer	categories	and    the	asset	values	used	to	derive	this	analysis	are	sourced	from	the	fund	ranking	providers mentioned	in	footnote	(b).	Quartile	rankings	are	done	on	the	net-of-fee	absolute	return	of each	fund.	The	data	providers	re-denominate	the	asset	values	into	U.S.	dollars.	This	%	of    AUM	is	based	on	fund	performance	and	associated	peer	rankings	at	the	share	class	level for	U.S.	domiciled	funds,	at	a	"primary	share	class"	level	to	represent	the	quartile	ranking of	the	U.K.,	Luxembourg	and	Hong	Kong	funds	and	at	the	fund	level	for	all	other	funds.    The	"primary	share	class",	as	defined	by	Morningstar,	denotes	the	share	class	recommended    as	being	the	best	proxy	for	the	portfolio	and	in	most	cases	will	be	the	most	retail	version (based	upon	annual	management	charge,	minimum	investment,	currency	and	other	factors).    Where	peer	group	rankings	given	for	a	fund	are	in	more	than	one	"primary	share	class" territory	both	rankings	are	included	to	reflect	local	market	competitiveness	(applies	to "Offshore	Territories"	and	"HK	SFC	Authorized"	funds	only).	The	performance	data	could have	been	different	if	all	funds/accounts	would	have	been	included.	Past	performance	is	not indicative	of	future	results.

(a) Represents	the	"overall	star	rating"	derived	from	Morningstar	for	the	U.S.,	the	U.K.,	Luxembourg, Hong	Kong	and	Taiwan	domiciled	funds;	and	Nomura	"star	rating"	for	Japan	domiciled	funds. Includes	only	Global	Investment	Management	retail	open-ended	mutual	funds	that	have	a	rating. Excludes	money	market	funds,	Undiscovered	Managers	Fund,	and	Brazil	and	India	domiciled	funds.

(b) Quartile	ranking	sourced	from:	Lipper	for	the	U.S.	and	Taiwan	domiciled	funds;	Morningstar	for	the U.K.,	Luxembourg	and	Hong	Kong	domiciled	funds;	Nomura	for	Japan	domiciled	funds	and FundDoctor	for	South	Korea	domiciled	funds.	Includes	only	Global	Investment	Management	retail open-ended	mutual	funds	that	are	ranked	by	the	aforementioned	sources.	Excludes	money	market funds,	Undiscovered	Managers	Fund,	and	Brazil	and	India	domiciled	funds.

(c) Included	$26.6	billion,	$22.1	billion	and	$18.9	billion	of	prime	mortgage	loans	reported	in	the Consumer,	excluding	credit	card,	loan	portfolio	at	December	31,	2015,	2014	and	2013,	respectively.

# Client	assets

Client	assets	were	$2.4	trillion,	a	decrease	of	2%	compared	with	the	prior	year. Assets	under	management	were	$1.7	trillion,	a	decrease	of	1%	from	the	prior year	due	to	the	effect	of	lower	market	levels	partially	offset	by	net	inflows	to long-term	products.

Client	assets	were	$2.4	trillion,	an	increase	of	2%	compared	with	the	prior	year. Excluding	the	sale	of	Retirement	Plan	Services,	client	assets	were	up	8% compared	with	the	prior	year.	Assets	under	management	were	$1.7	trillion,	an increase	of	9%	from	the	prior	year	due	to	net	inflows	to	long-term	products	and the	effect	of	higher	market	levels.

| (in	billions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Assets\tby\tasset\tclass |  |  |  |
| Liquidity | $464 | $461 | $451 |
| Fixed\tincome | 342 | 359 | 330 |
| Equity | 353 | 375 | 370 |
| Multi-asset\tand\talternatives | 564 | 549 | 447 |
| Total\tassets\tunder\tmanagement | 1,723 | 1,744 | 1,598 |
| Custody/brokerage/\nadministration/deposits | 627 | 643 | 745 |
| Total\tclient\tassets | $2,350 | $2,387 | $2,343 |
| Memo: |  |  |  |
| Alternatives\tclient\tassets(a) | 172 | 166 | 158 |
| Assets\tby\tclient\tsegment |  |  |  |
| Private\tBanking | $437 | $428 | $361 |
| Institutional | 816 | 827 | 777 |
| Retail | 470 | 489 | 460 |
| Total\tassets\tunder\tmanagement | $1,723 | $1,744 | $1,598 |
| Private\tBanking | $1,050 | $1,057 | $977 |
| Institutional | 824 | 835 | 777 |
| Retail | 476 | 495 | 589 |
| Total\tclient\tassets | $2,350 | $2,387 | $2,343 |

(a) Represents	assets	under	management,	as	well	as	client	balances	in	brokerage	accounts.

# Client	assets	(continued)

| (in	billions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Assets\tunder\tmanagement\trollforward |  |  |  |
| Beginning\tbalance | $1,744 | $1,598 | $1,426 |
| Net\tasset\tflows: |  |  |  |
| Liquidity | (1) | 18 | (4) |
| Fixed\tincome | (7) | 33 | 8 |
| Equity | 1 | 5 | 34 |
| Multi-asset\tand\talternatives | 22 | 42 | 48 |
| Market/performance/other\timpacts | (36) | 48 | 86 |
| Ending\tbalance,\tDecember\t31 | $1,723 | $1,744 | $1,598 |
| Client\tassets\trollforward |  |  |  |
| Beginning\tbalance | $2,387 | $2,343 | $2,095 |
| Net\tasset\tflows | 27 | 118 | 80 |
| Market/performance/other\timpacts | (64) | (74) | 168 |
| Ending\tbalance,\tDecember\t31 | $2,350 | $2,387 | $2,343 |

| (in	billions,	except	where	otherwise	noted) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Total\tnet\trevenue\t(in\tmillions)(a) |  |  |  |
| Europe/Middle\tEast/Africa | $1,946 | $2,080 | $1,881 |
| Asia/Pacific | 1,130 | 1,199 | 1,133 |
| Latin\tAmerica/Caribbean | 795 | 841 | 879 |
| Total\tinternational\tnet\trevenue | 3,871 | 4,120 | 3,893 |
| North\tAmerica | 8,248 | 7,908 | 7,512 |
| Total\tnet\trevenue | $12,119 | $12,028 | $11,405 |
| Assets\tunder\tmanagement |  |  |  |
| Europe/Middle\tEast/Africa | $302 | $329 | $305 |
| Asia/Pacific | 123 | 126 | 132 |
| Latin\tAmerica/Caribbean | 45 | 46 | 47 |
| Total\tinternational\tassets\tunder\nmanagement | 470 | 501 | 484 |
| North\tAmerica | 1,253 | 1,243 | 1,114 |
| Total\tassets\tunder\tmanagement | $1,723 | $1,744 | $1,598 |
| Client\tassets |  |  |  |
| Europe/Middle\tEast/Africa | $351 | $391 | $367 |
| Asia/Pacific | 173 | 174 | 180 |
| Latin\tAmerica/Caribbean | 110 | 115 | 117 |
| Total\tinternational\tclient\tassets | 634 | 680 | 664 |
| North\tAmerica | 1,716 | 1,707 | 1,679 |
| Total\tclient\tassets | $2,350 | $2,387 | $2,343 |

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

# CORPORATE

The	Corporate	segment	consists	of	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	expenses	that	are	subject	to allocation	to	the	businesses.

| (in	millions,	except	headcount) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Principal\ttransactions | $41 | $1,197 | $563 |
| Securities\tgains | 190 | 71 | 666 |
| All\tother\tincome | 569 | 704 | 1,864 |
| Noninterest\trevenue | 800 | 1,972 | 3,093 |
| Net\tinterest\tincome(a) | (533) | (1,960) | (3,115) |
| Total\tnet\trevenue | 267 | 12 | (22) |
| Provision\tfor\tcredit\tlosses | (10) | (35) | (28) |
| Noninterest\texpense(b) | 977 | 1,159 | 10,255 |
| Loss\tbefore\tincome\ttax\tbenefit | (700) | (1,112) | (10,249) |
| Income\ttax\tbenefit | (3,137) | (1,976) | (3,493) |
| Net\tincome/(loss) | $2,437 | $864 | $(6,756) |
| Total\tnet\trevenue |  |  |  |
| Treasury\tand\tCIO | (493) | (1,317) | (2,068) |
| Other\tCorporate\t(c) | 760 | 1,329 | 2,046 |
| Total\tnet\trevenue | $267 | $12 | $(22) |
| Net\tincome/(loss) |  |  |  |
| Treasury\tand\tCIO | (235) | (1,165) | (1,454) |
| Other\tCorporate\t(c) | 2,672 | 2,029 | (5,302) |
| Total\tnet\tincome/(loss) | $2,437 | $864 | $(6,756) |
| Selected\tbalance\tsheet\tdata\n(period-end) |  |  |  |
| Total\tassets\t(period-end) | $768,204 | $931,206 | $805,506 |
| Loans | 2,187 | 2,871 | 4,004 |
| Core\tloans(d) | 2,182 | 2,848 | 3,958 |
| Headcount | 29,617 | 26,047 | 20,717 |

(a) Included	tax-equivalent	adjustments,	predominantly	due	to	tax-exempt	income	from	municipal	bond investments	of	$839	million,	$730	million	and	$480	million	for	the	years	ended	 December	31,	2015, 2014	and	2013,	respectively.

(c) Effective	in	2015,	the	Firm	began	including	the	results	of	Private	Equity	in	the	Other	Corporate	line within	the	Corporate	segment.	Prior	period	amounts	have	been	revised	to	conform	with	the	current period	presentation.	The	Corporate	segment's	balance	sheets	and	results	of	operations	were	not impacted	by	this	reporting	change.

(d) Average	core	loans	were	$2.5	billion,	$3.3	billion	and	$5.2	billion	for	the	years	ended	December	31,

Net	income	was	$2.4	billion,	compared	with	net	income	of	$864	million	in	the prior	year.

Net	revenue	was	$267	million,	compared	with	$12	million	in	the	prior	year.	The current	year	included	a	$514	million	benefit	from	a	legal	settlement.	Treasury and	CIO	included	a	benefit	of	approximately	$178	million	associated	with recognizing	the	unamortized	discount	on	certain	debt	securities	which	were called	at	par	and	a	$173	million	pretax	loss	primarily	related	to	accelerated amortization	of	cash	flow	hedges	associated	with	the	exit	of	certain	non- operating	deposits.	Private	Equity	gains	were	$1.2	billion	lower	compared	with the	prior	year,	reflecting	lower	valuation	gains	and	lower	net	gains	on	sales	as the	Firm	exits	this	non-core	business.

Noninterest	expense	was	$977	million,	a	decrease	of	$182	million	from	the	prior year	which	had	included	a	$276	million	goodwill	impairment	related	to	the	sale of	a	portion	of	the	Private	Equity	business.

The	current	year	reflected	tax	benefits	of	$2.6	billion	predominantly	from	the resolution	of	various	tax	audits	compared	with	tax	benefits	of	$1.1	billion	in	the prior	year.

Net	income	was	$864	million,	compared	to	a	net	loss	of	$6.8	billion	in	the	prior year.

Net	revenue	was	$12	million	compared	to	a	net	loss	of	$22	million	in	the	prior year.	Current	year	net	interest	income	was	a	loss	of	$2	billion	compared	to	a	loss of	$3.1	billion	in	the	prior	year,	primarily	reflecting	higher	yields	on	investment securities.	Securities	gains	were	$71	million,	compared	with	$659	million	in	the prior	year,	reflecting	lower	repositioning	activity	of	the	investment	securities portfolio	in	the	current	period.

Private	Equity	gains	were	$540	million	higher	compared	with	the	prior	year reflecting	higher	net	gains	on	sales.	Prior	year	net	revenue	also	included	gains	of $1.3	billion	and	$493	million	on	the	sales	of	Visa	shares	and	One	Chase Manhattan	Plaza,	respectively.

Noninterest	expense	was	$1.2	billion,	a	decrease	of	$9.1	billion	due	to	a	decrease in	reserves	for	litigation	and	regulatory	proceedings	in	the	prior	year	partially offset	by	the	impact	of	a	$276	million	goodwill	impairment	related	to	the	sale	of a	portion	of	the	Private	Equity	business.

# Treasury	and	CIO	overview

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 risks	managed	by	Treasury	and	CIO	arise	from	the	activities	undertaken	by	the Firm's	four	major	reportable	business	segments	to	serve	their	respective	client bases,	which	generate	both	on-	and	off-balance	sheet	assets	and	liabilities.

Treasury	and	CIO	achieve	the	Firm's	asset-liability	management	objectives generally	by	investing	in	high-quality	securities	that	are	managed	for	the	longer- term	as	part	of	the	Firm's	investment	securities	portfolio.	Treasury	and	CIO	also use	derivatives	to	meet	the	Firm's	asset-liability	management	objectives.	For further	information	on	derivatives,	see	Note	6.	The	investment	securities portfolio	primarily	consists	of	U.S.	and	non-U.S.	government	securities,	agency and	nonagency	mortgage-backed	securities,	other	asset-backed	securities, corporate	debt	securities	and	obligations	of	U.S.	states	and	municipalities.	At December	31,	2015,	the	investment	securities	portfolio	was	$287.8	billion,	and the	average	credit	rating	of	the	securities	comprising	the	portfolio	was	AA+ (based	upon	external	ratings	where	available	and	where	not	available,	based primarily	upon	internal	ratings	that	correspond	to	ratings	as	defined	by	S&P	and Moody's).	See	Note	12	for	further	information	on	the	details	of	the	Firm's investment	securities	portfolio.

For	further	information	on	liquidity	and	funding	risk,	see	Liquidity	Risk Management	on	pages	159–164.	For	information	on	interest	rate,	foreign exchange	and	other	risks,	Treasury	and	CIO	VaR	and	the	Firm's	earnings-at- risk,	see	Market	Risk	Management	on	pages	133–139.

# Selected	income	statement	and	balance	sheet	data

| 31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Securities\tgains | $190 | $71 | $659 |
| Investment\tsecurities\tportfolio\n(average)\t(a) | 314,802 | 349,285 | 353,712 |
| Investment\tsecurities\tportfolio\t(period–\nend)(b) | 287,777 | 343,146 | 347,562 |
| Mortgage\tloans\t(average) | 2,501 | 3,308 | 5,145 |
| Mortgage\tloans\t(period-end) | 2,136 | 2,834 | 3,779 |

(a) Average	investment	securities	included	held-to-maturity	balances	of	$50.0	billion	and	$47.2	billion for	the	years	ended	December	31,	2015	and	2014	respectively.	The	held-to-maturity	balance	for	full year	2013	was	not	material.

(b) Period-end	investment	securities	included	held-to-maturity	securities	of	 $49.1	billion,	$49.3	billion,

# Private	equity	portfolio	information(a)

| December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Carrying\tvalue | $2,103 | $5,866 | $7,868 |
| Cost | 3,798 | 6,281 | 8,491 |

(a) For	more	information	on	the	Firm's	methodologies	regarding	the	valuation	of	the	Private	Equity portfolio,	see	Note	3.	For	information	on	the	sale	of	a	portion	of	the	Private	Equity	business completed	on	January	9,	2015,	see	Note	2.

The	carrying	value	of	the	private	equity	portfolio	at	December	31,	2015	was	$2.1 billion,	down	from	$5.9	billion	at	December	31,	2014,	driven	by	the	sale	of	a portion	of	the	Private	Equity	business.

The	carrying	value	of	the	private	equity	portfolio	at	December	31,	2014	was	$5.9 billion,	down	from	$7.9	billion	at	December	31,	2013.	The	decrease	in	the portfolio	was	predominantly	driven	by	sales	of	investments,	partially	offset	by unrealized	gains.

# ENTERPRISE-WIDE	RISK	MANAGEMENT

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

Firmwide	Risk	Management	is	overseen	and	managed	on	an	enterprise-wide basis.	The	Firm's	approach	to	risk	management	covers	a	broad	spectrum	of	risk areas,	such	as	credit,	market,	liquidity,	model,	structural	interest	rate,	principal, country,	operational,	compliance,	legal,	capital	and	reputation	risk,	with	controls and	governance	established	for	each	area,	as	appropriate.

The	Firm	believes	that	effective	risk	management	requires:

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

•Ownership	of	risk	management	within	each	of	the	lines	of	business	and corporate	functions;	and

•Firmwide	structures	for	risk governance.

The	Firm's	Operating	Committee,	which	consists	of	the	Firm's	Chief	Executive Officer	("CEO"),	Chief	Risk	Officer	("CRO")	and	other	senior	executives,	is responsible	for	developing	and	executing	the	Firm's	risk	management framework.	The	framework	is	intended	to	provide	controls	and	ongoing management	of	key	risks	inherent	in	the	Firm's	business	activities	and	create	a culture	of	transparency,	awareness	and	personal	responsibility	through	reporting, collaboration,	discussion,	escalation	and	sharing	of	information.	The	Operating Committee	is	responsible	and	accountable	to	the	Firm's	Board	of	Directors.

The	Firm	strives	for	continual	improvement	through	ongoing	employee	training and	development,	as	well	as	talent	retention.	The	Firm	follows	a	disciplined	and balanced	compensation	framework	with	strong	internal	governance	and independent	Board	oversight.	The	impact	of	risk	and	control	issues	are	carefully considered	in	the	Firm's	performance	evaluation	and	incentive	compensation processes.	The	Firm	is	also	engaged	in	a	number	of	activities	focused	on	conduct risk	and	in	regularly	evaluating	its	culture	with	respect	to	its	business	principles.

The	following	sections	outline	the	key	risks	that	are	inherent	in	the	Firm's	business	activities.

| Risk | Definition | Select	risk	management	metrics | Page<br>references |
| :--- | :--- | :--- | :--- |
| Capital\trisk | The\trisk\tthe\tFirm\thas\tan\tinsufficient\tlevel\tand\tcomposition\tof\tcapital\tto\tsupport\tthe\tFirm's\tbusiness\tactivities\tand | Risk-based\tcapital\tratios;\tsupplementary\tleverage\tratio;\tstress | 149–158 |
|  | associated\trisks\tduring\tnormal\teconomic\tenvironments\tand\tstressed\tconditions. |  |  |
| Compliance\trisk |  | Various\tmetrics\trelated\tto\tmarket\tconduct,\tBank\tSecrecy\tAct/Anti- | 147 |
|  |  | Money\tLaundering\t("BSA/AML"),\temployee\tcompliance,\tfiduciary, |  |
|  |  | privacy\tand\tinformation\trisk |  |
| Country\trisk | The\trisk\tthat\ta\tsovereign\tevent\tor\taction\talters\tthe\tvalue\tor\tterms\tof\tcontractual\tobligations\tof\tobligors, | Default\texposure\tat\t0%\trecovery;\tstress;\trisk\tratings;\tratings\tbased | 140–141 |
|  |  | capital\tlimits |  |
| Credit\trisk |  | Total\texposure;\tindustry,\tgeographic\tand\tcustomer\tconcentrations; | 112–132 |
|  |  | risk\tratings;\tdelinquencies;\tloss\texperience;\tstress |  |
| Legal\trisk | The\trisk\tof\tloss\tor\timposition\tof\tdamages,\tfines,\tpenalties\tor\tother\tliability\tarising\tfrom\tfailure\tto\tcomply\twith\ta | Not\tapplicable | 146 |
| Liquidity\trisk | The\trisk\tthat\tthe\tFirm\twill\tbe\tunable\tto\tmeet\tits\tcontractual\tand\tcontingent\tobligations\tor\tthat\tit\tdoes\tnot\thave\tthe | LCR;\tstress | 159–164 |
| Market\trisk | The\trisk\tof\tloss\tarising\tfrom\tpotential\tadverse\tchanges\tin\tthe\tvalue\tof\tthe\tFirm's\tassets\tand\tliabilities\tresulting | VaR,\tstress,\tsensitivities | 133–139 |
|  | from\tchanges\tin\tmarket\tvariables\tsuch\tas\tinterest\trates,\tforeign\texchange\trates,\tequity\tprices,\tcommodity\tprices, |  |  |
|  | implied\tvolatilities\tor\tcredit\tspreads. |  |  |
| Model\trisk | The\trisk\tof\tthe\tpotential\tfor\tadverse\tconsequences\tfrom\tdecisions\tbased\ton\tincorrect\tor\tmisused\tmodel\toutputs | Model\tstatus,\tmodel\ttier | 142 |
|  | and\treports. |  |  |
| Non-U.S.\tdollar |  | \tFX\tnet\topen\tposition\t("NOP") | 139 |
| foreign |  |  |  |
| exchange |  |  |  |
| ("FX")\trisk |  |  |  |
| Operational\trisk | The\trisk\tof\tloss\tresulting\tfrom\tinadequate\tor\tfailed\tprocesses\tor\tsystems,\thuman\tfactors,\tor\tdue\tto\texternal\tevents Firm-specific\tloss\texperience;\tindustry\tloss\texperience;\tbusiness | The\trisk\tof\tloss\tresulting\tfrom\tinadequate\tor\tfailed\tprocesses\tor\tsystems,\thuman\tfactors,\tor\tdue\tto\texternal\tevents Firm-specific\tloss\texperience;\tindustry\tloss\texperience;\tbusiness | 144–146 |
|  | that\tare\tneither\tmarket\tnor\tcredit-related. | environment\tand\tinternal\tcontrol\tfactors\t("BEICF");\tkey\trisk |  |
|  |  | indicators;\tkey\tcontrol\tindicators;\toperating\tmetrics |  |
| Principal\trisk | The\trisk\tof\tan\tadverse\tchange\tin\tthe\tvalue\tof\tprivately-held\tfinancial\tassets\tand\tinstruments,\ttypically | Carrying\tvalue,\tstress | 143 |
|  | representing\tan\townership\tor\tjunior\tcapital\tposition\tthat\thave\tunique\trisks\tdue\tto\ttheir\tilliquidity\tor\tfor\twhich |  |  |
|  | there\tis\tless\tobservable\tmarket\tor\tvaluation\tdata. |  |  |
| Reputation\trisk | The\trisk\tthat\tan\taction,\ttransaction,\tinvestment\tor\tevent\twill\treduce\ttrust\tin\tthe\tFirm's\tintegrity\tor\tcompetence\tby | Not\tapplicable | 148 |
|  | our\tvarious\tconstituents,\tincluding\tclients,\tcounterparties,\tinvestors,\tregulators,\temployees\tand\tthe\tbroader |  |  |
|  | public. |  |  |
| Structural | The\trisk\tresulting\tfrom\tthe\tFirm's\ttraditional\tbanking\tactivities\t(both\ton-\tand\toff-balance\tsheet\tpositions)\tarising | Earnings-at-risk | 138-139 |

# Risk	appetite	and	governance

The	Firm's	overall	tolerance	for	risk	is	governed	by	a	"Risk	Appetite" framework	for	measuring	and	monitoring	risk.	The	framework	measures	the Firm's	capacity	to	take	risk	against	stated	quantitative	tolerances	and	qualitative factors	at	each	of	the	line	of	business	("LOB")	levels,	as	well	as	at	the	Firmwide level.	The	framework	and	tolerances	are	set	and	approved	by	the	Firm's	CEO, Chief	Financial	Officer	("CFO"),	CRO	and	Chief	Operating	Officer	("COO"). LOB-level	Risk	Appetite	parameters	and	tolerances	are	set	by	the	respective LOB	CEO,	CFO	and	CRO	and	are	approved	by	the	Firm's	CEO,	CFO,	CRO	and COO.	Quantitative	risk	tolerances	are	expressed	in	terms	of	tolerance	levels	for stressed	net	income,	market	risk,	credit	risk,	liquidity	risk,	structural	interest	rate risk,	operational	risk	and	capital.	Risk	Appetite	results	are	reported	quarterly	to the	Risk	Policy	Committee	of	the	Board	of	Directors	("DRPC").

The	Firm's	CRO	is	responsible	for	the	overall	direction	of	the	Firm's	Risk Management	functions	and	is	head	of	the	Risk	Management	Organization, reporting	to	the	Firm's	CEO	and	DRPC.	The	Risk	Management	Organization operates	independently	from	the	revenue-generating	businesses,	which	enables	it to	provide	credible	challenge	to	the	businesses.	The	leadership	team	of	the	Risk Management	Organization	is	aligned	to	the	various	LOBs	and	corporate functions	as	well	as	across	the	Firm	for	firmwide	risk	categories	(e.g.	firmwide market	risk,	firmwide	model	risk,	firmwide	reputation	risk,	etc.)	producing	a matrix	structure	with	specific	subject	matter	expertise	to	manage	risks	both within	the	businesses	and	across	the	Firm.

The	Firm	places	key	reliance	on	each	of	the	LOBs	as	the	first	line	of	defense	in risk	governance.	The	LOBs	are	accountable	for	identifying	and	addressing	the risks	in	their

respective	businesses	and	for	operating	within	a	sound	control	environment.

In	addition	to	the	Risk	Management	Organization,	the	Firm's	control environment	also	includes	firmwide	functions	like	Oversight	and	Control, Compliance	and	Internal	Audit.

The	Firmwide	Oversight	and	Control	Group	consists	of	dedicated	control	officers within	each	of	the	lines	of	business	and	corporate	functions,	as	well	as	a	central oversight	function.	The	group	is	charged	with	enhancing	the	Firm's	control environment	by	looking	within	and	across	the	lines	of	business	and	corporate functions	to	identify	and	remediate	control	issues.	The	group	enables	the	Firm	to detect	control	problems	more	quickly,	escalate	issues	promptly	and	engage	other stakeholders	to	understand	common	themes	and	interdependencies	among	the various	parts	of	the	Firm.

Each	line	of	business	is	accountable	for	managing	its	compliance	risk.	The Firm's	Compliance	Organization	("Compliance"),	which	is	independent	of	the lines	of

business,	works	closely	with	the	Operating	Committee	and	management	to provide	independent	review,	monitoring	and	oversight	of	business	operations with	a	focus	on	compliance	with	the	legal	and	regulatory	obligations	applicable to	the	offering	of	the	Firm's	products	and	services	to	clients	and	customers.

Internal	Audit,	a	function	independent	of	the	businesses,	Compliance	and	the Risk	Management	Organization,	tests	and	evaluates	the	Firm's	risk	governance and	management,	as	well	as	its	internal	control	processes.	This	function	brings	a systematic	and	disciplined	approach	to	evaluating	and	improving	the effectiveness	of	the	Firm's	governance,	risk	management	and	internal	control processes.

# Risk	governance	structure

The	independent	status	of	the	Risk	Management	Organization	is	supported	by	a governance	structure	that	provides	for	escalation	of	risk	issues	up	to	senior management	and	the	Board	of	Directors.

The	chart	below	illustrates	the	key	senior	management	level	committees	in	the	Firm's	risk	governance	structure.	Other	committees	and	forums	are	in	place	that	are responsible	for	management	and	oversight	of	risk,	although	they	are	not	shown	in	the	chart	below.

The	Board	of	Directors	provides	oversight	of	risk	principally	through	the	DRPC,	Audit	Committee	and,	with	respect	to	compensation	and	other	management-related matters,	Compensation	&	Management	Development	Committee.	Each	committee	of	the	Board	oversees	reputation	risk	issues	within	its	scope	of	responsibility.

The	Risk	Policy	Committee	of	the	Board	oversees	the	Firm's	global	risk management	framework	and	approves	the	primary	risk-management	policies	of the	Firm.	The	Committee's	responsibilities	include	oversight	of	management's exercise	of	its	responsibility	to	assess	and	manage	risks	of	the	Firm,	as	well	as its	capital	and	liquidity	planning	and	analysis.	Breaches	in	risk	appetite tolerances,	liquidity	issues	that	may	have	a	material	adverse	impact	on	the	Firm and	other	significant	risk-related	matters	are	escalated	to	the	Committee.

The	Audit	Committee	of	the	Board	assists	the	Board	in	its	oversight	of management's	responsibilities	to	assure	that	there	is	an	effective	system	of controls	reasonably	designed	to	safeguard	the	assets	and	income	of	the	Firm, assure	the	integrity	of	the	Firm's	financial	statements	and	maintain	compliance with	the	Firm's	ethical	standards,	policies,	plans	and	procedures,	and	with	laws and	regulations.	In	addition,	the	Audit	Committee	assists	the	Board	in	its oversight	of	the	Firm's	independent	registered	public	accounting	firm's qualifications	and	independence.	The	Independent	Internal	Audit	Function	at	the Firm	is	headed	by	the	General	Auditor,	who	reports	to	the	Audit	Committee.

The	Compensation	&	Management	Development	Committee	assists	the	Board	in its	oversight	of	the	Firm's	compensation	programs	and	reviews	and	approves	the Firm's	overall	compensation	philosophy,	incentive	compensation	pools,	and compensation	practices	consistent	with	key	business	objectives	and	safety	and soundness.	The	Committee	reviews	Operating	Committee	members' performance	against	their	goals,	and	approves	their	compensation	awards.	The Committee	also	periodically	reviews	the	Firm's	diversity	programs	and management	development	and	succession	planning,	and	provides	oversight	of the	Firm's	culture	and	conduct	programs.

Among	the	Firm's	senior	management-level	committees	that	are	primarily responsible	for	key	risk-related	functions	are:

The	Firmwide	Risk	Committee	("FRC")	is	the	Firm's	highest	management-level risk	committee.	It	provides	oversight	of	the	risks	inherent	in	the	Firm's businesses.	The	Committee	is	co-chaired	by	the	Firm's	CEO	and	CRO.	Members of	the	Committee	include	the	Firm's	COO,	CFO,	Treasurer	&	Chief	Investment Officer,	and	General	Counsel,	as	well	as	LOB	CEOs	and	CROs,	and	other	senior managers	from	risk	and	control	functions.	This	Committee	serves	as	an escalation	point	for	risk	topics	and	issues	raised	by	its	members,	the	Line	of Business	Risk	Committees,	Firmwide	Control	Committee,	Firmwide	Fiduciary Risk	Governance	Committee,	Firmwide	Reputation	Risk	Governance	and regional	Risk	Committees.	The	Committee	escalates	significant	issues	to	the Board	of	Directors,	as	appropriate.

The	Firmwide	Control	Committee	("FCC")	is	a	forum	for	senior	management	to discuss	firmwide	operational	risks	including	existing	and	emerging	issues,	to monitor	operational	risk	metrics,	and	to	review	the	execution	of	the	Operational Risk	Management	Framework	("ORMF").	The	FCC	is	co-chaired	by	the	Chief Control	Officer	and	the	Firmwide	Risk	Executive	for	Operational	Risk Governance.	It	serves	as	an	escalation	point	for	the	line	of	business,	corporate functions	and	regional	Control	Committees	and	escalates	significant	issues	to	the FRC,	as	appropriate.

The	Firmwide	Fiduciary	Risk	Governance	Committee	("FFRGC")	is	a	forum	for risk	matters	related	to	the	Firm's	fiduciary	activities.	The	Committee	oversees	the firmwide	fiduciary	risk	governance	framework,	which	supports	the	consistent identification	and	escalation	of	fiduciary	risk	matters	by	the	relevant	lines	of business	or	corporate	functions	responsible	for	managing	fiduciary	activities.	The Committee	escalates	significant	issues	to	the	FRC	and	any	other	committee,	as appropriate.

The	Firmwide	Reputation	Risk	Governance	Group	seeks	to	promote	consistent management	of	reputation	risk	across	the	Firm.	Its	objectives	are	to	increase visibility	of	reputation	risk	governance;	promote	and	maintain	a	globally consistent	governance	model	for	reputation	risk	across	lines	of	business; promote	early	self-identification	of	potential	reputation	risks	to	the	Firm;	and provide	thought	leadership	on	cross-line-of-business	reputation	risk	issues.	Each line	of	business	has	a	separate	reputation	risk	governance	structure	which includes,	in	most	cases,	one	or	more	dedicated	reputation	risk	committees.

Line	of	Business	and	Regional	Risk	Committees	review	the	ways	in	which	the particular	line	of	business	or	the	business	operating	in	a	particular	region	could be	exposed	to	adverse	outcomes	with	a	focus	on	identifying,	accepting, escalating	and/or	requiring	remediation	of	matters	brought	to	these	committees. These	committees	may	escalate	to	the	FRC,	as	appropriate.

Line	of	Business,	Corporate	Function	and	Regional	Control	Committees	oversee the	control	environment	in	the	particular	line	of	business	or	corporate	function	or the	business	operating	in	a	particular	region.	They	are	responsible	for	reviewing the	data	indicating	the	quality	and	stability	of	the	processes	in	a	business	or function,	focusing	on	those	processes	with	shortcomings	and	overseeing	process remediation.	These	committees	escalate	to	the	FCC,	as	appropriate.

The	Asset	Liability	Committee	("ALCO"),	chaired	by	the	Firm's	Treasurer	under the	direction	of	the	COO,	monitors	the	Firm's	balance	sheet,	liquidity	risk	and structural	interest	rate	risk.	ALCO	reviews	the	Firm's	overall	structural	interest rate	risk	position,	funding	requirements	and	strategy,	and	securitization	programs (and	any	required	liquidity	support	by	the	Firm	of	such	programs).	ALCO	is responsible	for	reviewing	and	approving	the	Firm's	Funds	Transfer	Pricing Policy	(through	which	lines	of	business	"transfer"	interest	rate	risk	to	Treasury) and	the	Firm's	Intercompany	Funding	and	Liquidity	Policy.	ALCO	is	also responsible	for	reviewing	the	Firm's	Contingency	Funding	Plan.

The	Capital	Governance	Committee,	chaired	by	the	Head	of	the	Regulatory Capital	Management	Office	(under	the	direction	of	the	Firm's	CFO)	is responsible	for	reviewing	the	Firm's	Capital	Management	Policy	and	the principles	underlying	capital	issuance	and	distribution.	The	Committee	is	also responsible	for	governing	the	capital	adequacy	assessment	process,	including overall	design,	assumptions	and	risk	streams,	and	for	ensuring	that	capital	stress test	programs	are	designed	to	adequately	capture	the	idiosyncratic	risks	across the	Firm's	businesses.

The	Firmwide	Valuation	Governance	Forum	("VGF")	is	composed	of	senior finance	and	risk	executives	and	is	responsible	for	overseeing	the	management	of risks	arising	from	valuation	activities	conducted	across	the	Firm.	The	VGF	is chaired	by	the	firmwide	head	of	the	Valuation	Control	function	(under	the direction	of	the	Firm's	CFO),	and	includes	sub-forums	covering	the	Corporate	& Investment	Bank,	Consumer	&	Community	Banking,	Commercial	Banking, Asset	Management	and	certain	corporate	functions,	including	Treasury	and	Chief Investment	Office.

In	addition,	the	JPMorgan	Chase	Bank,	N.A.	Board	of	Directors	is	responsible for	the	oversight	of	management	of	the	Bank.	The	JPMorgan	Chase	Bank,	N.A. Board	accomplishes	this	function	acting	directly	and	through	the	principal standing	committees	of	the	Firm's	Board	of	Directors.	Risk	oversight	on	behalf of	JPMorgan	Chase	Bank	N.A.	is	primarily	the	responsibility	of	the	DRPC	and Audit	Committee	of	the	Firm's	Board	of	Directors	and,	with	respect	to compensation	and	other	management-related	matters,	the	Compensation	& Management	Development	Committee	of	the	Firm's	Board	of	Directors.

# Risk	measurement

The	Firm	has	a	broad	spectrum	of	risk	management	metrics,	as	appropriate	for each	risk	category	(refer	to	the	table	on	key	risks	included	on	page	108). Additionally,	the	Firm	is	exposed	to	certain	potential	low-probability,	but plausible	and	material,	idiosyncratic	risks	that	are	not	well-captured	by	its	other existing	risk	analysis	and	reporting	for	credit,	market,	and	other	risks.	These idiosyncratic	risks	may	arise	in	a	number	of	ways,	such	as	changes	in	legislation, an	unusual	combination	of	market	events,	or	specific	counterparty	events.	The Firm	has	a	process	intended	to	identify	these	risks	in	order	to	allow	the	Firm	to monitor	vulnerabilities	that	are	not	adequately	covered	by	its	other	standard	risk measurements.

# CREDIT	RISK	MANAGEMENT

Credit	risk	is	the	risk	of	loss	arising	from	the	default	of	a	customer,	client	or counterparty.	The	Firm	provides	credit	to	a	variety	of	customers,	ranging	from large	corporate	and	institutional	clients	to	individual	consumers	and	small businesses.	In	its	consumer	businesses,	the	Firm	is	exposed	to	credit	risk primarily	through	its	residential	real	estate,	credit	card,	auto,	business	banking and	student	lending	businesses.	Originated	mortgage	loans	are	retained	in	the mortgage	portfolio,	securitized	or	sold	to	U.S.	government	agencies	and	U.S. government-sponsored	enterprises;	other	types	of	consumer	loans	are	typically retained	on	the	balance	sheet.	In	its	wholesale	businesses,	the	Firm	is	exposed	to credit	risk	through	its	underwriting,	lending,	market-making,	and	hedging activities	with	and	for	clients	and	counterparties,	as	well	as	through	its	operating services	activities	(such	as	cash	management	and	clearing	activities),	securities financing	activities,	investment	securities	portfolio,	and	cash	placed	with	banks. A	portion	of	the	loans	originated	or	acquired	by	the	Firm's	wholesale	businesses are	generally	retained	on	the	balance	sheet;	the	Firm's	syndicated	loan	business distributes	a	significant	percentage	of	originations	into	the	market	and	is	an important	component	of	portfolio	management.

Credit	risk	management	is	an	independent	risk	management	function	that identifies	and	monitors	credit	risk	throughout	the	Firm	and	defines	credit	risk policies	and	procedures.	The	credit	risk	function	reports	to	the	Firm's	CRO.	The Firm's	credit	risk	management	governance	includes	the	following	activities:

•Establishing	a	comprehensive	credit	risk	policy framework

•Monitoring	and	managing	credit	risk	across	all	portfolio	segments,	including transaction	and	exposure	approval

•Setting	industry	concentration	limits	and	establishing	underwriting guidelines

•Assigning	and	managing	credit	authorities	in	connection	with	the	approval	of all	credit	exposure

•Managing	criticized	exposures	and	delinquent loans

•Determining	the	allowance	for	credit	losses	and	ensuring	appropriate	credit risk-based	capital	management

# Risk	identification	and	measurement

The	Credit	Risk	Management	function	identifies,	measures,	limits,	manages	and monitors	credit	risk	across	the	Firm's	businesses.	To	measure	credit	risk,	the Firm	employs	several	methodologies	for	estimating	the	likelihood	of	obligor	or counterparty	default.	Methodologies	for	measuring	credit	risk	vary	depending	on several	factors,	including	type	of	asset	(e.g.,	consumer	versus	wholesale),	risk measurement	parameters	(e.g.,	delinquency	status	and	borrower's	credit	score versus	wholesale	risk-rating)	and	risk	management	and	collection	processes (e.g.,	retail	collection	center	versus	centrally	managed	workout	groups).	Credit risk	measurement	is	based	on	the

probability	of	default	of	an	obligor	or	counterparty,	the	loss	severity	given	a default	event	and	the	exposure	at	default.

Based	on	these	factors	and	related	market-based	inputs,	the	Firm	estimates	credit losses	for	its	exposures.	Probable	credit	losses	inherent	in	the	consumer	and wholesale	loan	portfolios	are	reflected	in	the	allowance	for	loan	losses,	and probable	credit	losses	inherent	in	lending-related	commitments	are	reflected	in the	allowance	for	lending-related	commitments.	These	losses	are	estimated	using statistical	analyses	and	other	factors	as	described	in	Note	15.	In	addition, potential	and	unexpected	credit	losses	are	reflected	in	the	allocation	of	credit	risk capital	and	represent	the	potential	volatility	of	actual	losses	relative	to	the established	allowances	for	loan	losses	and	lending-related	commitments.	The analyses	for	these	losses	include	stress	testing	considering	alternative	economic scenarios	as	described	in	the	Stress	testing	section	below.	For	further information,	see	Critical	Accounting	Estimates	used	by	the	Firm	on	pages	165– 169.

The	methodologies	used	to	estimate	credit	losses	depend	on	the	characteristics	of the	credit	exposure,	as	described	below.

# Scored	exposure

The	scored	portfolio	is	generally	held	in	CCB	and	predominantly	includes residential	real	estate	loans,	credit	card	loans,	certain	auto	and	business	banking loans,	and	student	loans.	For	the	scored	portfolio,	credit	loss	estimates	are	based on	statistical	analysis	of	credit	losses	over	discrete	periods	of	time.	The	statistical analysis	uses	portfolio	modeling,	credit	scoring,	and	decision-support	tools, which	consider	loan-level	factors	such	as	delinquency	status,	credit	scores, collateral	values,	and	other	risk	factors.	Credit	loss	analyses	also	consider,	as appropriate,	uncertainties	and	other	factors,	including	those	related	to	current macroeconomic	and	political	conditions,	the	quality	of	underwriting	standards, and	other	internal	and	external	factors.	The	factors	and	analysis	are	updated	on	a quarterly	basis	or	more	frequently	as	market	conditions	dictate.

# Risk-rated	exposure

Risk-rated	portfolios	are	generally	held	in	CIB,	CB	and	AM,	but	also	include certain	business	banking	and	auto	dealer	loans	held	in	CCB	that	are	risk-rated because	they	have	characteristics	similar	to	commercial	loans.	For	the	risk-rated portfolio,	credit	loss	estimates	are	based	on	estimates	of	the	probability	of	default ("PD")	and	loss	severity	given	a	default.	The	estimation	process	begins	with	risk ratings	that	are	assigned	to	each	loan	facility	to	differentiate	risk	within	the portfolio.	These	risk	ratings	are	reviewed	regularly	by	Credit	Risk	Management and	revised	as	needed	to	reflect	the	borrower's	current	financial	position,	risk profile	and	related	collateral.	The	probability	of	default	is	the	likelihood	that	a loan	will	default	and	not	be	fully	repaid	by	the	borrower.	The	loss	given	default ("LGD")	is	the	estimated	loss	on	the	loan	that	would	be	realized	upon	the	default of

the	borrower	and	takes	into	consideration	collateral	and	structural	support	for each	credit	facility.	The	probability	of	default	is	estimated	for	each	borrower,	and a	loss	given	default	is	estimated	for	each	credit	facility.	The	calculations	and assumptions	are	based	on	historic	experience	and	management	judgment	and	are reviewed	regularly.

# Stress	testing

Stress	testing	is	important	in	measuring	and	managing	credit	risk	in	the	Firm's credit	portfolio.	The	process	assesses	the	potential	impact	of	alternative economic	and	business	scenarios	on	estimated	credit	losses	for	the	Firm. Economic	scenarios,	and	the	parameters	underlying	those	scenarios,	are	defined centrally,	are	articulated	in	terms	of	macroeconomic	factors,	and	applied	across the	businesses.	The	stress	test	results	may	indicate	credit	migration,	changes	in delinquency	trends	and	potential	losses	in	the	credit	portfolio.	In	addition	to	the periodic	stress	testing	processes,	management	also	considers	additional	stresses outside	these	scenarios,	including	industry	and	country-	specific	stress	scenarios, as	necessary.	The	Firm	uses	stress	testing	to	inform	decisions	on	setting	risk appetite	both	at	a	Firm	and	LOB	level,	as	well	as	to	assess	the	impact	of	stress	on individual	counterparties.

# Risk	monitoring	and	management

The	Firm	has	developed	policies	and	practices	that	are	designed	to	preserve	the independence	and	integrity	of	the	approval	and	decision-making	process	of extending	credit	to	ensure	credit	risks	are	assessed	accurately,	approved properly,	monitored	regularly	and	managed	actively	at	both	the	transaction	and portfolio	levels.	The	policy	framework	establishes	credit	approval	authorities, concentration	limits,	risk-rating	methodologies,	portfolio	review	parameters	and guidelines	for	management	of	distressed	exposures.	In	addition,	certain	models, assumptions	and	inputs	used	in	evaluating	and	monitoring	credit	risk	are independently	validated	by	groups	that	are	separate	from	the	line	of	businesses.

For	consumer	credit	risk,	delinquency	and	other	trends,	including	any concentrations	at	the	portfolio	level,	are	monitored,	as	certain	of	these	trends	can be	modified	through	changes	in	underwriting	policies	and	portfolio	guidelines. Consumer	Risk	Management	evaluates	delinquency	and	other	trends	against business	expectations,	current	and	forecasted	economic	conditions,	and	industry benchmarks.	Historical	and	forecasted	trends	are	incorporated	into	the	modeling of	estimated	consumer	credit	losses	and	are	part	of	the	monitoring	of	the	credit risk	profile	of	the	portfolio.	For	further	discussion	of	consumer	loans,	see	Note 14.

Wholesale	credit	risk	is	monitored	regularly	at	an	aggregate	portfolio,	industry, and	individual	client	and	counterparty	level	with	established	concentration	limits that	are	reviewed	and	revised	as	deemed	appropriate	by	management,	typically on	an	annual	basis.	Industry	and	counterparty	limits,	as	measured	in	terms	of exposure	and	economic	risk	appetite,	are	subject	to	stress-based	loss	constraints. In	addition,	wrong-way	risk	—	the	risk	that	exposure	to	a	counterparty	is positively	correlated	with	the	impact	of	a	default	by	the	same	counterparty, which	could	cause	exposure	to	increase	at	the	same	time	as	the	counterparty's capacity	to	meet	its	obligations	is	decreasing	—	is	actively	monitored	as	this	risk could	result	in	greater	exposure	at	default	compared	with	a	transaction	with another	counterparty	that	does	not	have	this	risk.

Management	of	the	Firm's	wholesale	credit	risk	exposure	is	accomplished through	a	number	of	means,	including:

•Loan	underwriting	and	credit	approval

process

•Loan	syndications	and	participations

•Loan	sales	and	securitizations

•Credit	derivatives

•Master	netting	agreements

•Collateral	and	other	risk-reduction	techniques

In	addition	to	Credit	Risk	Management,	Internal	Audit	performs	periodic	exams, as	well	as	continuous	reviews,	where	appropriate,	of	the	Firm's	consumer	and wholesale	portfolios.	For	risk-rated	portfolios,	a	Credit	Review	group	within Internal	Audit	is	responsible	for:

•Independently	assessing	and	validating	the	changing	risk	grades	assigned	to exposures;	and

•Evaluating	the	effectiveness	of	business	units'	risk	ratings,	including	the accuracy	and	consistency	of	risk	grades,	the	timeliness	of	risk	grade	changes and	the	justification	of	risk	grades	in	credit	memoranda.

# Risk	reporting

To	enable	monitoring	of	credit	risk	and	effective	decision-making,	aggregate credit	exposure,	credit	quality	forecasts,	concentration	levels	and	risk	profile changes	are	reported	regularly	to	senior	members	of	Credit	Risk	Management. Detailed	portfolio	reporting	of	industry,	customer,	product	and	geographic concentrations	occurs	monthly,	and	the	appropriateness	of	the	allowance	for credit	losses	is	reviewed	by	senior	management	at	least	on	a	quarterly	basis. Through	the	risk	reporting	and	governance	structure,	credit	risk	trends	and	limit exceptions	are	provided	regularly	to,	and	discussed	with,	risk	committees,	senior management	and	the	Board	of	Directors	as	appropriate.

# CREDIT	PORTFOLIO

In	the	following	tables,	reported	loans	include	loans	retained	(i.e.,	held-for- investment);	loans	held-for-sale	(which	are	carried	at	the	lower	of	cost	or	fair value,	with	valuation	changes	recorded	in	noninterest	revenue);	and	certain	loans accounted	for	at	fair	value.	In	addition,	the	Firm	records	certain	loans	accounted for	at	fair	value	in	trading	assets.	For	further	information	regarding	these	loans, see	Note	3	and	Note	4.	For	additional	information	on	the	Firm's	loans	and derivative	receivables,	including	the	Firm's	accounting	policies,	see	Note	14	and Note	6,	respectively.	For	further	information	regarding	the	credit	risk	inherent	in the	Firm's	cash	placed	with	banks,	investment	securities	portfolio,	and	securities financing	portfolio,	see	Note	5,	Note	12,	and	Note	13,	respectively.

Effective	January	1,	2015,	the	Firm	no	longer	includes	within	its	disclosure	of wholesale	lending-related	commitments	the	unused	amount	of	advised uncommitted	lines	of	credit	as	it	is	within	the	Firm's	discretion	whether	or	not	to make	a	loan	under	these	lines,	and	the	Firm's	approval	is	generally	required prior	to	funding.	Prior	period	amounts	have	been	revised	to	conform	with	the current	period	presentation.

For	discussion	of	the	consumer	credit	environment	and	consumer	loans,	see Consumer	Credit	Portfolio	on	pages	115–121	and	Note	14.	For	discussion	of wholesale	credit	environment	and	wholesale	loans,	see	Wholesale	Credit Portfolio	on	pages	122–129	and	Note	14.

# Total	credit	portfolio

(a) Represents	the	net	notional	amount	of	protection	purchased	and	sold	through	credit	derivatives	used	to	manage both	performing	and	nonperforming	wholesale	credit	exposures;	these	derivatives	do	not	qualify	for	hedge accounting	under	U.S.	GAAP.	For	additional	information,	see	Credit	derivatives	on	page	129	and	Note	6.

(b) Excludes	PCI	loans.	The	Firm	is	recognizing	interest	income	on	each	pool	of	PCI	loans	as	each	of	the	pools	is performing.

(c) At	December	31,	2015	and	2014,	nonperforming	assets	excluded:	(1)	mortgage	loans	insured	by	U.S. government	agencies	of	$6.3	billion	and	$7.8	billion,	respectively,	that	are	90	or	more	days	past	due;	(2)	student loans	insured	by	U.S.	government	agencies	under	the	FFELP	of	$290	million	and	$367	million,	respectively, that	are	90	or	more	days	past	due;	and	(3)	REO	insured	by	U.S.	government	agencies	of	$343	million	and	$462 million,	respectively.	These	amounts	have	been	excluded	based	upon	the	government	guarantee.	In	addition,	the Firm's	policy	is	generally	to	exempt	credit	card	loans	from	being	placed	on	nonaccrual	status	as	permitted	by regulatory	guidance	issued	by	the	Federal	Financial	Institutions	Examination	Council	("FFIEC").

# CONSUMER	CREDIT	PORTFOLIO

The	Firm's	consumer	portfolio	consists	primarily	of	residential	real	estate	loans, credit	card	loans,	auto	loans,	business	banking	loans,	and	student	loans.	The Firm's	focus	is	on	serving	the	prime	segment	of	the	consumer	credit	market.	The credit	performance	of	the	consumer	portfolio	continues	to	benefit	from	discipline in	credit	underwriting	as	well	as	improvement	in	the	economy	driven	by increasing	home	prices	and	lower	unemployment.	Both	early-stage

delinquencies	(30–89	days	delinquent)	and	late-stage	delinquencies	(150+	days delinquent)	for	residential	real	estate,	excluding	government	guaranteed	loans, declined	from	December	31,	2014	levels.	The	Credit	Card	30+	day	delinquency rate	and	the	net	charge-off	rate	remain	near	historic	lows.	For	further	information on	consumer	loans,

The	following	table	presents	consumer	credit-related	information	with	respect	to	the	credit	portfolio	held	by	CCB,	prime	mortgage	and	home	equity	loans	held	by	AM, and	prime	mortgage	loans	held	by	Corporate.	For	further	information	about	the	Firm's	nonaccrual	and	charge-off	accounting	policies,	see	Note	14.

| (in	millions,	except	ratios) | 2015 |  | 2014 |  | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Consumer,\texcluding\tcredit\tcard |  |  |  |  |  |  |  |  |  |  |
| Loans,\texcluding\tPCI\tloans\tand\tloans\theld-for-sale |  |  |  |  |  |  |  |  |  |  |
| Home\tequity\t–\tsenior\tlien | $14,848 |  | $16,367 |  | $867 | $938 | $69 | $82 | 0.43\t% | 0.50\t% |
| Home\tequity\t–\tjunior\tlien | 30,711 |  | 36,375 |  | 1,324 | 1,590 | 222 | 391 | 0.67 | 1.03 |
| Prime\tmortgage,\tincluding\toption\tARMs | 162,549 |  | 104,921 |  | 1,752 | 2,190 | 49 | 39 | 0.04 | 0.04 |
| Subprime\tmortgage | 3,690 |  | 5,056 |  | 751 | 1,036 | (53) | (27) | (1.22) | (0.43) |
| Auto(a) | 60,255 |  | 54,536 |  | 116 | 115 | 214 | 181 | 0.38 | 0.34 |
| Business\tbanking | 21,208 |  | 20,058 |  | 263 | 279 | 253 | 305 | 1.23 | 1.58 |
| Student\tand\tother | 10,096 |  | 10,970 |  | 242 | 270 | 200 | 347 | 1.89 | 3.07 |
| Total\tloans,\texcluding\tPCI\tloans\tand\tloans\theld-for-sale | 303,357 |  | 248,283 |  | 5,315 | 6,418 | 954 | 1,318 | 0.35 | 0.55 |
| Loans\t–\tPCI |  |  |  |  |  |  |  |  |  |  |
| Home\tequity | 14,989 |  | 17,095 |  | — | NA | — | NA | — | NA |
| Prime\tmortgage | 8,893 |  | 10,220 |  | — | NA | — | NA | — | NA |
| Subprime\tmortgage | 3,263 |  | 3,673 |  | — | NA | — | NA | — | NA |
| Option\tARMs(b) | 13,853 |  | 15,708 |  | — | NA | — | NA | — | NA |
| Total\tloans\t–\tPCI | 40,998 |  | 46,696 |  | — | NA | — | NA | — | NA |
| Total\tloans\t–\tretained | 344,355 |  | 294,979 |  | 5,315 | 6,418 | 954 | 1,318 | 0.30 | 0.46 |
| Loans\theld-for-sale | 466 | (f) | 395 | (f) | 98 | 91 | — | — | — | — |
| Total\tconsumer,\texcluding\tcredit\tcard\tloans | 344,821 |  | 295,374 |  | 5,413 | 6,509 | 954 | 1,318 | 0.30 | 0.46 |
| Lending-related\tcommitments(c) | 58,478 |  | 58,153 |  |  |  |  |  |  |  |
| Receivables\tfrom\tcustomers(d) | 125 |  | 108 |  |  |  |  |  |  |  |
| Total\tconsumer\texposure,\texcluding\tcredit\tcard | 403,424 |  | 353,635 |  |  |  |  |  |  |  |
| Credit\tCard |  |  |  |  |  |  |  |  |  |  |
| Loans\tretained(e) | 131,387 |  | 128,027 |  | — | — | 3,122 | 3,429 | 2.51 | 2.75 |
| Loans\theld-for-sale | 76 |  | 3,021 |  | — | — | — | — | — | — |
| Total\tcredit\tcard\tloans | 131,463 |  | 131,048 |  | — | — | 3,122 | 3,429 | 2.51 | 2.75 |
| Lending-related\tcommitments(c) | 515,518 |  | 525,963 |  |  |  |  |  |  |  |
| Total\tcredit\tcard\texposure | 646,981 |  | 657,011 |  |  |  |  |  |  |  |
| Total\tconsumer\tcredit\tportfolio | $1,050,405 |  | $1,010,646 |  | $5,413 | $6,509 | $4,076 | $4,747 | 0.92\t% | 1.15\t% |
| Memo:\tTotal\tconsumer\tcredit\tportfolio,\texcluding\tPCI | $1,009,407 |  | $963,950 |  | $5,413 | $6,509 | $4,076 | $4,747 | 1.02\t% | 1.30\t% |
| (f) Predominantly\trepresents\tprime\tmortgage\tloans\theld-for-sale. |  |  |  |  |  |  |  |  |  |  |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  |  |  |  |  |  | 115 |

(b) At	December	31,	2015	and	2014,	approximately	64%	and	57%	of	the	PCI	option	ARMs	portfolio	has	been	modified	into	fixed-rate,	fully	amortizing	loans,	respectively.

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

(d) Receivables	from	customers	represent	margin	loans	to	retail	brokerage	customers,	and	are	included	in	Accrued	interest	and	accounts	receivable	on	the	Consolidated	balance	sheets.

(e) Includes	accrued	interest	and	fees	net	of	an	allowance	for	the	uncollectible	portion	of	accrued	interest	and	fee	income.

(f) Predominantly	represents	prime	mortgage	loans	held-for-sale.

(g) At	December	31,	2015	and	2014,	nonaccrual	loans	excluded:	(1)	mortgage	loans	insured	by	U.S.	government	agencies	of	 $6.3	billion	and	$7.8	billion,	respectively,	that	are	90	or	more	days	past due;	and	(2)	student	loans	insured	by	U.S.	government	agencies	under	the	FFELP	of	$290	million	and	$367	million,	respectively,	that	are	90	or	more	days	past	due.	These	amounts	have	been excluded	from	nonaccrual	loans	based	upon	the	government	guarantee.	In	addition,	credit	card	loans	are	generally	exempt	from	being	placed	on	nonaccrual	status,	as	permitted	by	regulatory guidance.

(h) Excludes	PCI	loans.	The	Firm	is	recognizing	interest	income	on	each	pool	of	PCI	loans	as	each	of	the	pools	is	performing.

(i) Net	charge-offs	and	net	charge-off	rates	excluded	 $208	million	and	$533	million	of	write-offs	of	prime	mortgages	in	the	PCI	portfolio	for	the	years	ended	 December	31,	2015	and	2014.	These write-offs	decreased	the	allowance	for	loan	losses	for	PCI	loans.	See	Allowance	for	Credit	Losses	on	pages	130–132	for	further	details.

(j) Average	consumer	loans	held-for-sale	were	$2.1	billion	and	$917	million,	respectively,	for	the	years	ended	December	31,	2015	and	2014.	These	amounts	were	excluded	when	calculating	net charge-off	rates.

# Consumer,	excluding	credit	card

# Portfolio	analysis

Consumer	loan	balances	increased	during	the	year	ended	December	31,	2015, predominantly	due	to	originations	of	high-quality	prime	mortgage	loans	that have	been	retained,	partially	offset	by	paydowns	and	the	charge-off	or liquidation	of	delinquent	loans.	Credit	performance	has	continued	to	improve across	most	portfolios	as	the	economy	strengthened	and	home	prices	increased.

PCI	loans	are	excluded	from	the	following	discussions	of	individual	loan products	and	are	addressed	separately	below.	For	further	information	about	the Firm's	consumer	portfolio,	including	information	about	delinquencies,	loan modifications	and	other	credit	quality	indicators,	see Note	14.

Home	equity:	The	home	equity	portfolio	declined	from	December	31,	2014 primarily	reflecting	loan	paydowns	and	charge-offs.	Both	early-stage	and	late- stage	delinquencies	declined	from	December	31,	2014.	Net	charge-offs	for	both senior	and	junior	lien	home	equity	loans	at	December	31,	2015,	declined	when compared	with	the	prior	year	as	a	result	of	improvement	in	home	prices	and delinquencies,	but	charge-offs	remain	elevated	compared	with	pre-recessionary levels.

At	December	31,	2015,	approximately	15%	of	the	Firm's	home	equity	portfolio consists	of	home	equity	loans	("HELOANs")	and	the	remainder	consists	of	home equity	lines	of	credit	("HELOCs").	HELOANs	are	generally	fixed-rate,	closed- end,	amortizing	loans,	with	terms	ranging	from	3–30	years.	Approximately	60% of	the	HELOANs	are	senior	lien	loans	and	the	remainder	are	junior	lien	loans.	In general,	HELOCs	originated	by	the	Firm	are	revolving	loans	for	a	10-year period,	after	which	time	the	HELOC	recasts	into	a	loan	with	a	20-year amortization	period.	At	the	time	of	origination,	the	borrower	typically	selects one	of	two	minimum	payment	options	that	will	generally	remain	in	effect	during the	revolving	period:	a	monthly	payment	of	1%	of	the	outstanding	balance,	or interest-only	payments	based	on	a	variable	index	(typically	Prime).	HELOCs originated	by	Washington	Mutual	were	generally	revolving	loans	for	a	10-year period,	after	which	time	the	HELOC	converts	to	an	interest-only	loan	with	a balloon	payment	at	the	end	of	the	loan's	term.

The	unpaid	principal	balance	of	HELOCs	outstanding	was	$41	billion	at December	31,	2015.	Since	January	1,	2014,	approximately	$8	billion	of HELOCs	have	recast	from	interest-only	to	fully	amortizing	payments;	based upon	contractual	terms,	approximately	$19	billion	is	scheduled	to	recast	in	the future,	consisting	of	$7	billion	in	2016,	$6	billion	in	2017	and	$6	billion	in	2018 and	beyond.	However,	of	the	total	$19	billion	scheduled	to	recast	in	the	future, $13	billion	is	expected	to	actually	recast;	and	the	remaining	$6	billion	represents loans	to	borrowers	who	are	expected	to	pre-pay	or	loans	that	are	likely	to	charge- off	prior	to	recast.	The	Firm	has	considered	this	payment	recast	risk	in	its allowance	for	loan	losses	based	upon	the	estimated	amount	of	payment	shock (i.e.,	the	excess	of	the	fully-amortizing	payment	over	the	interest-only	payment	in effect	prior	to	recast)	expected	to	occur	at	the	payment	recast	date,	along	with	the corresponding	estimated	probability	of	default	and	loss	severity	assumptions. Certain	factors,	such	as	future	developments	in	both	unemployment	rates	and home	prices,	could	have	a	significant	impact	on	the	performance	of	these	loans.

The	Firm	manages	the	risk	of	HELOCs	during	their	revolving	period	by	closing or	reducing	the	undrawn	line	to	the	extent	permitted	by	law	when	borrowers	are exhibiting	a	material	deterioration	in	their	credit	risk	profile.	The	Firm	will continue	to	evaluate	both	the	near-term	and	longer-term	repricing	and	recast risks	inherent	in	its	HELOC	portfolio	to	ensure	that	changes	in	the	Firm's estimate	of	incurred	losses	are	appropriately	considered	in	the	allowance	for	loan losses	and	that	the	Firm's	account	management	practices	are	appropriate	given the	portfolio's	risk	profile.

High-risk	seconds	are	junior	lien	loans	where	the	borrower	has	a	senior	lien	loan that	is	either	delinquent	or	has	been	modified.	Such	loans	are	considered	to	pose a	higher	risk	of	default	than	junior	lien	loans	for	which	the	senior	lien	loan	is neither	delinquent	nor	modified.	The	Firm	estimates	the	balance	of	its	total exposure	to	high-risk	seconds	on	a	quarterly	basis	using	internal	data	and	loan level	credit	bureau	data	(which	typically	provides	the	delinquency	status	of	the senior	lien	loan).	The	estimated	balance	of	these	high-risk	seconds	may	vary from	quarter	to	quarter	for	reasons	such	as	the	movement	of	related	senior	lien loans	into	and	out	of	the	30+	day	delinquency	bucket.

# Current	high-risk	seconds

| December	31,	(in	billions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Junior\tliens\tsubordinate\tto: |  |  |
| Modified\tcurrent\tsenior\tlien | $0.6 | $0.7 |
| Senior\tlien\t30\t–\t89\tdays\tdelinquent | 0.4 | 0.5 |
| Senior\tlien\t90\tdays\tor\tmore\tdelinquent(a) | 0.4 | 0.6 |
| Total\tcurrent\thigh-risk\tseconds | $1.4 | $1.8 |

(a) Junior	liens	subordinate	to	senior	liens	that	are	90	days	or	more	past	due	are	classified	as nonaccrual	loans.	At	December	31,	2015	and	2014,	excluded	approximately	$25	million and	$50	million,	respectively,	of	junior	liens	that	are	performing	but	not	current,	which were	placed	on	nonaccrual	in	accordance	with	the	regulatory	guidance.

Of	the	estimated	$1.4	billion	of	current	high-risk	junior	liens	at	December	31, 2015,	the	Firm	owns	approximately	10%	and	services	approximately	25%	of	the related	senior	lien	loans	to	the	same	borrowers.	The	increased	probability	of default	associated	with	these	higher-risk	junior	lien	loans	was	considered	in estimating	the	allowance	for	loan	losses.

Mortgage:	Prime	mortgages,	including	option	ARMs	and	loans	held-for-sale, increased	from	December	31,	2014	due	to	originations	of	high-quality	prime mortgage	loans	that	have	been	retained	partially	offset	by	paydowns,	the	run-off of	option	ARM	loans	and	the	charge-off	or	liquidation	of	delinquent	loans.	High- quality	loan	originations	for	the	year	ending	December	31,	2015	included	both jumbo	and	conforming	loans,	primarily	consisting	of	fixed	interest	rate	loans. Excluding	loans	insured	by	U.S.	government	agencies,	both	early-stage	and	late- stage	delinquencies	declined	from	December	31,	2014.	Nonaccrual	loans decreased	from	the	prior	year	but	remain	elevated	primarily	as	a	result	of	loss mitigation	activities.	Net	charge-offs	remain	low,	reflecting	continued improvement	in	home	prices	and	delinquencies.

At	December	31,	2015	and	2014,	the	Firm's	prime	mortgage	portfolio	included $11.1	billion	and	$12.4	billion,	respectively,	of	mortgage	loans	insured	and/or guaranteed	by	U.S.	government	agencies,	of	which	$8.4	billion	and	$9.7	billion, respectively,	were	30	days	or	more	past	due	(of	these	past	due	loans,	$6.3	billion and	$7.8	billion,	respectively,	were	90	days	or	more	past	due).	In	2014,	the	Firm entered	into	a	settlement	regarding	loans	insured	under	federal	mortgage insurance	programs	overseen	by	the	Federal	Housing	Administration	("FHA"), the	U.S.	Department	of	Housing	and	Urban	Development	("HUD"),	and	the	U.S. Department	of	Veterans	Affairs	("VA");	the	Firm	will	continue	to	monitor exposure	on	future	claim	payments	for	government	insured	loans,	but	any financial	impact	related	to	exposure	on	future	claims	is	not	expected	to	be significant	and	was	considered	in	estimating	the	allowance	for	loan	losses.

At	December	31,	2015	and	2014,	the	Firm's	prime	mortgage	portfolio	included $17.7	billion	and	$16.3	billion,	respectively,	of	interest-only	loans,	which represented	11%	and	15%,	respectively,	of	the	prime	mortgage	portfolio.	These loans	have	an	interest-only	payment	period	generally	followed	by	an	adjustable- rate	or	fixed-rate	fully	amortizing	payment	period	to	maturity	and	are	typically originated	as	higher-balance	loans	to	higher-income	borrowers.	To	date,	losses on	this	portfolio	generally	have	been	consistent	with	the	broader	prime	mortgage portfolio	and	the	Firm's	expectations.	The	Firm	continues	to	monitor	the	risks associated	with	these	loans.

Subprime	mortgages	continued	to	decrease	due	to	portfolio	runoff.	Early-stage and	late-stage	delinquencies	have	improved	from	December	31,	2014.	Net charge-offs	continued	to	improve	as	a	result	of	improvement	in	home	prices	and delinquencies.

Auto:	Auto	loans	increased	from	December	31,	2014,	as	new	originations outpaced	paydowns	and	payoffs.	Nonaccrual	loans	were	stable	compared	with December	31,	2014.	Net	charge-offs	for	the	year	ended	December	31,	2015 increased	compared	with	the	prior	year,	as	a	result	of	higher	loan	balances	and	a moderate	increase	in	loss	severity.	The	auto	loan	portfolio	predominantly consists	of	prime-quality	credits.

Business	banking:	Business	banking	loans	increased	from	December	31,	2014 due	to	an	increase	in	loan	originations.	Nonaccrual	loans	declined	from December	31,	2014	and	net	charge-offs	for	the	year	ended	December	31,	2015 decreased	from	the	prior	year	due	to	continued	discipline	in	credit	underwriting.

Student	and	other:	Student	and	other	loans	decreased	from	December	31,	2014 due	primarily	to	the	run-off	of	the	student	loan	portfolio	as	the	Firm	ceased originations	of	student	loans	during	the	fourth	quarter	of	2013.	Nonaccrual	loans and	net	charge-offs	also	declined	as	a	result	of	the	run-off	of	the	student	loan portfolio.

Purchased	credit-impaired	loans:	PCI	loans	acquired	in	the	Washington Mutual	transaction	decreased	as	the	portfolio	continues	to	run	off.

As	of	December	31,	2015,	approximately	14%	of	the	option	ARM	PCI	loans were	delinquent	and	approximately	64%	of	the	portfolio	has	been	modified	into fixed-rate,	fully	amortizing	loans.	Substantially	all	of	the	remaining	loans	are making	amortizing	payments,	although	such	payments	are	not	necessarily	fully amortizing.	This	latter	group	of	loans	is	subject	to	the	risk	of	payment	shock	due to	future	payment	recast.	Default	rates	generally	increase	on	option	ARM	loans when	payment	recast	results	in	a	payment	increase.	The	expected	increase	in default	rates	is	considered	in	the	Firm's	quarterly	impairment	assessment.

The	following	table	provides	a	summary	of	lifetime	principal	loss	estimates	included	in	either	the	nonaccretable	difference	or	the	allowance	for	loan	losses.

# Summary	of	lifetime	principal	loss	estimates

| December	31,	(in	billions) | Lifetime	loss	estimates(a) |  | LTD	liquidation	losses(b) |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2015 | 2014 | 2015 | 2014 |
| Home\tequity | $14.5 | $14.6 | $12.7 | $12.4 |
| Prime\tmortgage | 4.0 | 3.8 | 3.7 | 3.5 |
| Subprime\tmortgage | 3.3 | 3.3 | 3.0 | 2.8 |
| Option\tARMs | 10.0 | 9.9 | 9.5 | 9.3 |
| Total | $31.8 | $31.6 | $28.9 | $28.0 |

(a) Includes	the	original	nonaccretable	difference	established	in	purchase	accounting	of	 $30.5	billion	for	principal	losses	plus	additional	principal	losses	recognized	subsequent	to	acquisition	through	the	provision	and allowance	for	loan	losses.	The	remaining	nonaccretable	difference	for	principal	losses	was	$1.5	billion	and	$2.3	billion	at	December	31,	2015	and	2014,	respectively.

(b) Life-to-date	("LTD")	liquidation	losses	represent	both	realization	of	loss	upon	loan	resolution	and	any	principal	forgiven	upon	modification.

For	further	information	on	the	Firm's	PCI	loans,	including	write-offs,	see	Note	14.

# Geographic	composition	of	residential	real	estate	loans

At	December	31,	2015,	$123.0	billion,	or	61%	of	total	retained	residential	real	estate	loan	portfolio,	excluding	mortgage	loans	insured	by	U.S.	government	agencies	and PCI	loans,	were	concentrated	in	California,	New	York,	Illinois,	Texas	and	Florida,	compared	with	$94.3	billion,	or	63%,	at	December	31,	2014.	California	had	the greatest	concentration	of	retained	residential	loans	with	28%	at	December	31,	2015,	compared	with	26%	at	December	31,	2014.	The	unpaid	principal	balance	of	PCI loans	concentrated	in	these	five	states	represented	74%	of	total	PCI	loans	at	both	December	31,	2015,	and	December	31,	2014.	For	further	information	on	the	geographic composition	of	the	Firm's	residential	real	estate	loans,	see	Note	14.

# Current	estimated	loan-to-values	("LTVs")	of	residential	real estate	loans

The	current	estimated	average	LTV	ratio	for	residential	real	estate	loans	retained, excluding	mortgage	loans	insured	by	U.S.	government	agencies	and	PCI	loans, was	59%	at	both	December	31,	2015	and	2014.

Although	home	prices	continue	to	recover,	the	decline	in home	prices	since	2007	has	had	a	significant	impact	on	the	collateral	values underlying	the	Firm's	residential	real	estate	loan	portfolio.	In	general,	the delinquency	rate	for	loans	with	high	LTV	ratios	is	greater	than	the	delinquency rate	for	loans	in	which	the	borrower	has	greater	equity	in	the	collateral.	While	a large	portion	of	the	loans	with	current	estimated	LTV	ratios	greater	than	100% continue	to	pay	and	are	current,	the	continued	willingness	and	ability	of	these borrowers	to	pay	remains	a	risk.

The	following	table	presents	the	current	estimated	LTV	ratios	for	PCI	loans,	as	well	as	the	ratios	of	the	carrying	value	of	the	underlying	loans	to	the	current	estimated collateral	value.	Because	such	loans	were	initially	measured	at	fair	value,	the	ratios	of	the	carrying	value	to	the	current	estimated	collateral	value	will	be	lower	than	the current	estimated	LTV	ratios,	which	are	based	on	the	unpaid	principal	balances.	The	estimated	collateral	values	used	to	calculate	these	ratios	do	not	represent	actual appraised	loan-level	collateral	values;	as	such,	the	resulting	ratios	are	necessarily	imprecise	and	should	therefore	be	viewed	as	estimates.

# LTV	ratios	and	ratios	of	carrying	values	to	current	estimated	collateral	values	–	PCI	loans

|  | LTV	ratios	and	ratios	of	carrying	values	to	current	estimated	collateral	values	–	PCI	loans | LTV	ratios	and	ratios	of	carrying	values	to	current	estimated	collateral	values	–	PCI	loans | 2015 |  |  |  |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions,\nexcept\tratios) | Unpaid\nprincipal\nbalance | Current\testimated\nLTV\tratio(a)(b) | Net\tcarrying\nvalue(d) | Ratio\tof\tnet\ncarrying\tvalue\nto\tcurrent\testimated\ncollateral\tvalue(b)(d) |  | Unpaid\nprincipal\nbalance | Current\testimated\nLTV\tratio(a)(b) | Net\tcarrying\nvalue(d) | Ratio\tof\tnet\ncarrying\tvalue\nto\tcurrent\testimated\ncollateral\tvalue(b)(d) |
| Home\tequity | $15,342 | 73% (c) | $13,281 | 68% | (e) | $17,740 | 78% (c) | $15,337 | 73% |
| Prime\tmortgage | 8,919 | 66 | 7,908 | 58 |  | 10,249 | 71 | 9,027 | 63 |
| Subprime\tmortgage | 4,051 | 73 | 3,263 | 59 |  | 4,652 | 79 | 3,493 | 59 |
| Option\tARMs | 14,353 | 64 | 13,804 | 62 |  | 16,496 | 69 | 15,514 | 65 |

(a) Represents	the	aggregate	unpaid	principal	balance	of	loans	divided	by	the	estimated	current	property	value.	Current	property	values	are	estimated	at	least	quarterly	based	on	home	valuation	models	that	utilize nationally	recognized	home	price	index	valuation	estimates;	such	models	incorporate	actual	data	to	the	extent	available	and	forecasted	data	where	actual	data	is	not	available.

(b) Effective	December	31,	2015,	the	current	estimated	LTV	ratios	and	the	ratios	of	net	carrying	value	to	current	estimated	collateral	value	reflect	updates	to	the	nationally	recognized	home	price	index	valuation estimates	incorporated	into	the	Firm's	home	valuation	models.	The	prior	period	ratios	have	been	revised	to	conform	with	these	updates	in	the	home	price	index.

(c) Represents	current	estimated	combined	LTV	for	junior	home	equity	liens,	which	considers	all	available	lien	positions,	as	well	as	unused	lines,	related	to	the	property.	All	other	products	are	presented	without consideration	of	subordinate	liens	on	the	property.

(d) Net	carrying	value	includes	the	effect	of	fair	value	adjustments	that	were	applied	to	the	consumer	PCI	portfolio	at	the	date	of	acquisition	and	is	also	net	of	the	allowance	for	loan	losses	at December	31,	2015	and	2014 of	$985	million	and	$1.2	billion	for	prime	mortgage,	$49	million	and	$194	million	for	option	ARMs,	 $1.7	billion	and	$1.8	billion	for	home	equity,	respectively,	and	$180	million	for	subprime	mortgage	at December	31,	2014.	There	was	no	allowance	for	loan	losses	for	subprime	mortgage	at	 December	31,	2015.

(e) The	current	period	ratio	has	been	updated	to	include	the	effect	of	any	outstanding	senior	lien	related	to	a	property	for	which	the	Firm	holds	the	junior	home	equity	lien.	The	prior	period	ratio	has	been	revised	to conform	with	the	current	presentation.

The	current	estimated	average	LTV	ratios	were	65%	and	78%	for	California	and Florida	PCI	loans,	respectively,	at	December	31,	2015,	compared	with	71%	and 85%,	respectively,	at	December	31,	2014.	Average	LTV	ratios	have	declined consistent	with	recent	improvements	in	home	prices	as	well	as	a	result	of	loan pay	downs.	Although	home	prices	have	improved,	home	prices	in	most	areas	of California	and	Florida	are	still	lower	than	at	the	peak	of	the	housing	market;	this continues	to	negatively	affect	current	estimated	average	LTV	ratios	and	the	ratio of	net	carrying	value	to	current	estimated	collateral	value	for	loans	in	the	PCI portfolio.	Of	the	total	PCI	portfolio,	6%	of	the	loans	had	a	current	estimated	LTV ratio	greater	than	100%,	and	1%	had	a	current	LTV	ratio	of	greater	than	125%	at December	31,	2015,	compared	with	10%	and	2%,	respectively,	at	December	31, 2014.

While	the	current	estimated	collateral	value	is	greater	than	the	net	carrying	value of	PCI	loans,	the	ultimate	performance	of	this	portfolio	is	highly	dependent	on borrowers'	behavior	and	ongoing	ability	and	willingness	to	continue	to	make payments	on	homes	with	negative	equity,	as	well	as	on	the	cost	of	alternative housing.

For	further	information	on	current	estimated	LTVs	of	residential	real	estate loans,	see	Note	14.

# Loan	modification	activities	–	residential	real	estate	loans

The	performance	of	modified	loans	generally	differs	by	product	type	due	to differences	in	both	the	credit	quality	and	the	types	of	modifications	provided. Performance

metrics	for	modifications	to	the	residential	real	estate	portfolio,	excluding	PCI loans,	that	have	been	seasoned	more	than	six	months	show	weighted-average redefault	rates	of	20%	for	senior	lien	home	equity,	22%	for	junior	lien	home equity,	17%	for	prime	mortgages	including	option	ARMs,	and	29%	for	subprime mortgages.	The	cumulative	performance	metrics	for	modifications	to	the	PCI residential	real	estate	portfolio	that	have	been	seasoned	more	than	six	months show	weighted	average	redefault	rates	of	20%	for	home	equity,	19%	for	prime mortgages,	16%	for	option	ARMs	and	33%	for	subprime	mortgages.	The favorable	performance	of	the	PCI	option	ARM	modifications	is	the	result	of	a targeted	proactive	program	which	fixed	the	borrower's	payment	to	the	amount	at the	point	of	modification.	The	cumulative	redefault	rates	reflect	the	performance of	modifications	completed	under	both	the	U.S.	Government's	Home	Affordable Modification	Program	("HAMP")	and	the	Firm's	proprietary	modification programs	(primarily	the	Firm's	modification	program	that	was	modeled	after HAMP)	from	October	1,	2009,	through	December	31,	2015.

Certain	loans	that	were	modified	under	HAMP	and	the	Firm's	proprietary modification	programs	have	interest	rate	reset	provisions	("step-rate modifications").	Interest	rates	on	these	loans	generally	began	to	increase	in	2014 by	1%	per	year	and	will	continue	to	do	so,	until	the	rate	reaches	a	specified	cap, typically	at	a	prevailing	market	interest	rate	for	a	fixed-rate	loan	as	of	the modification	date.	The

carrying	value	of	non-PCI	loans	modified	in	step-rate	modifications	was	$4 billion	at	December	31,	2015,	with	$447	million	that	experienced	the	initial interest	rate	increase	in	2015	and	$1	billion	that	is	scheduled	to	experience	the initial	interest	rate	increase	in	each	of	2016	and	2017.	The	unpaid	principal balance	of	PCI	loans	modified	in	step-rate	modifications	was	$10	billion	at December	31,	2015,	with	$1	billion	that	experienced	the	initial	interest	rate increase	in	2015,	and	$3	billion	and	$2	billion	scheduled	to	experience	the	initial interest	rate	increase	in	2016	and	2017,	respectively.	The	Firm	continues	to monitor	this	risk	exposure	to	ensure	that	it	is	appropriately	considered	in	the allowance	for	loan	losses.

The	following	table	presents	information	as	of	December	31,	2015	and	2014, relating	to	modified	retained	residential	real	estate	loans	for	which	concessions have	been	granted	to	borrowers	experiencing	financial	difficulty.	Modifications of	PCI	loans	continue	to	be	accounted	for	and	reported	as	PCI	loans,	and	the impact	of	the	modification	is	incorporated	into	the	Firm's	quarterly	assessment of	estimated	future	cash	flows.	Modifications	of	consumer	loans	other	than	PCI loans	are	generally	accounted	for	and	reported	as	TDRs.	For	further	information on	modifications	for	the	years	ended	December	31,	2015	and	2014,	see	Note	14.

# Modified	residential	real	estate	loans

(a) Amounts	represent	the	carrying	value	of	modified	residential	real	estate loans.

(b) At	December	31,	2015	and	2014,	$3.8	billion	and	$4.9	billion,	respectively,	of	loans	modified	subsequent	to repurchase	from	Ginnie	Mae	in	accordance	with	the	standards	of	the	appropriate	government	agency	(i.e.,	FHA,

VA,	RHS)	are	not	included	in	the	table	above.	When	such	loans	perform	subsequent	to	modification	in accordance	with	Ginnie	Mae	guidelines,	they	are	generally	sold	back	into	Ginnie	Mae	loan	pools.	Modified loans	that	do	not	re-perform	become	subject	to	foreclosure.	For	additional	information	about	sales	of	loans	in securitization	transactions	with	Ginnie	Mae,	see	Note	16.

(c) Amounts	represent	the	unpaid	principal	balance	of	modified	PCI loans.

(d) As	of	December	31,	2015	and	2014,	nonaccrual	loans	included	$2.5	billion	and	$2.9	billion,	respectively,	of TDRs	for	which	the	borrowers	were	less	than	90	days	past	due.	For	additional	information	about	loans	modified in	a	TDR	that	are	on	nonaccrual	status,	see	Note	14.

# Nonperforming	assets

The	following	table	presents	information	as	of	December	31,	2015	and	2014, about	consumer,	excluding	credit	card,	nonperforming	assets.

# Nonperforming	assets(a)

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Nonaccrual\tloans(b) |  |  |
| Residential\treal\testate | $4,792 | $5,845 |
| Other\tconsumer | 621 | 664 |
| Total\tnonaccrual\tloans | 5,413 | 6,509 |
| Assets\tacquired\tin\tloan\tsatisfactions |  |  |
| Real\testate\towned | 277 | 437 |
| Other | 48 | 36 |
| Total\tassets\tacquired\tin\tloan\tsatisfactions | 325 | 473 |
| Total\tnonperforming\tassets | $5,738 | $6,982 |

(a) At	December	31,	2015	and	2014,	nonperforming	assets	excluded:	(1)	mortgage	loans	insured	by	U.S. government	agencies	of	$6.3	billion	and	$7.8	billion,	respectively,	that	are	90	or	more	days	past	due;	(2)	student loans	insured	by	U.S.	government	agencies	under	the	FFELP	of	$290	million	and	$367	million,	respectively, that	are	90	or	more	days	past	due;	and	(3)	real	estate	owned	insured	by	U.S.	government	agencies	of	$343 million	and	$462	million,	respectively.	These	amounts	have	been	excluded	based	upon	the	government guarantee.

(b) Excludes	PCI	loans	that	were	acquired	as	part	of	the	Washington	Mutual	transaction,	which	are	accounted	for on	a	pool	basis.	Since	each	pool	is	accounted	for	as	a	single	asset	with	a	single	composite	interest	rate	and	an aggregate	expectation	of	cash	flows,	the	past-due	status	of	the	pools,	or	that	of	individual	loans	within	the	pools, is	not	meaningful.	Because	the	Firm	is	recognizing	interest	income	on	each	pool	of	loans,	each	pool	is considered	to	be	performing.

Nonaccrual	loans	in	the	residential	real	estate	portfolio	totaled	$4.8	billion	and $5.8	billion	at	December	31,	2015,	and	2014,	respectively,	of	which	31%	and 32%,	respectively,	were	greater	than	150	days	past	due.	In	the	aggregate,	the unpaid	principal	balance	of	residential	real	estate	loans	greater	than	150	days past	due	was	charged	down	by	approximately	44%	and	50%	to	the	estimated	net realizable	value	of	the	collateral	at	December	31,	2015	and	2014,	respectively.

Active	and	suspended	foreclosure:	For	information	on	loans	that	were	in	the process	of	active	or	suspended	foreclosure,	see	Note	14.

Nonaccrual	loans:	The	following	table	presents	changes	in	the	consumer, excluding	credit	card,	nonaccrual	loans	for	the	years	ended	December	31,	2015 and	2014.

# Nonaccrual	loans

Year	ended	December	31,

| (in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Beginning\tbalance | $6,509 | $7,496 |
| Additions | 3,662 | 4,905 |
| Reductions: |  |  |
| Principal\tpayments\tand\tother(a) | 1,668 | 1,859 |
| Charge-offs | 800 | 1,306 |
| Returned\tto\tperforming\tstatus | 1,725 | 2,083 |
| Foreclosures\tand\tother\tliquidations | 565 | 644 |
| Total\treductions | 4,758 | 5,892 |
| Net\tadditions/(reductions) | (1,096) | (987) |
| Ending\tbalance | $5,413 | $6,509 |

(a) Other	reductions	includes	loan	sales.

# Credit	Card

Total	credit	card	loans	increased	from	December	31,	2014	due	to	higher	new account	originations	and	increased	credit	card	sales	volume	partially	offset	by sales	of	non-core	loans	and	the	transfer	of	commercial	card	loans	to	the	CIB.	The 30+	day	delinquency	rate	decreased	to	1.43%	at	December	31,	2015,	from	1.44% at	December	31,	2014.	For	the	years	ended	December	31,	2015	and	2014,	the	net charge-off	rates	were	2.51%	and	2.75%,	respectively.	The	Credit	Card	30+	day delinquency	rate	and	net	charge-off	rate	remain	near	historic	lows.	Charge-offs have	improved	compared	to	a	year	ago	due	to	continued	discipline	in	credit underwriting	as	well	as	improvement	in	the	economy	driven	by	lower unemployment.	The	credit	card	portfolio	continues	to	reflect	a	well-seasoned, largely	rewards-based	portfolio	that	has	good	U.S.	geographic	diversification.

Loans	outstanding	in	the	top	five	states	of	California,	Texas,	New	York,	Florida and	Illinois	consisted	of	$57.5	billion	in	receivables,	or	44%	of	the	retained	loan portfolio,	at	December	31,	2015,	compared	with	$54.9	billion,	or	43%,	at December	31,	2014.	The	greatest	geographic	concentration	of	credit	card retained	loans	is	in	California,	which	represented	14%	of	total	retained	loans	at both	December	31,	2015	and	2014,	respectively.	For	further	information	on	the geographic	composition	of	the	Firm's	credit	card	loans,	see	Note	14.

# Modifications	of	credit	card	loans

At	December	31,	2015	and	2014,	the	Firm	had	$1.5	billion	and	$2.0	billion, respectively,	of	credit	card	loans	outstanding	that	have	been	modified	in	TDRs. These	balances	included	both	credit	card	loans	with	modified	payment	terms	and credit	card	loans	that	reverted	back	to	their	pre-modification	payment	terms because	the	cardholder	did	not	comply	with	the	modified	payment	terms.	The decrease	in	modified	credit	card	loans	outstanding	from	December	31,	2014,	was attributable	to	a	reduction	in	new	modifications	as	well	as	ongoing	payments	and charge-offs	on	previously	modified	credit	card	loans.

Consistent	with	the	Firm's	policy,	all	credit	card	loans	typically	remain	on accrual	status	until	charged	off.	However,	the	Firm	establishes	an	allowance, which	is	offset	against	loans	and	charged	to	interest	income,	for	the	estimated uncollectible	portion	of	accrued	interest	and	fee	income.

For	additional	information	about	loan	modification	programs	to	borrowers,	see Note	14.

# WHOLESALE	CREDIT	PORTFOLIO

The	Firm's	wholesale	businesses	are	exposed	to	credit	risk	through	underwriting, lending,	market-making,	and	hedging	activities	with	and	for	clients	and counterparties,	as	well	as	through	various	operating	services	such	as	cash management	and	clearing	activities.	A	portion	of	the	loans	originated	or	acquired by	the	Firm's	wholesale	businesses	is	generally	retained	on	the	balance	sheet. The	Firm	distributes	a	significant	percentage	of	the	loans	it	originates	into	the market	as	part	of	its	syndicated	loan	business	and	to	manage	portfolio concentrations	and	credit	risk.

The	wholesale	credit	portfolio,	excluding	Oil	&	Gas,	continued	to	be	generally stable	throughout	2015,	characterized	by	low	levels	of	criticized	exposure, nonaccrual	loans	and	charge-offs.	Growth	in	loans	retained	was	driven	by increased	client	activity,	notably	in	commercial	real	estate.	Discipline	in underwriting	across	all	areas	of	lending	continues	to	remain	a	key	point	of	focus. The	wholesale	portfolio	is	actively	managed,	in	part	by	conducting	ongoing,	in- depth	reviews	of	client	credit	quality	and	transaction	structure,	inclusive	of collateral	where	applicable;	and	of	industry,	product	and	client	concentrations.

| December	31, | Credit	exposure |  | Nonperforming(c) |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | 2014 | 2015 | 2014 |
| Loans\tretained | $357,050 | $324,502 | $988 | $599 |
| Loans\theld-for-sale | 1,104 | 3,801 | 3 | 4 |
| Loans\tat\tfair\tvalue | 2,861 | 2,611 | 25 | 21 |
| Loans\t–\treported | 361,015 | 330,914 | 1,016 | 624 |
| Derivative\treceivables | 59,677 | 78,975 | 204 | 275 |
| Receivables\tfrom\tcustomers\tand\nother(a) | 13,372 | 28,972 | — | — |
| Total\twholesale\tcredit-related\nassets | 434,064 | 438,861 | 1,220 | 899 |
| Lending-related\tcommitments | 366,399 | 366,881 | 193 | 103 |
| Total\twholesale\tcredit\nexposure | $800,463 | $805,742 | $1,413 | $1,002 |
| Credit\tderivatives\tused |  |  |  |  |
| in\tcredit\tportfolio\tmanagement |  |  |  |  |
| activities(b) | $(20,681) | $(26,703) | $(9) | $— |
| Liquid\tsecurities\tand\tother\tcash |  |  |  |  |
| collateral\theld\tagainst |  |  |  |  |
| derivatives | (16,580) | (19,604) | NA | NA |

(a) Receivables	from	customers	and	other	include	$13.3	billion	and	$28.8	billion	of	margin loans	at	December	31,	2015	and	2014,	respectively,	to	prime	and	retail	brokerage customers;	these	are	classified	in	accrued	interest	and	accounts	receivable	on	the Consolidated	balance	sheets.

(b) Represents	the	net	notional	amount	of	protection	purchased	and	sold	through	credit derivatives	used	to	manage	both	performing	and	nonperforming	wholesale	credit exposures;	these	derivatives	do	not	qualify	for	hedge	accounting	under	U.S.	GAAP.	For additional	information,	see	Credit	derivatives	on	page	129,	and	Note	6.

(c) Excludes	assets	acquired	in	loan	satisfactions.

The	following	tables	present	the	maturity	and	ratings	profiles	of	the	wholesale	credit	portfolio	as	of	December	31,	2015	and	2014.	The	ratings	scale	is	based	on	the Firm's	internal	risk	ratings,	which	generally	correspond	to	the	ratings	as	defined	by	S&P	and	Moody's.	For	additional	information	on	wholesale	loan	portfolio	risk ratings,	see	Note	14.

# Wholesale	credit	exposure	–	maturity	and	ratings	profile

|  |  | Maturity	profile(e) | Maturity	profile(e) |  |  | Ratings	profile |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Due\tafter |  |  | Investment-grade | Noninvestment-grade |  |  |
| December\t31,\t2015\n(in\tmillions,\texcept\tratios) | Due\tin\t1\tyear\tor\nless | 1\tyear\tthrough\n5\tyears | Due\tafter\t5\tyears | Total | AAA/Aaa\tto\nBBB-/Baa3 | BB+/Ba1\t&amp;\tbelow | Total | Total\t%\nof\tIG |
| Loans\tretained | $110,348 | $155,902 | $90,800 | $357,050 | $267,736 | $89,314 | $357,050 | 75% |
| Derivative\treceivables |  |  |  | 59,677 |  |  | 59,677 |  |
| Less:\tLiquid\tsecurities\tand\tother\tcash\tcollateral\theld\tagainst\tderivatives |  |  |  | (16,580) |  |  | (16,580) |  |
| Total\tderivative\treceivables,\tnet\tof\tall\tcollateral | 11,399 | 12,836 | 18,862 | 43,097 | 34,773 | 8,324 | 43,097 | 81 |
| Lending-related\tcommitments | 105,514 | 251,042 | 9,843 | 366,399 | 267,922 | 98,477 | 366,399 | 73 |
| Subtotal | 227,261 | 419,780 | 119,505 | 766,546 | 570,431 | 196,115 | 766,546 | 74 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\tvalue(a) |  |  |  | 3,965 |  |  | 3,965 |  |
| Receivables\tfrom\tcustomers\tand\tother |  |  |  | 13,372 |  |  | 13,372 |  |
| Total\texposure\t–\tnet\tof\tliquid\tsecurities\tand\tother\tcash\tcollateral\nheld\tagainst\tderivatives |  |  |  | $783,883 |  |  | $783,883 |  |
| Credit\tderivatives\tused\tin\tcredit\tportfolio\tmanagement\tactivities\tby\nreference\tentity\tratings\tprofile(b)(c)(d) | $(808) | $(14,427) | $(5,446) | $(20,681) | $(17,754) | $(2,927) | $(20,681) | 86% |

|  |  | Maturity	profile(e) | Maturity	profile(e) |  |  |  | Ratings	profile | Ratings	profile |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Due\tafter |  |  | Investment-grade |  | Noninvestment-grade |  |  |  |
| December\t31,\t2014\n(in\tmillions,\texcept\tratios) | Due\tin\t1\tyear\tor\nless | 1\tyear\tthrough\n5\tyears | Due\tafter\t5\tyears | Total | AAA/Aaa\tto\nBBB-/Baa3 |  | BB+/Ba1\t&amp;\tbelow |  | Total | Total\t%\nof\tIG |
| Loans\tretained | $112,411 | $134,277 | $77,814 | $324,502 | $241,666 |  | $82,836 |  | $324,502 | 74% |
| Derivative\treceivables |  |  |  | 78,975 |  |  |  |  | 78,975 |  |
| Less:\tLiquid\tsecurities\tand\tother\tcash\tcollateral\theld\tagainst\tderivatives |  |  |  | (19,604) |  |  |  |  | (19,604) |  |
| Total\tderivative\treceivables,\tnet\tof\tall\tcollateral | 20,032 | 16,130 | 23,209 | 59,371 | 50,815 | (f) | 8,556 | (f) | 59,371 | 86 |
| Lending-related\tcommitments | 94,635 | 262,572 | 9,674 | 366,881 | 284,288 |  | 82,593 |  | 366,881 | 77 |
| Subtotal | 227,078 | 412,979 | 110,697 | 750,754 | 576,769 |  | 173,985 |  | 750,754 | 77 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\tvalue(a) |  |  |  | 6,412 |  |  |  |  | 6,412 |  |
| Receivables\tfrom\tcustomers\tand\tother |  |  |  | 28,972 |  |  |  |  | 28,972 |  |
| Total\texposure\t–\tnet\tof\tliquid\tsecurities\tand\tother\tcash\tcollateral\nheld\tagainst\tderivatives |  |  |  | $786,138 |  |  |  |  | $786,138 |  |
| Credit\tderivatives\tused\tin\tcredit\tportfolio\tmanagement\tactivities\tby\nreference\tentity\tratings\tprofile(b)(c)(d) | $(2,050) | $(18,653) | $(6,000) | $(26,703) | $(23,571) |  | $(3,132) |  | $(26,703) | 88% |

(a) Represents	loans	held-for-sale,	primarily	related	to	syndicated	loans	and	loans	transferred	from	the	retained	portfolio,	and	loans	at	fair value.

(b) These	derivatives	do	not	quality	for	hedge	accounting	under	U.S.

GAAP.

(c) The	notional	amounts	are	presented	on	a	net	basis	by	underlying	reference	entity	and	the	ratings	profile	shown	is	based	on	the	ratings	of	the	reference	entity	on	which	protection	has	been purchased.

(d) Predominantly	all	of	the	credit	derivatives	entered	into	by	the	Firm	where	it	has	purchased	protection,	including	Credit	derivatives	used	in	credit	portfolio	management	activities,	are	executed	with	investment	grade counterparties.

(e) The	maturity	profile	of	retained	loans,	lending-related	commitments	and	derivative	receivables	is	based	on	remaining	contractual	maturity.	Derivative	contracts	that	are	in	a	receivable	position	at	December	31,	2015,	may	become	a	payable prior	to	maturity	based	on	their	cash	flow	profile	or	changes	in	market	conditions.

(f) Prior	period	amounts	have	been	revised	to	conform	with	current	period presentation.

# Wholesale	credit	exposure	–	industry	exposures

The	Firm	focuses	on	the	management	and	diversification	of	its	industry exposures,	paying	particular	attention	to	industries	with	actual	or	potential	credit concerns.	Exposures	deemed	criticized	align	with	the	U.S.	banking	regulators' definition	of	criticized	exposures,	which	consist

of	the	special	mention,	substandard	and	doubtful	categories.	The	total	criticized component	of	the	portfolio,	excluding	loans	held-for-sale	and	loans	at	fair	value, was	$14.6	billion	at	December	31,	2015,	compared	with	$10.1	billion	at December	31,	2014,	driven	by	downgrades	within	the	Oil	&	Gas	portfolio.

Effective	in	the	fourth	quarter	2015,	the	Firm	realigned	its	wholesale	industry	divisions	in	order	to	better	monitor	and	manage	industry	concentrations.	Included	in	this realignment	is	the	combination	of	certain	previous	stand-alone	industries	(e.g.	Consumer	&	Retail)	as	well	as	the	creation	of	a	new	industry	division,	Financial	Market Infrastructure,	consisting	of	clearing	houses,	exchanges	and	related	depositories.	In	the	tables	below,	the	prior	period	information	has	been	revised	to	conform	with	the current	period	presentation.

Below	are	summaries	of	the	Firm's	exposures	as	of	December	31,	2015	and	2014.	For	additional	information	on	industry	concentrations,	see	Note	5.

# Wholesale	credit	exposure	–	industries(a)

| As	of	or	for	the	year	ended<br>December	31,	2015<br>(in	millions) | Credit<br>exposure(d) | Investment-<br>grade | Noncriticized | Criticized<br>performing | Criticized<br>nonperforming | 30	days	or	more<br>past	due	and<br>accruing<br>loans | Net	charge-offs/<br>(recoveries) | Credit<br>derivative<br>hedges(e) | Liquid	securities<br>and	other	cash<br>collateral	held<br>against	derivative<br>receivables |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Real\tEstate | $116,857 | $88,076 | $27,087 | $1,463 | $231 | $208 | $(14) | $(54) | $(47) |
| Consumer\t&amp;\tRetail | 85,460 | 53,647 | 29,659 | 1,947 | 207 | 18 | 13 | (288) | (94) |
| Technology,\tMedia\t&amp;\nTelecommunications | 57,382 | 29,205 | 26,925 | 1,208 | 44 | 5 | (1) | (806) | (21) |
| Industrials | 54,386 | 36,519 | 16,663 | 1,164 | 40 | 59 | 8 | (386) | (39) |
| Healthcare | 46,053 | 37,858 | 7,755 | 394 | 46 | 129 | (7) | (24) | (245) |
| Banks\t&amp;\tFinance\tCos | 43,398 | 35,071 | 7,654 | 610 | 63 | 17 | (5) | (974) | (5,509) |
| Oil\t&amp;\tGas | 42,077 | 24,379 | 13,158 | 4,263 | 277 | 22 | 13 | (530) | (37) |
| Utilities | 30,853 | 24,983 | 5,655 | 168 | 47 | 3 | — | (190) | (289) |
| State\t&amp;\tMunicipal\tGovt(b) | 29,114 | 28,307 | 745 | 7 | 55 | 55 | (8) | (146) | (81) |
| Asset\tManagers | 23,815 | 20,214 | 3,570 | 31 | — | 18 | — | (6) | (4,453) |
| Transportation | 19,227 | 13,258 | 5,801 | 167 | 1 | 15 | 3 | (51) | (243) |
| Central\tGovt | 17,968 | 17,871 | 97 | — | — | 7 | — | (9,359) | (2,393) |
| Chemicals\t&amp;\tPlastics | 15,232 | 10,910 | 4,017 | 274 | 31 | 9 | — | (17) | — |
| Metals\t&amp;\tMining | 14,049 | 6,522 | 6,434 | 1,008 | 85 | 1 | — | (449) | (4) |
| Automotive | 13,864 | 9,182 | 4,580 | 101 | 1 | 4 | (2) | (487) | (1) |
| Insurance | 11,889 | 9,812 | 1,958 | 26 | 93 | 23 | — | (157) | (1,410) |
| Financial\tMarkets\tInfrastructure | 7,973 | 7,304 | 669 | — | — | — | — | — | (167) |
| Securities\tFirms | 4,412 | 1,505 | 2,907 | — | — | 3 | — | (102) | (256) |
| All\tother(c) | 149,117 | 130,488 | 18,095 | 370 | 164 | 1,015 | 10 | (6,655) | (1,291) |
| Subtotal | 783,126 | $585,111 | $183,429 | $13,201 | $1,385 | $1,611 | $10 | $(20,681) | $(16,580) |
| Loans\theld-for-sale\tand\tloans\tat\tfair\tvalue | 3,965 |  |  |  |  |  |  |  |  |
| Receivables\tfrom\tcustomers\tand\tinterests\tin\tpurchased\nreceivables | 13,372 |  |  |  |  |  |  |  |  |
| Total | $800,463 |  |  |  |  |  |  |  |  |

| As	of	or	for	the	year	ended<br>December	31,	2014<br>(in	millions) | Credit<br>exposure(e) | Investment-<br>grade | Noncriticized | Criticized<br>performing | Criticized<br>nonperforming | 30	days	or	more<br>past	due	and<br>accruing<br>loans | Net	charge-offs/<br>(recoveries) | Credit	derivative<br>hedges(f) | Liquid	securities<br>and	other	cash<br>collateral	held<br>against	derivative<br>receivables |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Real\tEstate | $105,975 | $78,996 | $25,370 | $1,356 | $253 | $309 | $(9) | $(36) | $(27) |
| Consumer\t&amp;\tRetail | 83,663 | 52,872 | 28,289 | 2,315 | 187 | 92 | 9 | (81) | (26) |
| Technology,\tMedia\t&amp;\nTelecommunications | 46,655 | 29,792 | 15,358 | 1,446 | 59 | 25 | (5) | (1,107) | (13) |
| Industrials | 47,859 | 29,246 | 17,483 | 1,117 | 13 | 58 | (1) | (338) | (24) |
| Healthcare | 56,516 | 48,402 | 7,584 | 488 | 42 | 193 | 16 | (94) | (244) |
| Banks\t&amp;\tFinance\tCos | 55,098 | 45,962 | 8,611 | 508 | 17 | 46 | (4) | (1,232) | (9,369) |
| Oil\t&amp;\tGas | 43,148 | 29,260 | 13,831 | 56 | 1 | 15 | 2 | (144) | (161) |
| Utilities | 27,441 | 23,533 | 3,653 | 255 | — | 198 | (3) | (155) | (193) |
| State\t&amp;\tMunicipal\tGovt(b) | 31,068 | 30,147 | 819 | 102 | — | 69 | 24 | (148) | (130) |
| Asset\tManagers | 27,488 | 24,054 | 3,376 | 57 | 1 | 38 | (12) | (9) | (4,545) |
| Transportation | 20,619 | 13,751 | 6,703 | 165 | — | 5 | (12) | (42) | (279) |
| Central\tGovt | 19,881 | 19,647 | 176 | 58 | — | — | — | (11,342) | (1,161) |
| Chemicals\t&amp;\tPlastics | 12,612 | 9,256 | 3,327 | 29 | — | 1 | (2) | (14) | — |
| Metals\t&amp;\tMining | 14,969 | 8,304 | 6,161 | 504 | — | — | 18 | (377) | (19) |
| Automotive | 12,754 | 8,071 | 4,522 | 161 | — | 1 | (1) | (140) | — |
| Insurance | 13,350 | 10,550 | 2,558 | 80 | 162 | — | — | (52) | (2,372) |
| Financial\tMarkets\tInfrastructure | 11,986 | 11,487 | 499 | — | — | — | — | — | (4) |
| Securities\tFirms | 4,801 | 2,491 | 2,245 | 10 | 55 | 20 | 4 | (102) | (212) |
| All\tother(c) | 134,475 | 118,639 | 15,214 | 435 | 187 | 1,231 | (12) | (11,290) | (825) |
| Subtotal | $770,358 | $594,460 | $165,779 | $9,142 | $977 | $2,301 | $12 | $(26,703) | $(19,604) |
| Loans\theld-for-sale\tand\tloans\tat\tfair\tvalue | 6,412 |  |  |  |  |  |  |  |  |
| Receivables\tfrom\tcustomers\tand\tinterests\tin\npurchased\treceivables | 28,972 |  |  |  |  |  |  |  |  |
| Total(d) | $805,742 |  |  |  |  |  |  |  |  |

(a) The	industry	rankings	presented	in	the	table	as	of	December	31,	2014,	are	based	on	the	industry	rankings	of	the	corresponding	exposures	at	 December	31,	2015,	not	actual	rankings	of	such exposures	at	December	31,	2014.

(b) In	addition	to	the	credit	risk	exposure	to	states	and	municipal	governments	(both	U.S.	and	non-U.S.)	at	 December	31,	2015	and	2014,	noted	above,	the	Firm	held:	$7.6	billion	and	$10.6	billion, respectively,	of	trading	securities;	$33.6	billion	and	$30.1	billion,	respectively,	of	available-for-sale	("AFS")	securities;	and	$12.8	billion	and	$10.2	billion,	respectively,	of	held-to-maturity ("HTM")	securities,	issued	by	U.S.	state	and	municipal	governments.	For	further	information,	see	Note	3	and	Note	12.

(c) All	other	includes:	individuals;	SPEs;	holding	companies;	and	private	education	and	civic	organizations,	representing	approximately	54%,	37%,	5%	and	4%,	respectively,	at December	31,	2015, and	55%,	33%,	6%	and	6%,	respectively,	at	December	31,	2014.

(d) Excludes	cash	placed	with	banks	of	$351.0	billion	and	$501.5	billion,	at	 December	31,	2015	and	2014,	respectively,	placed	with	various	central	banks,	predominantly	Federal	Reserve	Banks.

(e) Credit	exposure	is	net	of	risk	participations	and	excludes	the	benefit	of	"Credit	derivatives	used	in	credit	portfolio	management	activities"	held	against	derivative	receivables	or	loans	and	"Liquid securities	and	other	cash	collateral	held	against	derivative	receivables".

(f) Represents	the	net	notional	amounts	of	protection	purchased	and	sold	through	credit	derivatives	used	to	manage	the	credit	exposures;	these	derivatives	do	not	qualify	for	hedge	accounting	under U.S.	GAAP.	The	All	other	category	includes	purchased	credit	protection	on	certain	credit	indices.

Presented	below	is	a	discussion	of	certain	industries	to	which	the	Firm	has significant	exposure	and/or	present	actual	or	potential	credit	concerns.	For additional	information,	refer	to	the	tables	on	the	previous	pages.

•Real	Estate:	Exposure	to	this	industry	increased	by	$10.9	billion,	or	10%,	in 2015	to	$116.9	billion.	The	increase	was	largely	driven	by	growth	in multifamily	exposure	in	Commercial	Banking.	The	credit	quality	of	this industry	remained	stable	as	the	investment-grade	portion	of	the	exposures was	75%	for	2015	and	2014.	The	ratio	of	nonaccrual	retained	loans	to	total retained	loans	decreased	to	0.25%	at	December	31,	2015	from	0.32%	at December	31,	2014.	For	further	information	on	commercial	real	estate	loans, see	Note	14.

•Oil	&	Gas:	Exposure	to	the	Oil	&	Gas	industry	was	approximately	5.3%	and 5.4%	of	the	Firm's	total	wholesale	exposure	as	of	December	31,	2015	and 2014,	respectively.	Exposure	to	this	industry	decreased	by	$1.1	billion	in 2015	to	$42.1	billion;	of	the	$42.1	billion,	$13.3	billion	was	drawn	at	year- end.	As	of	December	31,	2015,	approximately	$24	billion	of	the	exposure was	investment-grade,	of	which	$4	billion	was	drawn,	and	approximately	$18 billion	of	the	exposure	was	high	yield,	of	which	$9	billion	was	drawn.	As	of December	31,	2015,	$23.5	billion	of	the	portfolio	was	concentrated	in	the Exploration	&	Production	and	Oilfield	Services	sub-sectors,	36%	of	which exposure	was	drawn.	Exposure	to	other	sub-sectors,	including	Integrated	oil and	gas	firms,	Midstream/Oil	Pipeline	companies,	and	Refineries,	is predominantly	investment-grade.	As	of	December	31,	2015,	secured	lending, which	largely	consists	of	reserve-based	lending	to	the	Oil	&	Gas	industry, was	$12.3	billion,	44%	of	which	exposure	was	drawn.

In	addition	to	$42.1	billion	in	exposure	classified	as	Oil	&	Gas,	the	Firm	had $4.3	billion	in	exposure	to	Natural	Gas	Pipelines	and	related	Distribution businesses,	of	which	$893	million	was	drawn	at	year	end	and	63%	was investment-grade,	and	$4.1	billion	in	exposure	to	commercial	real	estate	in geographies	sensitive	to	the	Oil	&	Gas	industry.

The	Firm	continues	to	actively	monitor	and	manage	its	exposure	to	the	Oil	& Gas	industry	in	light	of	market	conditions,	and	is	also	actively	monitoring potential	contagion	effects	on	other	related	or	dependent	industries.

•Metals	&	Mining:	Exposure	to	the	Metals	&	Mining	industry	was approximately	1.8%	and	1.9%	of	the	Firm's	total	wholesale	exposure	as	of December	31,	2015	and	2014,	respectively.	Exposure	to	the	Metals	&	Mining industry	decreased	by	$920	million	in	2015	to	$14.0	billion,	of	which	$4.6 billion	was	drawn.	The	portfolio	largely	consists	of	exposure	in	North America,	and	59%	is	concentrated	in	the	Steel	and	Diversified	Mining	sub- sectors.	Approximately	46%	of	the	exposure	in	the	Metals	&	Mining portfolio	was	investment-grade	as	of	December	31,	2015,	a	decrease	from 55%	as	of	December	31,	2014,	due	to	downgrades.

# Loans

In	the	normal	course	of	its	wholesale	business,	the	Firm	provides	loans	to	a variety	of	customers,	ranging	from	large	corporate	and	institutional	clients	to high-net-worth	individuals.	The	Firm	actively	manages	its	wholesale	credit exposure.	One	way	of	managing	credit	risk	is	through	secondary	market	sales	of loans	and	lending-related	commitments.	For	further	discussion	on	loans, including	information	on	credit	quality	indicators	and	sales	of	loans,	see	Note	14.

The	following	table	presents	the	change	in	the	nonaccrual	loan	portfolio	for	the years	ended	December	31,	2015	and	2014.

# Wholesale	nonaccrual	loan	activity

| Year	ended	December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Beginning\tbalance | $624 | $1,044 |
| Additions | 1,307 | 882 |
| Reductions: |  |  |
| Paydowns\tand\tother | 534 | 756 |
| Gross\tcharge-offs | 87 | 148 |
| Returned\tto\tperforming\tstatus | 286 | 303 |
| Sales | 8 | 95 |
| Total\treductions | 915 | 1,302 |
| Net\tchanges | 392 | (420) |
| Ending\tbalance | $1,016 | $624 |

The	following	table	presents	net	charge-offs,	which	are	defined	as	gross	charge- offs	less	recoveries,	for	the	years	ended	December	31,	2015	and	2014.	The amounts	in	the	table	below	do	not	include	gains	or	losses	from	sales	of nonaccrual	loans.

# Wholesale	net	charge-offs

| (in	millions,	except	ratios) | 2015 | 2014 |
| :--- | :--- | :--- |
| Loans\t–\treported |  |  |
| Average\tloans\tretained | $337,407 | $316,060 |
| Gross\tcharge-offs | 95 | 151 |
| Gross\trecoveries | (85) | (139) |
| Net\tcharge-offs | 10 | 12 |
| Net\tcharge-off\trate | —% | —% |

# Receivables	from	customers

Receivables	from	customers	primarily	represent	margin	loans	to	prime	and	retail brokerage	clients	that	are	collateralized	through	a	pledge	of	assets	maintained	in clients'	brokerage	accounts	which	are	subject	to	daily	minimum	collateral requirements.	In	the	event	that	the	collateral	value	decreases,	a	maintenance margin	call	is	made	to	the	client	to	provide	additional	collateral	into	the	account. If	additional	collateral	is	not	provided	by	the	client,	the	client's	position	may	be liquidated	by	the	Firm	to	meet	the	minimum	collateral	requirements.

# Lending-related	commitments

The	Firm	uses	lending-related	financial	instruments,	such	as	commitments (including	revolving	credit	facilities)	and	guarantees,	to	meet	the	financing	needs of	its	customers.	The	contractual	amounts	of	these	financial	instruments represent	the	maximum	possible	credit	risk	should	the	counterparties	draw	down on	these	commitments	or	the	Firm	fulfills	its	obligations	under	these	guarantees, and	the	counterparties	subsequently	fail	to	perform	according	to	the	terms	of these	contracts.

In	the	Firm's	view,	the	total	contractual	amount	of	these	wholesale	lending- related	commitments	is	not	representative	of	the	Firm's	likely	actual	future	credit exposure	or	funding	requirements.	In	determining	the	amount	of	credit	risk exposure	the	Firm	has	to	wholesale	lending-related	commitments,	which	is	used as	the	basis	for	allocating	credit	risk	capital	to	these	commitments,	the	Firm	has established	a	"loan-equivalent"	amount	for	each	commitment;	this	amount represents	the	portion	of	the	unused	commitment	or	other	contingent	exposure that	is	expected,	based	on	average	portfolio	historical	experience,	to	become drawn	upon	in	an	event	of	a	default	by	an	obligor.	The	loan-equivalent	amount	of the	Firm's	lending-related	commitments	was	$212.4	billion	and	$216.5	billion	as of	December	31,	2015	and	2014,	respectively.

# Clearing	services

The	Firm	provides	clearing	services	for	clients	entering	into	securities	and derivative	transactions.	Through	the	provision	of	these	services	the	Firm	is exposed	to	the	risk	of	non-performance	by	its	clients	and	may	be	required	to share	in	losses	incurred	by	central	counterparties	("CCPs").	Where	possible,	the Firm	seeks	to	mitigate	its	credit	risk	to	its	clients	through	the	collection	of adequate	margin	at	inception	and	throughout	the	life	of	the	transactions	and	can also	cease	provision	of	clearing	services	if	clients	do	not	adhere	to	their obligations	under	the	clearing	agreement.	For	further	discussion	of	Clearing services,	see	Note	29.

# Derivative	contracts

In	the	normal	course	of	business,	the	Firm	uses	derivative	instruments predominantly	for	market-making	activities.	Derivatives	enable	customers	to manage	exposures	to	fluctuations	in	interest	rates,	currencies	and	other	markets. The	Firm	also	uses	derivative	instruments	to	manage	its	own	credit	and	other market	risk	exposure.	The	nature	of	the	counterparty	and	the	settlement mechanism	of	the	derivative	affect	the	credit	risk	to	which	the	Firm	is	exposed. For	OTC	derivatives	the	Firm	is	exposed	to	the	credit	risk	of	the	derivative counterparty.	For	exchange-traded	derivatives	("ETD"),	such	as	futures	and options	and	"cleared"	over-the-counter	("OTC-cleared")	derivatives,	the	Firm	is generally	exposed	to	the	credit	risk	of	the	relevant	CCP.	Where	possible,	the Firm	seeks	to	mitigate	its	credit	risk	exposures	arising	from	derivative transactions	through	the	use	of	legally	enforceable	master	netting	arrangements and	collateral	agreements.	For	further	discussion	of	derivative	contracts, counterparties	and	settlement	types,	see	Note	6.

The	following	table	summarizes	the	net	derivative	receivables	for	the	periods presented.

# Derivative	receivables

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Interest\trate | $26,363 | $33,725 |
| Credit\tderivatives | 1,423 | 1,838 |
| Foreign\texchange | 17,177 | 21,253 |
| Equity | 5,529 | 8,177 |
| Commodity | 9,185 | 13,982 |
| Total,\tnet\tof\tcash\tcollateral | 59,677 | 78,975 |
| Liquid\tsecurities\tand\tother\tcash\tcollateral\theld\nagainst\tderivative\treceivables | (16,580) | (19,604) |
| Total,\tnet\tof\tall\tcollateral | $43,097 | $59,371 |

Derivative	receivables	reported	on	the	Consolidated	balance	sheets	were	$59.7 billion	and	$79.0	billion	at	December	31,	2015	and	2014,	respectively.	These amounts	represent	the	fair	value	of	the	derivative	contracts,	after	giving	effect	to legally	enforceable	master	netting	agreements	and	cash	collateral	held	by	the Firm.	However,	in	management's	view,	the	appropriate	measure	of	current	credit risk	should	also	take	into	consideration	additional	liquid	securities	(primarily U.S.	government	and	agency	securities	and	other	group	of	seven	nations	("G7") government	bonds)	and	other	cash	collateral	held	by	the	Firm	aggregating	$16.6 billion	and	$19.6	billion	at	December	31,	2015	and	2014,	respectively,	that	may be	used	as	security	when	the	fair	value	of	the	client's	exposure	is	in	the	Firm's favor.	The	decrease	in	derivative	receivables	was	predominantly	driven	by declines	in	interest	rate	derivatives,	commodity	derivatives,	foreign	exchange derivatives	and	equity	derivatives	due	to	market	movements,	maturities	and settlements	related	to	client-driven	market-making	activities	in	CIB.

In	addition	to	the	collateral	described	in	the	preceding	paragraph,	the	Firm	also holds	additional	collateral	(primarily	cash;	G7	government	securities;	other liquid	government-agency	and	guaranteed	securities;	and	corporate	debt	and equity	securities)	delivered	by	clients	at	the	initiation	of	transactions,	as	well	as collateral	related	to	contracts	that	have	a	non-daily	call	frequency	and	collateral that	the	Firm	has	agreed	to	return	but	has	not	yet	settled	as	of	the	reporting	date. Although	this	collateral	does	not	reduce	the	balances	and	is	not	included	in	the table	above,	it	is	available	as	security	against	potential	exposure	that	could	arise should	the	fair	value	of	the	client's	derivative	transactions	move	in	the	Firm's favor.	As	of	December	31,	2015	and	2014,	the	Firm	held	$43.7	billion	and	$48.6 billion,	respectively,	of	this	additional	collateral.	The	derivative	receivables	fair value,	net	of	all	collateral,	also	does	not	include	other	credit	enhancements,	such as	letters	of	credit.	For	additional	information	on	the	Firm's	use	of	collateral agreements,	see	Note	6.

While	useful	as	a	current	view	of	credit	exposure,	the	net	fair	value	of	the derivative	receivables	does	not	capture	the	potential	future	variability	of	that credit	exposure.	To	capture	the	potential	future	variability	of	credit	exposure,	the Firm	calculates,	on	a	client-by-client	basis,	three	measures	of	potential derivatives-related	credit	loss:	Peak,	Derivative	Risk	Equivalent	("DRE"),	and Average	exposure	("AVG").	These	measures	all	incorporate	netting	and collateral	benefits,	where	applicable.

Peak	represents	a	conservative	measure	of	potential	exposure	to	a	counterparty calculated	in	a	manner	that	is	broadly	equivalent	to	a	97.5%	confidence	level. Peak	is	the	primary	measure	used	by	the	Firm	for	setting	of	credit	limits	for derivative	transactions,	senior	management	reporting	and	derivatives	exposure management.	DRE	exposure	is	a	measure	that	expresses	the	risk	of	derivative exposure	on	a	basis	intended	to	be	equivalent	to	the	risk	of	loan	exposures.	DRE is	a	less	extreme	measure	of	potential	credit	loss	than	Peak	and	is	used	for aggregating	derivative	credit	risk	exposures	with	loans	and	other	credit	risk. Finally,	AVG	is	a	measure	of	the	expected	fair	value	of	the	Firm's	derivative receivables	at	future	time	periods,	including	the	benefit	of	collateral.	AVG exposure	over	the	total	life	of	the	derivative	contract	is	used	as	the	primary metric	for	pricing	purposes	and	is	used	to	calculate	credit	capital	and	the	CVA,	as further	described	below.	The	three	year	AVG	exposure	was	$32.4	billion	and $37.5	billion	at	December	31,	2015	and	2014,	respectively,	compared	with derivative	receivables,	net	of	all	collateral,	of	$43.1	billion	and	$59.4	billion	at December	31,	2015	and	2014,	respectively.

The	fair	value	of	the	Firm's	derivative	receivables	incorporates	an	adjustment, the	CVA,	to	reflect	the	credit	quality	of	counterparties.	The	CVA	is	based	on	the Firm's	AVG	to	a	counterparty	and	the	counterparty's	credit	spread	in	the	credit derivatives	market.	The	primary	components	of	changes	in	CVA	are	credit spreads,	new	deal	activity	or	unwinds,	and	changes	in	the	underlying	market environment.	The	Firm	believes	that	active	risk	management	is	essential	to controlling	the	dynamic	credit	risk	in	the	derivatives	portfolio.	In	addition,	the Firm's	risk	management	process	takes	into	consideration	the	potential	impact	of wrong-way	risk,	which	is	broadly	defined	as	the	potential	for	increased correlation	between	the	Firm's	exposure	to	a	counterparty	(AVG)	and	the counterparty's	credit	quality.	Many	factors	may	influence	the	nature	and magnitude	of	these	correlations	over	time.	To	the	extent	that	these	correlations are	identified,	the	Firm	may	adjust	the	CVA	associated	with	that	counterparty's AVG.	The	Firm	risk	manages	exposure	to	changes	in	CVA	by	entering	into credit	derivative	transactions,	as	well	as	interest	rate,	foreign	exchange,	equity and	commodity	derivative	transactions.

The	accompanying	graph	shows	exposure	profiles	to	the	Firm's	current derivatives	portfolio	over	the	next	10	years	as	calculated	by	the	Peak,	DRE	and AVG	metrics.	The	three	measures	generally	show	that	exposure	will	decline after	the	first	year,	if	no	new	trades	are	added	to	the	portfolio.

# Exposure	profile	of	derivatives	measures

(in	billions)

The	following	table	summarizes	the	ratings	profile	by	derivative	counterparty	of	the	Firm's	derivative	receivables,	including	credit	derivatives,	net	of	other	liquid securities	collateral,	at	the	dates	indicated.	The	ratings	scale	is	based	on	the	Firm's	internal	ratings,	which	generally	correspond	to	the	ratings	as	defined	by	S&P	and Moody's.

# Ratings	profile	of	derivative	receivables

| Rating	equivalent |  | 2015 |  | 2014(a) |
| :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions,\texcept\tratios) | Exposure\tnet\tof\tall\ncollateral | %\tof\texposure\tnet\nof\tall\tcollateral | Exposure\tnet\tof\tall\ncollateral | %\tof\texposure\tnet\nof\tall\tcollateral |
| AAA/Aaa\tto\tAA-/Aa3 | $10,371 | 24% | $18,713 | 32% |
| A+/A1\tto\tA-/A3 | 10,595 | 25 | 13,508 | 23 |
| BBB+/Baa1\tto\tBBB-/Baa3 | 13,807 | 32 | 18,594 | 31 |
| BB+/Ba1\tto\tB-/B3 | 7,500 | 17 | 7,735 | 13 |
| CCC+/Caa1\tand\tbelow | 824 | 2 | 821 | 1 |
| Total | $43,097 | 100% | $59,371 | 100% |

(a) Prior	period	amounts	have	been	revised	to	conform	with	current	period	presentation.

As	previously	noted,	the	Firm	uses	collateral	agreements	to	mitigate	counterparty credit	risk.	The	percentage	of	the	Firm's	derivatives	transactions	subject	to collateral	agreements	—	excluding	foreign	exchange	spot	trades,	which	are	not typically	covered	by	collateral	agreements	due	to	their	short	maturity	—	was	87% as	of	December	31,	2015,	largely	unchanged	compared	with	88%	as	of December	31,	2014.

The	Firm	uses	credit	derivatives	for	two	primary	purposes:	first,	in	its	capacity	as a	market-maker,	and	second,	as	an	end-user	to	manage	the	Firm's	own	credit risk	associated	with	various	exposures.	For	a	detailed	description	of	credit derivatives,	see	Credit	derivatives	in	Note	6.

# Credit	portfolio	management	activities

Included	in	the	Firm's	end-user	activities	are	credit	derivatives	used	to	mitigate the	credit	risk	associated	with	traditional	lending	activities	(loans	and	unfunded commitments)	and	derivatives	counterparty	exposure	in	the	Firm's	wholesale businesses	(collectively,	"credit	portfolio	management"	activities).	Information on	credit	portfolio	management	activities	is	provided	in	the	table	below.	For further	information	on	derivatives	used	in	credit	portfolio	management	activities, see	Credit	derivatives	in	Note	6.

The	Firm	also	uses	credit	derivatives	as	an	end-user	to	manage	other	exposures, including	credit	risk	arising	from	certain	securities	held	in	the	Firm's	market- making	businesses.	These	credit	derivatives	are	not	included	in	credit	portfolio management	activities;	for	further	information	on	these	credit	derivatives	as	well as	credit	derivatives	used	in	the	Firm's	capacity	as	a	market-maker	in	credit derivatives,	see	Credit	derivatives	in	Note	6.

# Credit	derivatives	used	in	credit	portfolio	management	activities

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Credit\tderivatives\tused\tto\tmanage: |  |  |
| Loans\tand\tlending-related\tcommitments | $2,289 | $2,047 |
| Derivative\treceivables | 18,392 | 24,656 |
| Credit\tderivatives\tused\tin\tcredit\tportfolio\nmanagement\tactivities | $20,681 | $26,703 |

(a) Amounts	are	presented	net,	considering	the	Firm's	net	protection	purchased	or	sold	with respect	to	each	underlying	reference	entity	or	index.

The	credit	derivatives	used	in	credit	portfolio	management	activities	do	not qualify	for	hedge	accounting	under	U.S.	GAAP;	these	derivatives	are	reported	at fair	value,	with	gains	and	losses	recognized	in	principal	transactions	revenue.	In contrast,	the	loans	and	lending-related	commitments	being	risk-managed	are accounted	for	on	an	accrual	basis.	This	asymmetry	in	accounting	treatment, between	loans	and	lending-related	commitments	and	the	credit	derivatives	used in	credit	portfolio	management	activities,	causes	earnings	volatility	that	is	not representative,	in	the	Firm's	view,	of	the	true	changes	in	value	of	the	Firm's overall	credit	exposure.

The	effectiveness	of	the	Firm's	credit	default	swap	("CDS")	protection	as	a hedge	of	the	Firm's	exposures	may	vary	depending	on	a	number	of	factors, including	the	named	reference	entity	(i.e.,	the	Firm	may	experience	losses	on specific	exposures	that	are	different	than	the	named	reference	entities	in	the purchased	CDS);	the	contractual	terms	of	the	CDS	(which	may	have	a	defined credit	event	that	does	not	align	with	an	actual	loss	realized	by	the	Firm);	and	the maturity	of	the	Firm's	CDS	protection	(which	in	some	cases	may	be	shorter	than the	Firm's	exposures).	However,	the	Firm	generally	seeks	to	purchase	credit protection	with	a	maturity	date	that	is	the	same	or	similar	to	the	maturity	date	of the	exposure	for	which	the	protection	was	purchased,	and	remaining	differences in	maturity	are	actively	monitored	and	managed	by	the	Firm.

# ALLOWANCE	FOR	CREDIT	LOSSES

JPMorgan	Chase's	allowance	for	loan	losses	covers	both	the	consumer	(primarily scored)	portfolio	and	wholesale	(risk-rated)	portfolio.	The	allowance	represents management's	estimate	of	probable	credit	losses	inherent	in	the	Firm's	loan portfolio.	Management	also	determines	an	allowance	for	wholesale	and	certain consumer	lending-related	commitments.

For	a	further	discussion	of	the	components	of	the	allowance	for	credit	losses	and related	management	judgments,	see	Critical	Accounting	Estimates	Used	by	the Firm	on	pages	165–169	and	Note	15.

At	least	quarterly,	the	allowance	for	credit	losses	is	reviewed	by	the	Chief	Risk Officer,	the	Chief	Financial	Officer	and	the	Controller	of	the	Firm,	and	discussed with	the	DRPC	and	Audit	Committee	of	the	Firm's	Board	of	Directors.	As	of December	31,	2015,	JPMorgan	Chase	deemed	the	allowance	for	credit	losses	to be	appropriate	and	sufficient	to	absorb	probable	credit	losses	inherent	in	the portfolio.

The	consumer,	excluding	credit	card,	allowance	for	loan	losses	decreased	from December	31,	2014,	due	to	a	reduction	in	the	residential	real	estate	portfolio allowance,	reflecting	continued	improvement	in	home	prices	and	delinquencies and	increased	granularity	in	the	impairment	estimates.	For	additional	information about	delinquencies	and	nonaccrual	loans	in	the	consumer,	excluding	credit	card, loan	portfolio,	see	Consumer	Credit	Portfolio	on	pages	115–121	and	Note	14.

The	credit	card	allowance	for	loan	losses	was	relatively	unchanged	from December	31,	2014,	reflecting	stable	credit	quality	trends.	For	additional information	about	delinquencies	in	the	credit	card	loan	portfolio,	see	Consumer Credit	Portfolio	on	pages	115–121	and	Note	14.

The	wholesale	allowance	for	credit	losses	increased	from	December	31,	2014, reflecting	the	impact	of	downgrades	in	the	Oil	&	Gas	portfolio.	Excluding	Oil and	Gas,	the	wholesale	portfolio	continued	to	experience	generally	stable	credit quality	trends	and	low	charge-off	rates.

# Summary	of	changes	in	the	allowance	for	credit	losses

|  |  | 2015 |  |  |  | 2014 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\n(in\tmillions,\texcept\tratios) | Consumer,\nexcluding\ncredit\tcard | Credit\tcard | Wholesale | Total | Consumer,\nexcluding\ncredit\tcard | Credit\tcard | Wholesale | Total |
| Allowance\tfor\tloan\tlosses |  |  |  |  |  |  |  |  |
| Beginning\tbalance\tat\tJanuary\t1, | $7,050 | $3,439 | $3,696 | $14,185 | $8,456 | $3,795 | $4,013 | $16,264 |
| Gross\tcharge-offs | 1,658 | 3,488 | 95 | 5,241 | 2,132 | 3,831 | 151 | 6,114 |
| Gross\trecoveries | (704) | (366) | (85) | (1,155) | (814) | (402) | (139) | (1,355) |
| Net\tcharge-offs | 954 | 3,122 | 10 | 4,086 | 1,318 | 3,429 | 12 | 4,759 |
| Write-offs\tof\tPCI\tloans (a) | 208 | — | — | 208 | 533 | — | — | 533 |
| Provision\tfor\tloan\tlosses | (82) | 3,122 | 623 | 3,663 | 414 | 3,079 | (269) | 3,224 |
| Other | — | (5) | 6 | 1 | 31 | (6) | (36) | (11) |
| Ending\tbalance\tat\tDecember\t31, | $5,806 | $3,434 | $4,315 | $13,555 | $7,050 | $3,439 | $3,696 | $14,185 |
| Impairment\tmethodology |  |  |  |  |  |  |  |  |
| Asset-specific(b) | $364 | $460 | $274 | $1,098 | $539 | $500 | $87 | $1,126 |
| Formula-based | 2,700 | 2,974 | 4,041 | 9,715 | 3,186 | 2,939 | 3,609 | 9,734 |
| PCI | 2,742 | — | — | 2,742 | 3,325 | — | — | 3,325 |
| Total\tallowance\tfor\tloan\tlosses | $5,806 | $3,434 | $4,315 | $13,555 | $7,050 | $3,439 | $3,696 | $14,185 |
| Allowance\tfor\tlending-related\tcommitments |  |  |  |  |  |  |  |  |
| Beginning\tbalance\tat\tJanuary\t1, | $13 | $— | $609 | $622 | $8 | $— | $697 | $705 |
| Provision\tfor\tlending-related\tcommitments | 1 | — | 163 | 164 | 5 | — | (90) | (85) |
| Other | — | — | — | — | — | — | 2 | 2 |
| Ending\tbalance\tat\tDecember\t31, | $14 | $— | $772 | $786 | $13 | $— | $609 | $622 |
| Impairment\tmethodology |  |  |  |  |  |  |  |  |
| Asset-specific | $— | $— | $73 | $73 | $— | $— | $60 | $60 |
| Formula-based | 14 | — | 699 | 713 | 13 | — | 549 | 562 |
| Total\tallowance\tfor\tlending-related\tcommitments^(c) | $14 | $— | $772 | $786 | $13 | $— | $609 | $622 |
| Total\tallowance\tfor\tcredit\tlosses | $5,820 | $3,434 | $5,087 | $14,341 | $7,063 | $3,439 | $4,305 | $14,807 |
| Memo: |  |  |  |  |  |  |  |  |
| Retained\tloans,\tend\tof\tperiod | $344,355 | $131,387 | $357,050 | $832,792 | $294,979 | $128,027 | $324,502 | $747,508 |
| Retained\tloans,\taverage | 318,612 | 124,274 | 337,407 | 780,293 | 289,212 | 124,604 | 316,060 | 729,876 |
| PCI\tloans,\tend\tof\tperiod | 40,998 | — | 4 | 41,002 | 46,696 | — | 4 | 46,700 |
| Credit\tratios |  |  |  |  |  |  |  |  |
| Allowance\tfor\tloan\tlosses\tto\tretained\tloans | 1.69% | 2.61% | 1.21% | 1.63% | 2.39% | 2.69% | 1.14% | 1.90% |
| (d)\nAllowance\tfor\tloan\tlosses\tto\tretained\tnonaccrual\tloans | 109 | NM | 437 | 215 | 110 | NM | 617 | 202 |
| Allowance\tfor\tloan\tlosses\tto\tretained\tnonaccrual\tloans\nexcluding\tcredit\tcard | 109 | NM | 437 | 161 | 110 | NM | 617 | 153 |
| Net\tcharge-off\trates | 0.30 | 2.51 | — | 0.52 | 0.46 | 2.75 | — | 0.65 |
| Credit\tratios,\texcluding\tresidential\treal\testate\tPCI\nloans |  |  |  |  |  |  |  |  |
| Allowance\tfor\tloan\tlosses\tto\nretained\tloans | 1.01 | 2.61 | 1.21 | 1.37 | 1.50 | 2.69 | 1.14 | 1.55 |
| Allowance\tfor\tloan\tlosses\tto\nretained\tnonaccrual\tloans(d) | 58 | NM | 437 | 172 | 58 | NM | 617 | 155 |
| Allowance\tfor\tloan\tlosses\tto\nretained\tnonaccrual\tloans\texcluding\tcredit\tcard | 58 | NM | 437 | 117 | 58 | NM | 617 | 106 |
| Net\tcharge-off\trates | 0.35% | 2.51% | —% | 0.55% | 0.55% | 2.75% | —% | 0.70% |

Note:In	the	table	above,	the	financial	measures	which	exclude	the	impact	of	PCI	loans	are	non-GAAP	financial	measures.	For	additional	information,	see	Explanation	and	Reconciliation	of	the	Firm's Use	of	Non-GAAP	Financial	Measures	on	pages	80–82.

(a) Write-offs	of	PCI	loans	are	recorded	against	the	allowance	for	loan	losses	when	actual	losses	for	a	pool	exceed	estimated	losses	that	were	recorded	as	purchase	accounting	adjustments	at	the	time of	acquisition.	A	write-off	of	a	PCI	loan	is	recognized	when	the	underlying	loan	is	removed	from	a	pool	(e.g.,	upon	liquidation).	During	the	fourth	quarter	of	2014,	the	Firm	recorded	a	$291 million	adjustment	to	reduce	the	PCI	allowance	and	the	recorded	investment	in	the	Firm's	PCI	loan	portfolio,	primarily	reflecting	the	cumulative	effect	of	interest	forgiveness	modifications.	This adjustment	had	no	impact	to	the	Firm's	Consolidated	statements	of	income.

(b) Includes	risk-rated	loans	that	have	been	placed	on	nonaccrual	status	and	loans	that	have	been	modified	in	a	TDR.	The	asset-specific	credit	card	allowance	for	loan	losses	modified	in	a	TDR	is calculated	based	on	the	loans'	original	contractual	interest	rates	and	does	not	consider	any	incremental	penalty	rates.

(c) The	allowance	for	lending-related	commitments	is	reported	in	other	liabilities	on	the	Consolidated	balance	sheets.

(d) The	Firm's	policy	is	generally	to	exempt	credit	card	loans	from	being	placed	on	nonaccrual	status	as	permitted	by	regulatory	guidance.

For	the	year	ended	December	31,	2015,	the	provision	for	credit	losses	was	$3.8 billion,	compared	with	$3.1	billion	for	the	year	ended	December	31,	2014.

The	wholesale	provision	for	credit	losses	for	the	year	ended	December	31,	2015 reflected	the	impact	of	downgrades	in	the	Oil	&	Gas	portfolio.

The	total	consumer	provision	for	credit	losses	for	the	year	ended	December	31, 2015	reflected	lower	net	charge-offs	due	to	continued	discipline	in	credit underwriting	as	well	as	improvement	in	the	economy	driven	by	increasing	home prices	and	lower	unemployment,	partially	offset	by	a	lower	reduction	in	the allowance	for	loan	loss	compared	with	December	31,	2014.

| Year	ended	December	31, | Provision	for	loan	losses | Provision	for	loan	losses | Provision	for	loan	losses | lending-related	commitments | Provision	for |  | Total	provision	for	credit	losses | Total	provision	for	credit	losses | Total	provision	for	credit	losses |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 |
| Consumer,\texcluding\tcredit\tcard | $(82) | $414 | $(1,872) | $1 | $5 | $1 | $(81) | $419 | $(1,871) |
| Credit\tcard | 3,122 | 3,079 | 2,179 | — | — | — | 3,122 | 3,079 | 2,179 |
| Total\tconsumer | 3,040 | 3,493 | 307 | 1 | 5 | 1 | 3,041 | 3,498 | 308 |
| Wholesale | 623 | (269) | (119) | 163 | (90) | 36 | 786 | (359) | (83) |
| Total | $3,663 | $3,224 | $188 | $164 | $(85) | $37 | $3,827 | $3,139 | $225 |

# MARKET	RISK	MANAGEMENT

Market	risk	is	the	potential	for	adverse	changes	in	the	value	of	the	Firm's	assets and	liabilities	resulting	from	changes	in	market	variables	such	as	interest	rates, foreign	exchange	rates,	equity	prices,	commodity	prices,	implied	volatilities	or credit	spreads.

Market	Risk	management,	part	of	the	independent	risk	management	function,	is responsible	for	identifying	and	monitoring	market	risks	throughout	the	Firm	and defines	market	risk	policies	and	procedures.	The	Market	Risk	function	reports	to the	Firm's	CRO.

Market	Risk	seeks	to	control	risk,	facilitate	efficient	risk/return	decisions,	reduce volatility	in	operating	performance	and	provide	transparency	into	the	Firm's market	risk	profile	for	senior	management,	the	Board	of	Directors	and	regulators. Market	Risk	is	responsible	for	the	following	functions:

•Establishment	of	a	market	risk	policy framework

•Independent	measurement,	monitoring	and	control	of	line	of	business	and firmwide	market	risk

•Definition,	approval	and	monitoring	of limits

•Performance	of	stress	testing	and	qualitative	risk assessments

# Risk	identification	and	classification

Each	line	of	business	is	responsible	for	the	management	of	the	market	risks within	its	units.	The	independent	risk	management	group	responsible	for overseeing	each	line	of	business	is	charged	with	ensuring	that	all	material	market risks	are	appropriately	identified,	measured,	monitored	and	managed	in accordance	with	the	risk	policy	framework	set	out	by	Market	Risk.

# Tools	used	to	measure	risk

Because	no	single	measure	can	reflect	all	aspects	of	market	risk,	the	Firm	uses various	metrics,	both	statistical	and	nonstatistical,	including: •VaR •Economic-value	stress	testing •Nonstatistical	risk measures •Loss	advisories •Profit	and	loss	drawdowns •Earnings-at-risk

# Risk	monitoring	and	control

Market	risk	is	controlled	primarily	through	a	series	of	limits	set	in	the	context	of the	market	environment	and	business	strategy.	In	setting	limits,	the	Firm	takes into	consideration	factors	such	as	market	volatility,	product	liquidity	and accommodation	of	client	business	and	management	experience.	The	Firm maintains	different	levels	of	limits.	Corporate	level	limits	include	VaR	and	stress limits.	Similarly,	line	of	business	limits	include	VaR	and	stress	limits	and	may be	supplemented	by	loss	advisories,	nonstatistical	measurements	and	profit	and loss	drawdowns.	Limits	may	also	be	set	within	the	lines	of	business,	as	well	at the	portfolio	or	legal	entity	level.

Limits	are	set	by	Market	Risk	and	are	regularly	reviewed	and	updated	as appropriate,	with	any	changes	approved	by	line	of	business	management	and Market	Risk.	Senior	management,	including	the	Firm's	CEO	and	CRO,	are responsible	for	reviewing	and	approving	certain	of	these	risk	limits	on	an ongoing	basis.	All	limits	that	have	not	been	reviewed	within	specified	time periods	by	Market	Risk	are	escalated	to	senior	management.	The	lines	of business	are	responsible	for	adhering	to	established	limits	against	which exposures	are	monitored	and	reported.

Limit	breaches	are	required	to	be	reported	in	a	timely	manner	to	limit	approvers, Market	Risk	and	senior	management.	In	the	event	of	a	breach,	Market	Risk consults	with	Firm	senior	management	and	the	line	of	business	senior management	to	determine	the	appropriate	course	of	action	required	to	return	to compliance,	which	may	include	a	reduction	in	risk	in	order	to	remedy	the	breach. Certain	Firm	or	line	of	business-level	limits	that	have	been	breached	for	three business	days	or	longer,	or	by	more	than	30%,	are	escalated	to	senior management	and	the	Firmwide	Risk	Committee.

The	following	table	summarizes	by	LOB	the	predominant	business	activities	that	give	rise	to	market	risk,	and	the	market	risk	management	tools	utilized	to	manage	those risks;	CB	is	not	presented	in	the	table	below	as	it	does	not	give	rise	to	significant	market	risk.

# 	Risk	identification	and	classification	for	business	activities

(a) Market	risk	measurement	for	derivatives	generally	incorporates	the	impact	of	DVA	and	FVA;	market	risk	measurement	for	structured	notes	generally	excludes	the	impact	of	FVA	and	DVA.

# Value-at-risk

JPMorgan	Chase	utilizes	VaR,	a	statistical	risk	measure,	to	estimate	the	potential loss	from	adverse	market	moves	in	a	normal	market	environment.	The	Firm	has	a single	VaR	framework	used	as	a	basis	for	calculating	Risk	Management	VaR	and Regulatory	VaR.

The	framework	is	employed	across	the	Firm	using	historical	simulation	based	on data	for	the	previous	12	months.	The	framework's	approach	assumes	that historical	changes	in	market	values	are	representative	of	the	distribution	of potential	outcomes	in	the	immediate	future.	The	Firm	believes	the	use	of	Risk Management	VaR	provides	a	stable	measure	of	VaR	that	closely	aligns	to	the day-to-day	risk	management	decisions	made	by	the	lines	of	business,	and provides	the	necessary	and	appropriate	information	needed	to	respond	to	risk events	on	a	daily	basis.

Risk	Management	VaR	is	calculated	assuming	a	one-day	holding	period	and	an expected	tail-loss	methodology	which	approximates	a	95%	confidence	level. VaR	provides	a	consistent	framework	to	measure	risk	profiles	and	levels	of diversification	across	product	types	and	is	used	for	aggregating	risks	across businesses	and	monitoring	limits.	These	VaR	results	are	reported	to	senior management,	the	Board	of	Directors	and	regulators.

Under	the	Firm's	Risk	Management	VaR	methodology,	assuming	current changes	in	market	values	are	consistent	with	the	historical	changes	used	in	the simulation,	the	Firm	would	expect	to	incur	VaR	"band	breaks,"	defined	as	losses greater	than	that	predicted	by	VaR	estimates,	not	more	than	five	times	every	100 trading	days.	The	number	of	VaR	band	breaks	observed	can	differ	from	the statistically	expected	number	of	band	breaks	if	the	current	level	of	market volatility	is	materially	different	from	the	level	of	market	volatility	during	the	12 months	of	historical	data	used	in	the	VaR	calculation.

Underlying	the	overall	VaR	model	framework	are	individual	VaR	models	that simulate	historical	market	returns	for	individual	products	and/or	risk	factors.	To capture	material	market	risks	as	part	of	the	Firm's	risk	management	framework, comprehensive	VaR	model	calculations	are	performed	daily	for	businesses whose	activities	give	rise	to	market	risk.	These	VaR	models	are	granular	and incorporate	numerous	risk	factors	and	inputs	to	simulate	daily	changes	in	market values	over	the	historical	period;	inputs	are	selected	based	on	the	risk	profile	of each	portfolio	as	sensitivities	and	historical	time	series	used	to	generate	daily market	values	may	be	different	across	product	types	or	risk	management systems.	The	VaR	model	results	across	all	portfolios	are	aggregated	at	the	Firm level.

For	certain	products,	specific	risk	parameters	are	not	captured	in	VaR	due	to	the lack	of	inherent	liquidity	and	availability	of	appropriate	historical	data	for	these products.	The	Firm	uses	proxies	to	estimate	the	VaR	for	these	and	other	products when	daily	time	series	are	not	available.	It	is	likely	that	using	an	actual	price- based	time	series	for	these	products,	if	available,	would	affect	the	VaR	results presented.

In	addition,	data	sources	used	in	VaR	models	may	not	be	the	same	as	those	used for	financial	statement	valuations.	In	cases	where	market	prices	are	not observable,	or	where	proxies	are	used	in	VaR	historical	time	series,	the	sources may	differ.	The	daily	market	data	used	in	VaR	models	may	be	different	than	the independent	third-party	data	collected	for	VCG	price	testing	in	VCG's	monthly valuation	process	(see	Valuation	process	in	Note	3	for	further	information	on	the Firm's	valuation	process).	VaR	model	calculations	require	daily	data	and	a consistent	source	for	valuation	and	therefore	it	is	not	practical	to	use	the	data collected	in	the	VCG	monthly	valuation	process.

Since	VaR	is	based	on	historical	data,	it	is	an	imperfect	measure	of	market	risk exposure	and	potential	losses,	and	it	is	not	used	to	estimate	the	impact	of	stressed market	conditions	or	to	manage	any	impact	from	potential	stress	events.	In addition,	based	on	their	reliance	on	available	historical	data,	limited	time horizons,	and	other	factors,	VaR	measures	are	inherently	limited	in	their	ability to	measure	certain	risks	and	to	predict	losses,	particularly	those	associated	with market	illiquidity	and	sudden	or	severe	shifts	in	market	conditions.	The	Firm therefore	considers	other	measures	in	addition	to	VaR,	such	as	stress	testing,	to capture	and	manage	its	market	risk	positions.

The	Firm's	VaR	model	calculations	are	periodically	evaluated	and	enhanced	in response	to	changes	in	the	composition	of	the	Firm's	portfolios,	changes	in market	conditions,	improvements	in	the	Firm's	modeling	techniques	and	other factors.	Such	changes	may	also	affect	historical	comparisons	of	VaR	results. Model	changes	undergo	a	review	and	approval	process	by	the	Model	Review Group	prior	to	implementation	into	the	operating	environment.	For	further information,	see	Model	risk	on	page	142.

The	Firm	calculates	separately	a	daily	aggregated	VaR	in	accordance	with regulatory	rules	("Regulatory	VaR"),	which	is	used	to	derive	the	Firm's regulatory	VaR-based	capital	requirements	under	Basel	III.	This	Regulatory	VaR model	framework	currently	assumes	a	ten	business-day	holding	period	and	an expected	tail	loss	methodology	which	approximates	a	99%	confidence	level. Regulatory	VaR	is	applied	to	"covered"	positions	as	defined	by	Basel	III,	which may	be	different	than	the	positions	included	in	the	Firm's	Risk	Management VaR.	For	example,	credit	derivative	hedges	of	accrual	loans	are	included	in	the Firm's	Risk	Management	VaR,	while	Regulatory	VaR	excludes	these	credit derivative	hedges.	In	addition,	in	contrast	to	the	Firm's	Risk	Management	VaR, Regulatory	VaR	currently	excludes	the	diversification	benefit	for	certain	VaR models.

For	additional	information	on	Regulatory	VaR	and	the	other	components	of market	risk	regulatory	capital	(e.g.	VaR-based	measure,	stressed	VaR-based measure	and	the	respective	backtesting)	for	the	Firm,	see	JPMorgan	Chase's

Basel	III	Pillar	3	Regulatory	Capital	Disclosures	reports,	which	are	available	on the	Firm's	website	(http://investor.shareholder.com/jpmorganchase/basel.cfm).

The	table	below	shows	the	results	of	the	Firm's	Risk	Management	VaR	measure	using	a	95%	confidence	level.

# Total	VaR

| As	of	or	for	the	year	ended	December	31, |  |  | 2015 |  |  |  |  | 2014 |  |  |  |  | At	December	31, | At	December	31, |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | \tAvg. |  | Min | Max |  | \tAvg. |  | Min |  | Max |  | 2015 |  | 2014 | 2014 |
| CIB\ttrading\tVaR\tby\trisk\ttype |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fixed\tincome | $42 |  | $31 | $60 |  | $34 |  | $23 |  | $45 |  | $37 |  | $34 |  |
| Foreign\texchange | 9 |  | 6 | 16 |  | 8 |  | 4 |  | 25 |  | 6 |  | 8 |  |
| Equities | 18 |  | 11 | 26 |  | 15 |  | 10 |  | 23 |  | 21 |  | 22 |  |
| Commodities\tand\tother | 10 |  | 6 | 14 |  | 8 |  | 5 |  | 14 |  | 10 |  | 6 |  |
| Diversification\tbenefit\tto\tCIB\ttrading\tVaR | (35) | (a) | (b)\nNM | NM | (b) | (30) | (a) | NM | (b) | NM | (b) | (28) | (a) | (32) | (a) |
| CIB\ttrading\tVaR | 44 |  | 27 | 68 |  | 35 |  | 24 |  | 49 |  | 46 |  | 38 |  |
| Credit\tportfolio\tVaR | 14 |  | 10 | 20 |  | 13 |  | 8 |  | 18 |  | 10 |  | 16 |  |
| Diversification\tbenefit\tto\tCIB\tVaR | (9) | (a) | (b)\nNM | NM | (b) | (8) | (a) | NM | (b) | NM | (b) | (10) | (a) | (9) | (a) |
| CIB\tVaR | 49 |  | 34 | 71 |  | 40 |  | 29 |  | 56 |  | 46 |  | 45 |  |
| Mortgage\tBanking\tVaR | 4 |  | 2 | 8 |  | 7 |  | 2 |  | 28 |  | 4 |  | 3 |  |
| Treasury\tand\tCIO\tVaR | 4 |  | 3 | 7 |  | 4 |  | 3 |  | 6 |  | 5 |  | 4 |  |
| Asset\tManagement\tVaR | 3 |  | 2 | 4 |  | 3 |  | 2 |  | 4 |  | 3 |  | 2 |  |
| Diversification\tbenefit\tto\tother\tVaR | (3) | (a) | (b)\nNM | NM | (b) | (4) | (a) | NM | (b) | NM | (b) | (4) | (a) | (3) | (a) |
| Other\tVaR | 8 |  | 5 | 12 |  | 10 |  | 5 |  | 27 |  | 8 |  | 6 |  |
| Diversification\tbenefit\tto\tCIB\tand\tother\tVaR | (10) | (a) | (b)\nNM | NM | (b) | (7) | (a) | NM | (b) | NM | (b) | (9) | (a) | (5) | (a) |
| Total\tVaR | $47 |  | $34 | $67 |  | $43 |  | $30 |  | $70 |  | $45 |  | $46 |  |

(a) Average	portfolio	VaR	and	period-end	portfolio	VaR	were	less	than	the	sum	of	the	VaR	of	the	components	described	above,	which	is	due	to	portfolio	diversification.	The	diversification	effect	reflects	the	fact	that risks	are	not	perfectly	correlated.

(b) Designated	as	not	meaningful	("NM"),	because	the	minimum	and	maximum	may	occur	on	different	days	for	distinct	risk	components,	and	hence	it	is	not	meaningful	to	compute	a	portfolio-diversification	effect.

As	presented	in	the	table	above,	average	Total	VaR	and	average	CIB	VaR increased	during	2015	when	compared	with	2014.	The	increase	in	Total	VaR	was primarily	due	to	higher	volatility	in	the	CIB	in	the	historical	one-year	look-back period	during	2015	versus	2014.

Average	CIB	trading	VaR	increased	during	2015	primarily	due	to	higher	VaR	in the	Fixed	Income	and	Equities	risk	factors	reflecting	a	combination	of	higher market	volatility	and	increased	exposure.

Average	Mortgage	Banking	VaR	decreased	from	the	prior	year.	Average Mortgage	Banking	VaR	was	elevated	late	in	the	second	quarter	of	2014	due	to	a change	in	the	MSR	hedge	position	made	in	advance	of	an	anticipated	update	to certain	MSR	model	assumptions;	when	such	updates	were	implemented,	the MSR	VaR	decreased	to	levels	more	consistent	with	prior	periods.

The	Firm	continues	to	enhance	the	VaR	model	calculations	and	time	series inputs	related	to	certain	asset-backed	products.

The	Firm's	average	Total	VaR	diversification	benefit	was	$10	million	or	21%	of the	sum	for	2015,	compared	with	$7	million	or	16%	of	the	sum	for	2014.	In general,	over	the	course	of	the	year,	VaR	exposure	can	vary	significantly	as positions	change,	market	volatility	fluctuates	and	diversification	benefits	change.

# VaR	back-testing

The	Firm	evaluates	the	effectiveness	of	its	VaR	methodology	by	back-testing, which	compares	the	daily	Risk	Management	VaR	results	with	the	daily	gains	and losses	recognized	on	market-risk	related	revenue.

The	Firm's	definition	of	market	risk-related	gains	and	losses	is	consistent	with the	definition	used	by	the	banking	regulators	under	Basel	III.	Under	this definition	market	risk-related	gains	and	losses	are	defined	as:	gains	and	losses	on the	positions	included	in	the	Firm's	Risk	Management	VaR,	excluding	fees, commissions,	certain	valuation	adjustments	(e.g.,	liquidity	and	DVA),	net interest	income,	and	gains	and	losses	arising	from	intraday	trading.

The	following	chart	compares	the	daily	market	risk-related	gains	and	losses	with the	Firm's	Risk	Management	VaR	for	the	year	ended	December	31,	2015.	As	the chart	presents	market	risk-related	gains	and	losses	related	to	those	positions included	in	the	Firm's	Risk	Management	VaR,	the	results	in	the	table	below differ	from	the	results	of	back-testing	disclosed	in	the	Market	Risk	section	of	the Firm's

Basel	III	Pillar	3	Regulatory	Capital	Disclosures	reports,	which	are	based	on Regulatory	VaR	applied	to	covered	positions.	The	chart	shows	that	for	the	year ended	December	31,	2015,	the	Firm	observed	three	VaR	band	breaks	and	posted Market	risk-related	gains	on	117	of	the	260	days	in	this	period.

# Other	risk	measures

# Economic-value	stress	testing

Along	with	VaR,	stress	testing	is	an	important	tool	in	measuring	and	controlling risk.	While	VaR	reflects	the	risk	of	loss	due	to	adverse	changes	in	markets	using recent	historical	market	behavior	as	an	indicator	of	losses,	stress	testing	is intended	to	capture	the	Firm's	exposure	to	unlikely	but	plausible	events	in abnormal	markets.	The	Firm	runs	weekly	stress	tests	on	market-related	risks across	the	lines	of	business	using	multiple	scenarios	that	assume	significant changes	in	risk	factors	such	as	credit	spreads,	equity	prices,	interest	rates, currency	rates	or	commodity	prices.

The	Firm	uses	a	number	of	standard	scenarios	that	capture	different	risk	factors across	asset	classes	including	geographical	factors,	specific	idiosyncratic	factors and	extreme	tail	events.	The	stress	framework	calculates	multiple	magnitudes	of potential	stress	for	both	market	rallies	and	market	sell-offs	for	each	risk	factor and	combines	them	in	multiple	ways	to	capture	different	market	scenarios.	For example,	certain	scenarios	assess	the	potential	loss	arising	from	current exposures	held	by	the	Firm	due	to	a	broad	sell	off	in	bond	markets	or	an	extreme widening	in	corporate	credit	spreads.	The	flexibility	of	the

stress	testing	framework	allows	risk	managers	to	construct	new,	specific scenarios	that	can	be	used	to	form	decisions	about	future	possible	stress	events.

Stress	testing	complements	VaR	by	allowing	risk	managers to	shock	current	market	prices	to	more	extreme	levels	relative	to	those historically	realized,	and	to	stress	test	the	relationships	between	market	prices under	extreme	scenarios.

Stress-test	results,	trends	and	qualitative	explanations	based	on	current	market risk	positions	are	reported	to	the	respective	LOB's	and	the	Firm's	senior management	to	allow	them	to	better	understand	the	sensitivity	of	positions	to certain	defined	events	and	to	enable	them	to	manage	their	risks	with	more transparency.	In	addition,	results	are	reported	to	the	Board	of	Directors.

Stress	scenarios	are	defined	and	reviewed	by	Market	Risk,	and	significant changes	are	reviewed	by	the	relevant	LOB	Risk	Committees	and	may	be redefined	on	a	periodic	basis	to	reflect	current	market	conditions.

The	Firm's	stress	testing	framework	is	utilized	in	calculating	results	under scenarios	mandated	by	the	Federal	Reserve's	Comprehensive	Capital	Analysis and	Review	("CCAR")	and

Internal	Capital	Adequacy	Assessment	Process	("ICAAP")processes.	In	addition, the	results	are	incorporated	into	the	quarterly	assessment	of	the	Firm's	Risk Appetite	Framework	and	are	also	presented	to	the	DRPC.

# Nonstatistical	risk	measures

Nonstatistical	risk	measures	include	sensitivities	to	variables	used	to	value positions,	such	as	credit	spread	sensitivities,	interest	rate	basis	point	values	and market	values.	These	measures	provide	granular	information	on	the	Firm's market	risk	exposure.	They	are	aggregated	by	line	of	business	and	by	risk	type, and	are	also	used	for	monitoring	internal	market	risk	limits.

# Loss	advisories	and	profit	and	loss	drawdowns

Loss	advisories	and	profit	and	loss	drawdowns	are	tools	used	to	highlight	trading losses	above	certain	levels	of	risk	tolerance.	Profit	and	loss	drawdowns	are defined	as	the	decline	in	net	profit	and	loss	since	the	year-to-date	peak	revenue level.

# Earnings-at-risk

The	VaR	and	stress-test	measures	described	above	illustrate	the	economic sensitivity	of	the	Firm's	Consolidated	balance	sheets	to	changes	in	market variables.	The	effect	of	interest	rate	exposure	on	the	Firm's	reported	net	income is	also	important	as	interest	rate	risk	represents	one	of	the	Firm's	significant market	risks.	Interest	rate	risk	arises	not	only	from	trading	activities	but	also from	the	Firm's	traditional	banking	activities,	which	include	extension	of	loans and	credit	facilities,	taking	deposits	and	issuing	debt.	The	Firm	evaluates	its structural	interest	rate	risk	exposure	through	earnings-at-risk,	which	measures the	extent	to	which	changes	in	interest	rates	will	affect	the	Firm's	net	interest income	and	interest	rate-sensitive	fees.	Earnings-at-risk	excludes	the	impact	of CIB's	markets-based	activities	and	MSRs,	as	these	sensitivities	are	captured under	VaR.

The	CIO,	Treasury	and	Corporate	("CTC")	Risk	Committee	establishes	the Firm's	structural	interest	rate	risk	policies	and	market	risk	limits,	which	are subject	to	approval	by	the	DRPC.	The	CIO,	working	in	partnership	with	the	lines of	business,	calculates	the	Firm's	structural	interest	rate	risk	profile	and	reviews it	with	senior	management	including	the	CTC	Risk	Committee	and	the	Firm's ALCO.	In	addition,	oversight	of	structural	interest	rate	risk	is	managed	through	a dedicated	risk	function	reporting	to	the	CTC	CRO.	This	risk	function	is responsible	for	providing	independent	oversight	and	governance	around assumptions	and	establishing	and	monitoring	limits	for	structural	interest	rate risk.	The	Firm	manages	structural	interest	rate	risk	generally	through	its investment	securities	portfolio	and	interest	rate	derivatives.

Structural	interest	rate	risk	can	occur	due	to	a	variety	of	factors,	including:

•Differences	in	the	timing	among	the	maturity	or	repricing	of	assets,	liabilities and	off-balance	sheet	instruments

•Differences	in	the	amounts	of	assets,	liabilities	and	off-balance	sheet instruments	that	are	repricing	at	the	same	time

•Differences	in	the	amounts	by	which	short-term	and	long-term	market interest	rates	change	(for	example,	changes	in	the	slope	of	the	yield	curve)

•The	impact	of	changes	in	the	maturity	of	various	assets,	liabilities	or	off- balance	sheet	instruments	as	interest	rates	change

The	Firm	manages	interest	rate	exposure	related	to	its	assets	and	liabilities	on	a consolidated,	firmwide	basis.	Business	units	transfer	their	interest	rate	risk	to Treasury	and	CIO	through	a	transfer-pricing	system,	which	takes	into	account the	elements	of	interest	rate	exposure	that	can	be	risk-managed	in	financial markets.	These	elements	include	asset	and	liability	balances	and	contractual	rates of	interest,	contractual	principal	payment	schedules,	expected	prepayment experience,	interest	rate	reset	dates	and	maturities,	rate	indices	used	for	repricing, and	any	interest	rate	ceilings	or	floors	for	adjustable	rate	products.	All	transfer- pricing	assumptions	are	dynamically	reviewed.

The	Firm	generates	a	net	interest	income	baseline,	and	then	conducts	simulations of	changes	for	interest	rate-sensitive	assets	and	liabilities	denominated	in	U.S. dollar	and	other	currencies	("non-U.S.	dollar"	currencies).	Earnings-at-risk scenarios	estimate	the	potential	change	in	this	net	interest	income	baseline, excluding	CIB's	markets-based	activities	and	MSRs,	over	the	following	12 months,	utilizing	multiple	assumptions.	These	scenarios	may	consider	the impact	on	exposures	as	a	result	of	changes	in	interest	rates	from	baseline	rates,	as well	as	pricing	sensitivities	of	deposits,	optionality	and	changes	in	product	mix. The	scenarios	include	forecasted	balance	sheet	changes,	as	well	as	modeled prepayment	and	reinvestment	behavior,	but	do	not	include	assumptions	about actions	which	could	be	taken	by	the	Firm	in	response	to	any	such	instantaneous rate	changes.	For	example,	mortgage	prepayment	assumptions	are	based	on current	interest	rates	compared	with	underlying	contractual	rates,	the	time	since origination,	and	other	factors	which	are	updated	periodically	based	on	historical experience.	The	Firm's	earnings-at-risk	scenarios	are	periodically	evaluated	and enhanced	in	response	to	changes	in	the	composition	of	the	Firm's	balance	sheet, changes	in	market	conditions,	improvements	in	the	Firm's	simulation	and	other factors.

Effective	January	1,	2015,	the	Firm	conducts	earnings-at-risk	simulations	for assets	and	liabilities	denominated	in	U.S.	dollars	separately	from	assets	and liabilities	denominated	in	non-U.S.	dollar	currencies	in	order	to	enhance	the Firm's	ability	to	monitor	structural	interest	rate	risk	from	non-U.S.	dollar exposures.

The	Firm's	U.S.	dollar	sensitivity	is	presented	in	the	table	below.	The	result	of the	non-U.S.	dollar	sensitivity	scenarios	were	not	material	to	the	Firm's earnings-at-risk	at	December	31,	2015.

# JPMorgan	Chase's	12-month	pretax	net	interest	income	sensitivity profiles

# (Excludes	the	impact	of	CIB's	markets-based	activities	and	MSRs)

(a) Downward	100-	and	200-basis-points	parallel	shocks	result	in	a	federal	funds	target	rate	of zero	and	negative	three-	and	six-month	U.S.	Treasury	rates.	The	earnings-at-risk	results	of such	a	low	probability	scenario	are	not	meaningful.

The	Firm's	benefit	to	rising	rates	on	U.S.	dollar	assets	and	liabilities	is	largely	a result	of	reinvesting	at	higher	yields	and	assets	repricing	at	a	faster	pace	than deposits.	The	Firm's	net	U.S.	dollar	sensitivity	profile	at	December	31,	2015	was not	materially	different	than	December	31,	2014.

Separately,	another	U.S.	dollar	interest	rate	scenario	used	by	the	Firm	— involving	a	steeper	yield	curve	with	long-term	rates	rising	by	100	basis	points and	short-term	rates	staying	at	current	levels	—	results	in	a	12-month	pretax benefit	to	net	interest	income,	excluding	CIB's	markets-based	activities	and MSRs,	of	approximately	$700	million.	The	increase	in	net	interest	income	under this	scenario	reflects	the	Firm	reinvesting	at	the	higher	long-term	rates,	with funding	costs	remaining	unchanged.	The	result	of	the	comparable	non-U.S. dollar	scenario	was	not	material	to	the	Firm.

# Non-U.S.	dollar	FX	Risk

Non-U.S.	dollar	FX	risk	is	the	risk	that	changes	in	foreign	exchange	rates	affect the	value	of	the	Firm's	assets	or	liabilities	or	future	results.	The	Firm	has structural	non-U.S.	dollar	FX	exposures	arising	from	capital	investments, forecasted	expense	and	revenue,	the	investment	securities	portfolio	and	issuing debt	in	denominations	other	than	the	U.S.	dollar.	Treasury	and	CIO,	working	in partnership	with	the	lines	of	business,	primarily	manage	these	risks	on	behalf	of the	Firm.	Treasury	and	CIO	may	hedge	certain	of	these	risks	using	derivatives within	risk	limits	governed	by	the	CTC	Risk	Committee.

# COUNTRY	RISK	MANAGEMENT

Country	risk	is	the	risk	that	a	sovereign	event	or	action	alters	the	value	or	terms of	contractual	obligations	of	obligors,	counterparties	and	issuers	or	adversely affects	markets	related	to	a	particular	country.	The	Firm	has	a	comprehensive country	risk	management	framework	for	assessing	country	risks,	determining risk	tolerance,	and	measuring	and	monitoring	direct	country	exposures	in	the Firm.	The	Country	Risk	Management	group	is	responsible	for	developing guidelines	and	policies	for	managing	country	risk	in	both	emerging	and developed	countries.	The	Country	Risk	Management	group	actively	monitors	the various	portfolios	giving	rise	to	country	risk	to	ensure	the	Firm's	country	risk exposures	are	diversified	and	that	exposure	levels	are	appropriate	given	the Firm's	strategy	and	risk	tolerance	relative	to	a	country.

# Country	risk	organization

The	Country	Risk	Management	group,	part	of	the	independent	risk	management function,	works	in	close	partnership	with	other	risk	functions	to	identify	and monitor	country	risk	within	the	Firm.	The	Firmwide	Risk	Executive	for	Country Risk	reports	to	the	Firm's	CRO.

Country	Risk	Management	is	responsible	for	the	following	functions:

•Developing	guidelines	and	policies	consistent	with	a	comprehensive	country risk	framework

•Assigning	sovereign	ratings	and	assessing	country risks

•Measuring	and	monitoring	country	risk	exposure	and	stress	across	the Firm

•Managing	country	limits	and	reporting	trends	and	limit	breaches	to	senior management

•Developing	surveillance	tools	for	early	identification	of	potential	country	risk concerns

•Providing	country	risk	scenario analysis

# Country	risk	identification	and	measurement

The	Firm	is	exposed	to	country	risk	through	its	lending,	investing,	and	market- making	activities,	whether	cross-border	or	locally	funded.	Country	exposure includes	activity	with	both	government	and	private-sector	entities	in	a	country. Under	the	Firm's	internal	country	risk	management	approach,	country	exposure is	reported	based	on	the	country	where	the	majority	of	the	assets	of	the	obligor, counterparty,	issuer	or	guarantor	are	located	or	where	the	majority	of	its	revenue is	derived,	which	may	be	different	than	the	domicile	(legal	residence)	or	country of	incorporation	of	the	obligor,	counterparty,	issuer	or	guarantor.	Country exposures	are	generally	measured	by	considering	the	Firm's	risk	to	an	immediate default	of	the	counterparty	or	obligor,	with	zero	recovery.	Assumptions	are sometimes	required	in	determining	the	measurement	and	allocation	of	country exposure,	particularly	in	the	case	of	certain	tranched	credit	derivatives.	Different measurement	approaches	or	assumptions	would	affect	the	amount	of	reported country	exposure.

Under	the	Firm's	internal	country	risk	measurement	framework:

•Lending	exposures	are	measured	at	the	total	committed	amount	(funded	and unfunded),	net	of	the	allowance	for	credit	losses	and	cash	and	marketable securities	collateral	received

•Securities	financing	exposures	are	measured	at	their	receivable	balance,	net of	collateral	received

•Debt	and	equity	securities	are	measured	at	the	fair	value	of	all	positions,

including	both	long	and	short	positions

•Counterparty	exposure	on	derivative	receivables	is	measured	at	the

derivative's	fair	value,	net	of	the	fair	value	of	the	related	collateral.

Counterparty	exposure	on	derivatives	can	change	significantly	because	of market	movements

•Credit	derivatives	protection	purchased	and	sold	is	reported	based	on	the underlying	reference	entity	and	is	measured	at	the	notional	amount	of protection	purchased	or	sold,	net	of	the	fair	value	of	the	recognized	derivative receivable	or	payable.	Credit	derivatives	protection	purchased	and	sold	in	the Firm's	market-making	activities	is	measured	on	a	net	basis,	as	such	activities often	result	in	selling	and	purchasing	protection	related	to	the	same underlying	reference	entity;	this	reflects	the	manner	in	which	the	Firm manages	these	exposures

The	Firm	also	has	indirect	exposures	to	country	risk	(for	example,	related	to	the collateral	received	on	securities	financing	receivables	or	related	to	client	clearing activities).	These	indirect	exposures	are	managed	in	the	normal	course	of business	through	the	Firm's	credit,	market,	and	operational	risk	governance, rather	than	through	Country	Risk	Management.

The	Firm's	internal	country	risk	reporting	differs	from	the	reporting	provided under	the	FFIEC	bank	regulatory	requirements.	For	further	information	on	the FFIEC's	reporting	methodology,	see	Cross-border	outstandings	on	page	327.

# Country	risk	stress	testing

The	country	risk	stress	framework	aims	to	identify	potential	losses	arising	from	a country	crisis	by	capturing	the	impact	of	large	asset	price	movements	in	a country	based	on	market	shocks	combined	with	counterparty	specific assumptions.	Country	Risk	Management	periodically	defines	and	runs	ad	hoc stress	scenarios	for	individual	countries	in	response	to	specific	market	events	and sector	performance	concerns.

# Country	risk	monitoring	and	control

The	Country	Risk	Management	group	establishes	guidelines	for	sovereign ratings	reviews	and	limit	management.	Country	stress	and	nominal	exposures	are measured	under	a	comprehensive	country	limit	framework.	Country	ratings	and limits	are	actively	monitored	and	reported	on	a	regular	basis.	Country	limit requirements	are	reviewed	and	approved	by	senior	management	as	often	as necessary,	but	at	least	annually.	In	addition,	the	Country	Risk	Management group	uses	surveillance	tools,	such	as	signaling	models	and	ratings	indicators, for	early	identification	of	potential	country	risk	concerns.

# Country	risk	reporting

The	following	table	presents	the	Firm's	top	20	exposures	by	country	(excluding the	U.S.)	as	of	December	31,	2015.	The	selection	of	countries	is	based	solely	on the	Firm's	largest	total	exposures	by	country,	based	on	the	Firm's	internal country	risk	management	approach,	and	does	not	represent	the	Firm's	view	of any	actual	or	potentially	adverse	credit	conditions.	Country	exposures	may fluctuate	from	period	to	period	due	to	normal	client	activity	and	market	flows.

# Top	20	country	exposures

|  | Top	20	country	exposures | Top	20	country	exposures |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  |  | December\t31,\t2015 |  |  |
| (in\tbillions) | Lending(a) | Trading\tand\ninvesting(b)(c) | Other(d) | Total\texposure |
| United\tKingdom | $23.8 | $21.8 | $1.1 | $46.7 |
| Germany | 13.8 | 16.7 | 0.2 | 30.7 |
| France | 14.2 | 11.9 | 0.1 | 26.2 |
| Japan | 12.9 | 7.8 | 0.4 | 21.1 |
| China | 10.3 | 7.2 | 1.0 | 18.5 |
| Canada | 13.9 | 2.9 | 0.3 | 17.1 |
| Australia | 7.7 | 5.9 | — | 13.6 |
| Netherlands | 5.0 | 6.0 | 1.4 | 12.4 |
| India | 6.1 | 5.6 | 0.4 | 12.1 |
| Brazil | 6.2 | 4.9 | — | 11.1 |
| Switzerland | 6.7 | 0.9 | 1.9 | 9.5 |
| Korea | 4.3 | 3.3 | 0.1 | 7.7 |
| Hong\tKong | 2.8 | 2.6 | 1.4 | 6.8 |
| Italy | 2.8 | 3.8 | 0.2 | 6.8 |
| Luxembourg | 6.4 | 0.1 | — | 6.5 |
| Spain | 3.2 | 2.1 | 0.1 | 5.4 |
| Singapore | 2.4 | 1.3 | 0.7 | 4.4 |
| Sweden | 1.7 | 2.5 | — | 4.2 |
| Mexico | 2.9 | 1.3 | — | 4.2 |
| Belgium | 1.7 | 2.3 | — | 4.0 |

(a) Lending	includes	loans	and	accrued	interest	receivable	(net	of	collateral	and	the	allowance for	loan	losses),	deposits	with	banks,	acceptances,	other	monetary	assets,	issued	letters	of credit	net	of	participations,	and	unused	commitments	to	extend	credit.	Excludes	intra-day and	operating	exposures,	such	as	from	settlement	and	clearing	activities.

(b) Includes	market-making	inventory,	AFS	securities,	counterparty	exposure	on	derivative	and securities	financings	net	of	collateral	and	hedging.

(c) Includes	single	reference	entity	("single-name"),	index	and	tranched	credit	derivatives	for which	one	or	more	of	the	underlying	reference	entities	is	in	a	country	listed	in	the	above table.

(d) Includes	capital	invested	in	local	entities	and	physical	commodity	inventory.

# MODEL	RISK	MANAGEMENT

# Model	risk

Model	risk	is	the	potential	for	adverse	consequences	from	decisions	based	on incorrect	or	misused	model	outputs	and	reports.

The	Firm	uses	models	for	many	purposes	including	the	valuation	of	positions and	the	measurement	of	risk.	Valuation	models	are	employed	by	the	Firm	to value	certain	financial	instruments	for	which	quoted	prices	may	not	be	readily available.	Valuation	models	may	be	employed	as	inputs	into	risk	measurement models	including	VaR,	regulatory	capital,	estimation	of	stress	loss	and	the allowance	for	credit	losses.

Models	are	owned	by	various	functions	within	the	Firm	based	on	the	specific purposes	of	such	models.	For	example,	VaR	models	and	certain	regulatory capital	models	are	owned	by	the	line	of	business-aligned	risk	management functions.	Owners	of	models	are	responsible	for	the	development, implementation	and	testing	of	their	models,	as	well	as	referral	of	models	to	the Model	Risk	function	for	review	and	approval.	Once	models	have	been	approved, model	owners	are	responsible	for	the	maintenance	of	a	robust	operating environment	and	must	monitor	and	evaluate	the	performance	of	the	models	on an	ongoing	basis.	Model	owners	may	seek	to	enhance	models	in	response	to changes	in	the	portfolios	and	in	product	and	market	developments,	as	well	as	to capture	improvements	in	available	modeling	techniques	and	systems	capabilities.

The	Model	Risk	review	and	governance	functions	review	and	approve	a	wide range	of	models,	including	risk	management,	valuation,	and	regulatory	capital models	used	by	the	Firm.	Independent	of	the	model	owners,	the	Model	Risk review	and	governance	functions	are	part	of	the	Firm's	Model	Risk	unit,	and	the Firmwide	Model	Risk	Executive	reports	to	the	Firm's	CRO.

Models	are	tiered	based	on	an	internal	standard	according	to	their	complexity, the	exposure	associated	with	the	model	and	the	Firm's	reliance	on	the	model. This	tiering	is	subject	to	the	approval	of	the	Model	Risk	function.	A	model review	conducted	by	the	Model	Risk	function	considers	the	model's	suitability for	the	specific	uses	to	which	it	will	be	put.	The	factors	considered	in	reviewing	a model	include	whether	the	model	accurately	reflects	the	characteristics	of	the product	and	its	significant	risks,	the	selection	and	reliability	of	model	inputs, consistency	with	models	for	similar	products,	the	appropriateness	of	any	model- related	adjustments,	and	sensitivity	to	input	parameters	and	assumptions	that cannot	be	observed	from	the	market.	When	reviewing	a	model,	the	Model	Risk function	analyzes	and	challenges	the	model	methodology	and	the	reasonableness of	model	assumptions	and	may	perform	or	require	additional	testing,	including back-testing	of	model	outcomes.	Model	reviews	are	approved	by	the	appropriate level	of	management	within	the	Model	Risk	function	based	on	the	relevant	tier	of the	model.

Under	the	Firm's	Model	Risk	Policy,	the	Model	Risk	function	reviews	and approves	new	models,	as	well	as	material	changes	to	existing	models,	prior	to implementation	in	the	operating	environment.	In	certain	circumstances,	the	head of	the	Model	Risk	function	may	grant	exceptions	to	the	Firm's	model	risk	policy to	allow	a	model	to	be	used	prior	to	review	or	approval.	The	Model	Risk function	may	also	require	the	owner	to	take	appropriate	actions	to	mitigate	the model	risk	if	it	is	to	be	used	in	the	interim.	These	actions	will	depend	on	the model	and	may	include,	for	example,	limitation	of	trading	activity.

For	a	summary	of	valuations	based	on	models,	see	Critical	Accounting	Estimates Used	by	the	Firm	and	Note	3.

# PRINCIPAL	RISK	MANAGEMENT

Principal	investments	are	predominantly	privately-held	financial	assets	and instruments,	typically	representing	an	ownership	or	junior	capital	position,	that have	unique	risks	due	to	their	illiquidity	or	for	which	there	is	less	observable market	or	valuation	data.	Such	investing	activities	are	typically	intended	to	be held	over	extended	investment	periods	and,	accordingly,	the	Firm	has	no expectation	for	short-term	gain	with	respect	to	these	investments.	Principal investments	cover	multiple	asset	classes	and	are	made	either	in	stand-alone investing	businesses	or	as	part	of	a	broader	business	platform.	Asset	classes include	tax-oriented	investments	(e.g.,	affordable	housing	and	alternative	energy investments),	private	equity	and	various	debt	investments.

The	Firm's	principal	investments	are	managed	under	various	lines	of	business and	are	captured	within	the	respective	LOB's	financial	results.	The	Firm's approach	to	managing	principal	risk	is	consistent	with	the	Firm's	general	risk governance	structure.	A	Firmwide	risk	policy	framework	exists	for	all	principal investing	activities.	All	investments	are	approved	by	investment	committees	that include	executives	who	are	independent	from	the	investing	businesses.	The Firm's	independent	control	functions	are	responsible	for	reviewing	the appropriateness	of	the	carrying	value	of	principal	investments	in	accordance	with relevant	policies.	Approved	levels	for	such	investments	are	established	for	each relevant	business	in	order	to	manage	the	overall	size	of	the	portfolios.	Industry, geographic,	and	position	level	concentration	limits	are	in	place	and	are	intended to	ensure	diversification	of	the	portfolios.	The	Firm	also	conducts	stress	testing on	these	portfolios	using	specific	scenarios	that	estimate	losses	based	on significant	market	moves	and/or	other	risk	events.

# OPERATIONAL	RISK	MANAGEMENT

Operational	risk	is	the	risk	of	loss	resulting	from	inadequate	or	failed	processes or	systems,	human	factors	or	due	to	external	events	that	are	neither	market-	nor credit-related.	Operational	risk	is	inherent	in	the	Firm's	activities	and	can manifest	itself	in	various	ways,	including	fraudulent	acts,	business	interruptions, inappropriate	behavior	of	employees,	failure	to	comply	with	applicable	laws	and regulations	or	failure	of	vendors	to	perform	in	accordance	with	their arrangements.	These	events	could	result	in	financial	losses,	litigation	and regulatory	fines,	as	well	as	other	damage	to	the	Firm.	The	goal	is	to	keep operational	risk	at	appropriate	levels,	in	light	of	the	Firm's	financial	strength,	the characteristics	of	its	businesses,	the	markets	in	which	it	operates,	and	the competitive	and	regulatory	environment	to	which	it	is	subject.

To	monitor	and	control	operational	risk,	the	Firm	maintains	an	Operational	Risk Management	Framework	("ORMF")	designed	to	enable	the	Firm	to	maintain	a sound	and	well-controlled	operational	environment.	The	four	main	components of	the	ORMF	include:	governance,	risk	identification	and	assessment, monitoring	and	reporting,	and	measurement.

Risk	Management	is	responsible	for	prescribing	the	ORMF	to	the	lines	of business	and	corporate	functions	and	for	providing	independent	oversight	of	its implementation.	The	lines	of	business	and	corporate	functions	are	responsible	for implementing	the	ORMF.	The	Firmwide	Oversight	and	Control	Group	("O&C"), which	consists	of	dedicated	control	officers	within	each	of	the	lines	of	business and	corporate	functional	areas,	as	well	as	a	central	oversight	team,	is	responsible for	day	to	day	execution	of	the	ORMF.

# Operational	risk	management	framework

The	components	of	the	Operational	Risk	Management	Framework	are:

# Governance

The	Firm's	operational	risk	governance	function	reports	to	the	Firm's	CRO	and is	responsible	for	defining	the	ORMF	and	establishing	the	firmwide	operational risk	management	governance	structure,	policies	and	standards.	The	Firmwide Risk	Executive	for	Operational	Risk	Governance,	a	direct	report	of	the	CRO, works	with	the	line	of	business	CROs	to	provide	independent	oversight	of	the implementation	of	the	ORMF	across	the	Firm.	Operational	Risk	Officers ("OROs"),	who	report	to	the	LOB	Chief	Risk	Officers	or	to	the	Firmwide	Risk Executive	for	Operational	Risk	Governance,	are	independent	of	the	lines	of business	and	corporate	functions,	and	O&C.	The	OROs	provide	oversight	of	the implementation	of	the	ORMF	within	in	each	line	of	business	and	corporate function.

Line	of	business,	corporate	function	and	regional	control	committees	oversee	the operational	risk	and	control	environments	of	their	respective	businesses, functions	or	regions.	These	committees	escalate	operational	risk	issues	to	the FCC,	as	appropriate.	For	additional	information	on	the	Firmwide	Control Committee,	see	Enterprise	Risk	Management	on	pages	107–111.

# Risk	Identification	and	Self-Assessment

In	order	to	evaluate	and	monitor	operational	risk,	the	lines	of	business	and corporate	functions	utilize	several	processes	to	identify,	assess,	mitigate	and manage	operational	risk.	Firmwide	standards	are	in	place	for	each	of	these processes	and	set	the	minimum	requirements	for	how	they	must	be	applied.

The	Firm's	risk	and	control	self-assessment	("RCSA")	process	and	supporting architecture	requires	management	to	identify	material	inherent	operational	risks, assess	the	design	and	operating	effectiveness	of	relevant	controls	in	place	to mitigate	such	risks,	and	evaluate	residual	risk.	Action	plans	are	developed	for control	issues	that	are	identified,	and	businesses	are	held	accountable	for	tracking and	resolving	issues	on	a	timely	basis.	Risk	Management	performs	an independent	challenge	of	the	RCSA	program	including	residual	risk	results.

The	Firm	also	tracks	and	monitors	operational	risk	events	which	are	analyzed	by the	responsible	businesses	and	corporate	functions.	This	enables	identification	of the	root	causes	of	the	operational	risk	events	and	evaluation	of	the	associated controls.

Furthermore,	lines	of	business	and	corporate	functions	establish	key	risk indicators	to	manage	and	monitor	operational	risk	and	the	control	environment. These	assist	in	the	early	detection	and	timely	escalation	of	issues	or	events.

# Risk	monitoring	and	reporting

Operational	risk	management	and	control	reports	provide	information,	including actual	operational	loss	levels,	self-assessment	results	and	the	status	of	issue resolution	to	the	lines	of	business	and	senior	management.	In	addition,	key control	indicators	and	operating	metrics	are	monitored	against	targets	and thresholds.	The	purpose	of	these	reports	is	to	enable	management	to	maintain operational	risk	at	appropriate	levels	within	each	line	of	business,	to	escalate issues	and	to	provide	consistent	data	aggregation	across	the	Firm's	businesses and	functions.

# Measurement

Two	standard	forms	of	operational	risk	measurement	include	operational	risk capital	and	operational	risk	losses	under	baseline	and	stressed	conditions.

The	Firm's	operational	risk	capital	methodology	incorporates	the	four	required elements	of	the	Advanced	Measurement	Approach	under	the	Basel	III framework:

•Internal losses,

•External losses,

# •Scenario	analysis,	and

•Business	environment	and	internal	control	factors.

The	primary	component	of	the	operational	risk	capital	estimate	is	the	result	of	a statistical	model,	the	Loss	Distribution	Approach	("LDA"),	which	simulates	the frequency	and	severity	of	future	operational	risk	losses	based	on	historical	data. The	LDA	model	is	used	to	estimate	an	aggregate	operational	risk	loss	over	a one-year	time	horizon,	at	a	99.9%	confidence	level.	The	LDA	model incorporates	actual	internal	operational	risk	losses	in	the	quarter	following	the period	in	which	those	losses	were	realized,	and	the	calculation	generally continues	to	reflect	such	losses	even	after	the	issues	or	business	activities	giving rise	to	the	losses	have	been	remediated	or	reduced.

The	calculation	is	supplemented	by	external	loss	data	as	needed,	as	well	as	both management's	view	of	plausible	tail	risk,	which	is	captured	as	part	of	the Scenario	Analysis	process,	and	evaluation	of	key	LOB	internal	control	metrics (BEICF).	The	Firm	may	further	supplement	such	analysis	to	incorporate feedback	from	its	bank	regulators.

The	Firm	considers	the	impact	of	stressed	economic	conditions	on	operational risk	losses	and	a	forward	looking	view	of	material	operational	risk	events	that may	occur	in	a	stressed	environment.	The	Firm's	operational	risk	stress	testing framework	is	utilized	in	calculating	results	for	the	Firm's	CCAR,	ICAAP	and Risk	Appetite	processes.

For	information	related	to	operational	risk	RWA,	CCAR	or	ICAAP,	see	Capital Management	section,	pages	149–158.

# Insurance

One	of	the	ways	operational	loss	may	be	mitigated	is	through	insurance maintained	by	the	Firm.	The	Firm	purchases	insurance	to	be	in	compliance	with local	laws	and	regulations	(e.g.,	workers	compensation),	as	well	as	to	serve	other needs	(e.g.,	property	loss	and	public	liability).	Insurance	may	also	be	required	by third	parties	with	whom	the	Firm	does	business.	The	insurance	purchased	is reviewed	and	approved	by	senior	management.

# Cybersecurity

The	Firm	devotes	significant	resources	maintaining	and	regularly	updating	its systems	and	processes	that	are	designed	to	protect	the	security	of	the	Firm's computer	systems,	software,	networks	and	other	technology	assets	against attempts	by	unauthorized	parties	to	obtain	access	to	confidential	information, destroy	data,	disrupt	or	degrade	service,	sabotage	systems	or	cause	other	damage.

Third	parties	with	which	the	Firm	does	business	or	that	facilitate	the	Firm's business	activities	(e.g.,	vendors,	exchanges,	clearing	houses,	central depositories,	and	financial	intermediaries)	could	also	be	sources	of	cybersecurity risk	to	the	Firm,	including	with	respect	to	breakdowns	or	failures	of	their systems,	misconduct	by	the	employees	of	such	parties,	or	cyberattacks	which could	affect	their	ability	to	deliver	a	product	or	service	to	the	Firm	or	result	in lost	or	compromised	information	of	the	Firm	or	its	clients.	In	addition,	customers with	which	or	whom	the	Firm	does	business	can	also	be	sources	of	cybersecurity risk	to	the	Firm,	particularly	when	their	activities	and	systems	are	beyond	the Firm's	own	security	and	control	systems.	Customers	will	generally	be responsible	for	losses	incurred	due	to	their	own	failure	to	maintain	the	security	of their	own	systems	and	processes.

The	Firm	and	several	other	U.S.	financial	institutions	have	experienced significant	distributed	denial-of-service	attacks	from	technically	sophisticated and	well-resourced	unauthorized	parties	which	are	intended	to	disrupt	online banking	services.	The	Firm	and	its	clients	are	also	regularly	targeted	by unauthorized	parties	using	malicious	code	and	viruses.	On	September	10,	2014, the	Firm	disclosed	that	a	cyberattack	against	the	Firm	had	occurred.	The cyberattacks	experienced	to	date	have	not	resulted	in	any	material	disruption	to the	Firm's	operations	nor	have	they	had	a	material	adverse	effect	on	the	Firm's results	of	operations.	The	Firm's	Board	of	Directors	and	the	Audit	Committee are	regularly	apprised	regarding	the	cybersecurity	policies	and	practices	of	the Firm	as	well	as	the	Firm's	efforts	regarding	significant	cybersecurity	events.

Cybersecurity	attacks,	like	the	one	experienced	by	the	Firm,	highlight	the	need for	continued	and	increased	cooperation	among	businesses	and	the	government, and	the	Firm	continues	to	work	to	strengthen	its	partnerships	with	the	appropriate government	and	law	enforcement	agencies	and	other	businesses,	including	the Firm's	third-party	service	providers,	in	order	to	understand	the	full	spectrum	of cybersecurity	risks	in	the	environment,	enhance	defenses	and	improve	resiliency against	cybersecurity	threats.

The	Firm	has	established,	and	continues	to	establish,	defenses	to	mitigate	other possible	future	attacks.	To	enhance	its	defense	capabilities,	the	Firm	increased cybersecurity	spending	from	approximately	$250	million	in	2014,	to approximately	$500	million	in	2015,	and	expects	the	spending	to	increase	to more	than	$600	million	in	2016.	Enhancements	include	more	robust	testing, advanced	analytics,	improved	technology	coverage,	strengthened	access management	and	controls	and	a	program	to	increase	employee	awareness	about cybersecurity	risks	and	best	practices.

# Business	and	technology	resiliency

JPMorgan	Chase's	global	resiliency	and	crisis	management	program	is	intended to	ensure	that	the	Firm	has	the	ability	to	recover	its	critical	business	functions and	supporting	assets	(i.e.,	staff,	technology	and	facilities)	in	the	event	of	a

business	interruption,	and	to	remain	in	compliance	with	global	laws	and regulations	as	they	relate	to	resiliency	risk.	The	program	includes	corporate governance,	awareness	and	training,	as	well	as	strategic	and	tactical	initiatives aimed	to	ensure	that	risks	are	properly	identified,	assessed,	and	managed.

The	Firm	has	established	comprehensive	tracking	and	reporting	of	resiliency plans	in	order	to	proactively	anticipate	and	manage	various	potential	disruptive circumstances	such	as	severe	weather	and	flooding,	technology	and communications	outages,	cyber	incidents,	mass	transit	shutdowns	and	terrorist threats,	among	others.	The	resiliency	measures	utilized	by	the	Firm	include backup	infrastructure	for	data	centers,	a	geographically	distributed	workforce, dedicated	recovery	facilities,	providing	technological	capabilities	to	support remote	work	capacity	for	displaced	staff	and	accommodation	of	employees	at alternate	locations.	JPMorgan	Chase	continues	to	coordinate	its	global	resiliency program	across	the	Firm	and	mitigate	business	continuity	risks	by	reviewing	and testing	recovery	procedures.	The	strength	and	proficiency	of	the	Firm's	global resiliency	program	has	played	an	integral	role	in	maintaining	the	Firm's	business operations	during	and	quickly	after	various	events	in	2015	that	have	resulted	in business	interruptions,	such	as	severe	winter	weather	and	flooding	in	the	U.S.	and various	global	protest-related	activities.

# LEGAL	RISK	MANAGEMENT

Legal	risk	is	the	risk	of	loss	or	imposition	of	damages,	fines,	penalties	or	other liability	arising	from	failure	to	comply	with	a	contractual	obligation	or	to	comply with	laws	or	regulations	to	which	the	Firm	is	subject.

In	addition	to	providing	legal	services	and	advice	to	the	Firm,	and communicating	and	helping	the	lines	of	business	adjust	to	the	legal	and regulatory	changes	they	face,	including	the	heightened	scrutiny	and	expectations of	the	Firm's	regulators,	the	global	Legal	function	is	responsible	for	working with	the	businesses	and	corporate	functions	to	fully	understand	and	assess	their adherence	to	laws	and	regulations.	In	particular,	Legal	assists	Oversight	& Control,	Risk,	Finance,	Compliance	and	Internal	Audit	in	their	efforts	to	ensure compliance	with	all	applicable	laws	and	regulations	and	the	Firm's	corporate standards	for	doing	business.	The	Firm's	lawyers	also	advise	the	Firm	on potential	legal	exposures	on	key	litigation	and	transactional	matters,	and	perform a	significant	defense	and	advocacy	role	by	defending	the	Firm	against	claims	and potential	claims	and,	when	needed,	pursuing	claims	against	others.

# Governance	and	oversight

The	Firm's	General	Counsel	reports	to	the	CEO	and	is	a	member	of	the Operating	Committee,	the	Firmwide	Risk	Committee	and	the	Firmwide	Control Committee.	The	General	Counsel's	leadership	team	includes	a	General	Counsel for	each	line	of	business,	the	heads	of	the	Litigation	and	Corporate	&	Regulatory practices,	as	well	as	the	Firm's	Corporate	Secretary.	Each	region	(e.g.,	Latin America,	Asia	Pacific)	has	a	General	Counsel	who	is	responsible	for	managing legal	risk	across	all	lines	of	business	and	functions	in	the	region.

Legal	works	with	various	committees	(including	new	business	initiative	and reputation	risk	committees)	and	the	Firm's	businesses	to	protect	the	Firm's reputation	beyond	any	particular	legal	requirements.	In	addition,	it	advises	the Firm's	Conflicts	Office	which	reviews	the	Firm's	wholesale	transactions	that may	have	the	potential	to	create	conflicts	of	interest	for	the	Firm.

# COMPLIANCE	RISK	MANAGEMENT

Compliance	risk	is	the	risk	of	failure	to	comply	with	applicable	laws,	rules,	and regulations.

Each	line	of	business	is	accountable	for	managing	its	compliance	risk.	The Firm's	Compliance	Organization	("Compliance"),	which	is	independent	of	the lines	of	business,	works	closely	with	the	Operating	Committee	and	management to	provide	independent	review,	monitoring	and	oversight	of	business	operations with	a	focus	on	compliance	with	the	legal	and	regulatory	obligations	applicable to	the	offering	of	the	Firm's	products	and	services	to	clients	and	customers.

These	compliance	risks	relate	to	a	wide	variety	of	legal	and	regulatory obligations,	depending	on	the	line	of	business	and	the	jurisdiction,	and	include those	related	to	products	and	services,	relationships	and	interactions	with	clients and	customers,	and	employee	activities.

For	example,	one	compliance	risk,	fiduciary	risk,	is	the	failure	to	exercise	the applicable	high	standard	of	care,	to	act	in	the	best	interests	of	clients	or	to	treat clients	fairly,	as	required	under	applicable	law	or	regulation.	Other	specific compliance	risks	include	those	associated	with	anti-money	laundering compliance,	trading	activities,	market	conduct,	and	complying	with	the	rules	and regulations	related	to	the	offering	of	products	and	services	across	jurisdictional borders,	among	others.

Compliance	implements	various	practices	designed	to	identify	and	mitigate compliance	risk	by	implementing	policies,	testing	and	monitoring,	training	and providing	guidance.

In	recent	years,	the	Firm	has	experienced	heightened	scrutiny	by	its	regulators	of its	compliance	with	regulations,	and	with	respect	to	its	controls	and	operational processes.	In	certain	instances,	the	Firm	has	entered	into	Consent	Orders	with	its regulators	requiring	the	Firm	to	take	certain	specified	actions	to	remediate compliance	with	regulations	and	improve	its	controls.	The	Firm	expects	that such	regulatory	scrutiny	will	continue.

Compliance	is	led	by	the	Firms'	Chief	Compliance	Officer	("CCO")	who	reports directly	to	the	Firm's	COO.	The	Firm	maintains	oversight	and	coordination	in	its Compliance	Risk	Management	practices	globally	through	the	Firm's	CCO,	lines of	business	CCOs	and	regional	CCOs	to	implement	the	Compliance	program across	the	lines	of	business	and	regions.	The	Firm's	CCO	is	a	member	of	the Firmwide	Control	Committee	and	the	Firmwide	Risk	Committee.	The	Firm's CCO	also	provides	regular	updates	to	the	Audit	Committee	and	DRPC.	In addition,	from	time	to	time,	special	committees	of	the	Board	have	been established	to	oversee	the	Firm's	compliance	with	regulatory	Consent	Orders.

The	Firm	has	in	place	a	Code	of	Conduct	(the	"Code"),	and	each	employee	is given	annual	training	in	respect	of	the	Code	and	is	required	annually	to	affirm his	or	her	compliance	with	the	Code.	The	Code	sets	forth	the	Firm's	core principles	and	fundamental	values,	including	that	no	employee	should	ever sacrifice	integrity	-	or	give	the	impression	that	he	or	she	has.	The	Code	requires prompt	reporting	of	any	known	or	suspected	violation	of	the	Code,	any	internal Firm	policy,	or	any	law	or	regulation	applicable	to	the	Firm's	business.	It	also requires	the	reporting	of	any	illegal	conduct,	or	conduct	that	violates	the underlying	principles	of	the	Code,	by	any	of	the	Firm's	employees,	customers, suppliers,	contract	workers,	business	partners,	or	agents.	Specified	employees	are specially	trained	and	designated	as	"code	specialists"	who	act	as	a	resource	to employees	on	Code	of	Conduct	matters.	In	addition,	concerns	may	be	reported anonymously	and	the	Firm	prohibits	retaliation	against	employees	for	the	good faith	reporting	of	any	actual	or	suspected	violations	of	the	Code.	The	Code	and the	associated	employee	compliance	program	are	focused	on	the	regular assessment	of	certain	key	aspects	of	the	Firm's	culture	and	conduct	initiatives.

# REPUTATION	RISK	MANAGEMENT

Reputation	risk	is	the	risk	that	an	action,	transaction,	investment	or	event	will reduce	trust	in	the	Firm's	integrity	or	competence	by	our	various	constituents, including	clients,	counterparties,	investors,	regulators,	employees	and	the	broader public.	Maintaining	the	Firm's	reputation	is	the	responsibility	of	each	individual employee	of	the	Firm.	The	Firm's	Reputation	Risk	Governance	policy	explicitly vests	each	employee	with	the	responsibility	to	consider	the	reputation	of	the	Firm when	engaging	in	any	activity.	Since	the	types	of	events	that	could	harm	the Firm's	reputation	are	so	varied	across	the	Firm's	lines	of	business,	each	line	of business	has	a	separate	reputation	risk	governance	infrastructure	in	place,	which consists	of	three	key	elements:	clear,	documented	escalation	criteria	appropriate to	the	business;	a	designated	primary	discussion	forum	—	in	most	cases,	one	or more	dedicated	reputation	risk	committees;	and	a	list	of	designated	contacts,	to whom	questions	relating	to	reputation	risk	should	be	referred.	Line	of	business reputation	risk	governance	is	overseen	by	a	Firmwide	Reputation	Risk Governance	function,	which	provides	oversight	of	the	governance	infrastructure and	process	to	support	the	consistent	identification,	escalation,	management	and reporting	of	reputation	risk	issues	firmwide.

# CAPITAL	MANAGEMENT

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

A	strong	capital	position	is	essential	to	the	Firm's	business	strategy	and competitive	position.	The	Firm's	capital	strategy	focuses	on	long-term	stability, which	enables	the	Firm	to	build	and	invest	in	market-leading	businesses,	even	in a	highly	stressed	environment.	Prior	to	making	any	decisions	on	future	business activities,	senior	management	considers	the	implications	on	the	Firm's	capital.	In addition	to	considering	the	Firm's	earnings	outlook,	senior	management evaluates	all	sources	and	uses	of	capital	with	a	view	to	preserving	the	Firm's capital	strength.	Maintaining	a	strong	balance	sheet	to	manage	through	economic volatility	is	considered	a	strategic	imperative	by	the	Firm's	Board	of	Directors, CEO	and	Operating	Committee.	The	Firm's	balance	sheet	philosophy	focuses	on risk-adjusted	returns,	strong	capital	and	reserves,	and	robust	liquidity.

The	Firm's	capital	management	objectives	are	to	hold	capital	sufficient	to:

•Cover	all	material	risks	underlying	the	Firm's	business activities;

•Maintain	"well-capitalized"	status	and	meet	regulatory	capital requirements;

•Retain	flexibility	to	take	advantage	of	future	investment opportunities;

•Maintain	sufficient	capital	in	order	to	continue	to	build	and	invest	in	its businesses	through	the	cycle	and	in	stressed	environments;	and

•Distribute	excess	capital	to	shareholders	while	balancing	the	other	objectives stated	above.

These	objectives	are	achieved	through	ongoing	monitoring	and	management	of the	Firm's	capital	position,	regular	stress	testing,	and	a	capital	governance framework.	Capital	management	is	intended	to	be	flexible	in	order	to	react	to	a range	of	potential	events.	JPMorgan	Chase	has	firmwide	and	LOB	processes	for ongoing	monitoring	and	active	management	of	its	capital	position.

The	following	tables	present	the	Firm's	Transitional	and	Fully	Phased-In	risk-based	and	leverage-based	capital	metrics	under	both	Basel	III	Standardized	and	Advanced approaches.	The	Firm's	Basel	III	CET1	ratio	exceeds	the	regulatory	minimum	as	of	December	31,	2015.	For	further	discussion	of	these	capital	metrics	and	the Standardized	and	Advanced	approaches	refer	to	Monitoring	and	management	of	capital	on	pages	151–155.

Note:	As	of	December	31,	2015	and	2014,	the	lower	of	the	Standardized	or	Advanced	capital	ratios	under	each	of	the	transitional	and	fully	phased	in	approaches	in	the	table	above	represents	the	Firm's	Collins	Floor,	as	discussed	in	Monitoring and	management	of	Capital	on	page	151.

(a) The	Tier	1	leverage	ratio	is	not	a	risk-based	measure	of	capital.	This	ratio	is	calculated	by	dividing	Tier	1	capital	by	adjusted	average assets.

(b) Effective	January	1,	2015,	the	Basel	III	Standardized	RWA	is	calculated	under	the	Basel	III	definition	of	the	Standardized	approach.	Prior	periods	were	based	on	Basel	I	(inclusive	of	Basel 2.5).

(c) Represents	the	transitional	minimum	capital	ratios	applicable	to	the	Firm	under	Basel	III	as	of	December	31,	2015	and 2014.

(d) Represents	the	minimum	capital	ratios	applicable	to	the	Firm	on	a	fully	phased-in	Basel	III	basis.	At	December	31,	2015,	the	ratios	include	the	Firm's	estimate	of	its	Fully	Phased-In	U.S.	GSIB	surcharge	of	3.5%,	based	on	the	final	U.S. GSIB	rule	published	by	the	Federal	Reserve	on	July	20,	2015.	At	December	31,	2014,	the	ratios	included	the	Firm's	GSIB	surcharge	of	2.5%	which	was	published	in	November	2014	by	the	Financial	Stability	Board	and	calculated	under	the Basel	Committee	on	Banking	Supervisions	Final	GSIB	rule.	The	minimum	capital	ratios	will	be	fully	phased-in	effective	January	1,	2019.	For	additional	information	on	the	GSIB	surcharge,	see	page	152.

(e) In	the	case	of	the	SLR,	the	fully	phased-in	minimum	ratio	is	effective	beginning	January	1,

# Strategy	and	governance

The	Firm's	CEO,	in	conjunction	with	the	Board	of	Directors,	establishes principles	and	guidelines	for	capital	planning,	issuance,	usage	and	distributions, and	establishes	capital	targets	for	the	level	and	composition	of	capital	in	both business-as-usual	and	highly	stressed	environments.

The	Firm's	senior	management	recognizes	the	importance	of	a	capital management	function	that	supports	strategic	decision-making.	The	Capital Governance	Committee	and	the	Regulatory	Capital	Management	Office ("RCMO")	are	key	components	in	support	of	this	objective.	The	Capital Governance	Committee	is	responsible	for	reviewing	the	Firm's	Capital Management	Policy	and	the	principles	underlying	capital	issuance	and distribution	alternatives.	The	Committee	is	also	responsible	for	governing	the capital	adequacy	assessment	process,	including	overall	design,	assumptions	and risk	streams,	and	ensuring	that	capital	stress	test	programs	are	designed	to adequately	capture	the	idiosyncratic	risks	across	the	Firm's	businesses.	RCMO, which	reports	to	the	Firm's	CFO,	is	responsible	for	reviewing,	approving	and monitoring	the	implementation	of	the	Firm's	capital	policies	and	strategies,	as well	as	its	capital	adequacy	assessment	process.	The	review	assesses	the effectiveness	of	the	capital	adequacy	process,	the	appropriateness	of	the	risk tolerance	levels,	and	the	strength	of	the	control	infrastructure.	The	DRPC oversees	the	Firm's	capital	adequacy	process	and	its	components.	The	Basel Independent	Review	function	("BIR"),	which	reports	to	the	RCMO	and	the Capital	Governance	Committee,	conducts	independent	assessments	of	the	Firm's regulatory	capital	framework	to	ensure	compliance	with	the	applicable	U.S. Basel	rules	in	support	of	the	DRPC's	and	senior	management's	oversight	of	the Firm's	capital	processes.	For	additional	discussion	on	the	DRPC,	see	Enterprise- wide	Risk	Management	on	pages	107–111.

# Monitoring	and	management	of	capital

In	its	monitoring	and	management	of	capital,	the	Firm	takes	into	consideration an	assessment	of	economic	risk	and	all	regulatory	capital	requirements	to determine	the	level	of	capital	needed	to	meet	and	maintain	the	objectives discussed	above,	as	well	as	to	support	the	framework	for	allocating	capital	to	its business	segments.	While	economic	risk	is	considered	prior	to	making	decisions on	future	business	activities,	in	most	cases,	the	Firm	considers	risk-based regulatory	capital	to	be	a	proxy	for	economic	risk	capital.

# Regulatory	capital

The	Federal	Reserve	establishes	capital	requirements,	including	well	capitalized standards,	for	the	consolidated	financial	holding	company.	The	OCC	establishes similar	minimum	capital	requirements	for	the	Firm's	national	banks,	including JPMorgan	Chase	Bank,	N.A.	and	Chase	Bank	USA,	N.A.

The	U.S.	capital	requirements	generally	follow	the	Capital	Accord	of	the	Basel Committee,	as	amended	from	time	to	time.	Prior	to	January	1,	2014,	the	Firm and	its	banking	subsidiaries	were	subject	to	the	capital	requirements	of	Basel	I and	Basel	2.5.	Effective	January	1,	2014,	the	Firm	became	subject	to	Basel	III (which	incorporates	Basel	2.5).

# Basel	III	overview

Basel	III	capital	rules,	for	large	and	internationally	active	U.S.	bank	holding companies	and	banks,	including	the	Firm	and	its	insured	depository	institution ("IDI")	subsidiaries,	revised,	among	other	things,	the	definition	of	capital	and introduced	a	new	CET1	capital	requirement.	Basel	III	presents	two comprehensive	methodologies	for	calculating	RWA,	a	general	(Standardized) approach,	which	replaced	Basel	I	RWA	effective	January	1,	2015	("Basel	III Standardized")	and	an	advanced	approach,	which	replaced	Basel	II	RWA ("Basel	III	Advanced");	and	sets	out	minimum	capital	ratios	and	overall	capital adequacy	standards.	Certain	of	the	requirements	of	Basel	III	are	subject	to	phase- in	periods	that	began	on	January	1,	2014	and	continue	through	the	end	of	2018 ("transitional	period").

The	capital	adequacy	of	the	Firm	and	its	national	bank	subsidiaries	is	evaluated against	the	Basel	III	approach	(Standardized	or	Advanced)	which	results	in	the lower	ratio	(the	"Collins	Floor"),	as	required	by	the	Collins	Amendment	of	the Dodd-Frank	Act.

Basel	III	establishes	capital	requirements	for	calculating	credit	risk	and	market risk	RWA,	and	in	the	case	of	Basel	III	Advanced,	operational	risk	RWA.	Key differences	in	the	calculation	of	credit	risk	RWA	between	the	Standardized	and Advanced	approaches	are	that	for	Basel	III	Advanced,	credit	risk	RWA	is	based on	risk-sensitive	approaches	which	largely	rely	on	the	use	of	internal	credit models	and	parameters,	whereas	for	Basel	III	Standardized,	credit	risk	RWA	is generally	based	on	supervisory	risk-weightings	which	vary	primarily	by counterparty	type	and	asset	class.	Market	risk	RWA	is	calculated	on	a	generally consistent	basis	between	Basel	III	Standardized	and	Basel	III	Advanced,	both	of which	incorporate	the	requirements	set	forth	in	Basel	2.5.	In	addition	to	the RWA	calculated	under	these	methodologies,	the	Firm	may	supplement	such amounts	to	incorporate	management	judgment	and	feedback	from	its	bank regulators.

Basel	III	also	includes	a	requirement	for	Advanced	Approach	banking organizations,	including	the	Firm,	to	calculate	a	Supplementary	Leverage	Ratio ("SLR").	For	additional	information	on	SLR,	see	page	155.

# Basel	III	Fully	Phased-In

Basel	III	capital	rules	will	become	fully	phased-in	on	January	1,	2019,	at	which point	the	Firm	will	continue	to	calculate	its	capital	ratios	under	both	the	Basel	III Standardized	and	Advanced	Approaches.	While	the	Firm	has	imposed	Basel	III Standardized	Fully	Phased-In	RWA	limits	on	its	lines	of	business,	the	Firm continues	to	manage	each	of	the	businesses	(including	line	of	business	equity allocations),	as	well	as	the	corporate	functions,	primarily	on	a	Basel	III Advanced	Fully	Phased-In	basis.

The	Firm's	capital,	RWA	and	capital	ratios	that	are	presented	under	Basel	III Standardized	and	Advanced	Fully	Phased-In	rules	and	the	Firm's	and	JPMorgan Chase	Bank,	N.A.'s	and	Chase	Bank	USA,	N.A.'s	SLRs	calculated	under	the Basel	III	Advanced	Fully	Phased-In	rules	are	non-GAAP	financial	measures. However,	such	measures	are	used	by	banking	regulators,	investors	and	analysts to	assess	the

Firm's	capital	position	and	to	compare	the	Firm's	capital	to	that	of	other financial	services	companies.

The	Firm's	estimates	of	its	Basel	III	Standardized	and	Advanced	Fully	Phased-In capital,	RWA	and	capital	ratios	and	of	the	Firm's,	JPMorgan	Chase	Bank, N.A.'s,	and	Chase	Bank	USA,	N.A.'s	SLRs	reflect	management's	current understanding	of	the	U.S.	Basel	III	rules	based	on	the	current	published	rules	and on	the	application	of	such	rules	to	the	Firm's	businesses	as	currently	conducted. The	actual

impact	on	the	Firm's	capital	ratios	and	SLR	as	of	the	effective	date	of	the	rules may	differ	from	the	Firm's	current	estimates	depending	on	changes	the	Firm may	make	to	its	businesses	in	the	future,	further	implementation	guidance	from the	regulators,	and	regulatory	approval	of	certain	of	the	Firm's	internal	risk models	(or,	alternatively,	regulatory	disapproval	of	the	Firm's	internal	risk models	that	have	previously	been	conditionally	approved).

# Risk-based	capital	regulatory	minimums

The	following	chart	presents	the	Basel	III	minimum	CET1	capital	ratio	during	the	transitional	periods	and	on	a	fully	phased-in	basis	under	the	Basel	III	rules	currently	in effect.

At	December	31,	2015	and	2014,	JPMorgan	Chase	maintained	Basel	III Standardized	Transitional	and	Basel	III	Advanced	Transitional	capital	ratios	in excess	of	the	well-capitalized	standards	established	by	the	Federal	Reserve. Additional	information	regarding	the	Firm's	capital	ratios,	as	well	as	the	U.S. federal	regulatory	capital	standards	to	which	the	Firm	is	subject,	is	presented	in Note	28.	For	further	information	on	the	Firm's	Basel	III	measures,	see	the	Firm's Pillar	3	Regulatory	Capital	Disclosures	reports,	which	are	available	on	the Firm's	website	(http://investor.shareholder.com/jpmorganchase/basel.cfm).

All	banking	institutions	are	currently	required	to	have	a	minimum	capital	ratio	of 4.5%	of	CET1	capital.	Certain	banking	organizations,	including	the	Firm,	will	be required	to	hold	additional	amounts	of	capital	to	serve	as	a	"capital	conservation buffer."	The	capital	conservation	buffer	is	intended	to	be	used	to	absorb	potential losses	in	times	of	financial	or	economic	stress.	If	not	maintained,	the	Firm	could be	limited	in	the	amount	of	capital	that	may	be	distributed,	including	dividends and	common	equity	repurchases.	The	capital	conservation	buffer	is	to	be	phased- in	over	time,	beginning	January	1,	2016	through	January	1,	2019.

When	fully	phased-in,	the	capital	conservation	buffer	requires	an	additional 2.5%	of	CET1	capital,	as	well	as	additional	levels	of	capital	in	the	form	of	a GSIB	surcharge	and	the	recently	implemented	countercyclical	capital	buffer.	On July	20,	2015,	the	Federal	Reserve	issued	a	final	rule	requiring	GSIBs	to calculate	their	GSIB	surcharge,	on	an	annual	basis,	under	two	separately prescribed	methods,	and	to	be	subject	to	the	higher	of	the	two.	The	first	method ("Method	1")	reflects	the	GSIB	surcharge	as	prescribed	by	Basel	rules,	and	is calculated	across	five	criteria:	size,	cross-jurisdictional	activity, interconnectedness,	complexity	and	substitutability.	The	second	method ("Method	2")	modifies	the	requirements	to	include	a	measure	of	short-term wholesale	funding	in	place	of	substitutability,	and	introduces	a	GSIB	score "multiplication	factor."	Based	upon	data	as	of	December	31,	2015,	the	Firm estimates	its	fully	phased-in	GSIB	surcharge	would	be	2%	of	CET1	capital under	Method	1	and	3.5%	under	Method	2.	On	July	20,	2015,	the	date	of	the	last published	estimate,	the	Federal	Reserve	had	estimated	the	Firm's	GSIB surcharge	to	be	2.5%	under	Method	1	and	4.5%	under	Method	2	as	of	December 31,	2014.

The	countercyclical	capital	buffer	is	a	potential	expansion	of	the	capital conservation	buffer	that	takes	into	account	the	macro	financial	environment	in which	large,	internationally	active	banks	function.	As	of	December	31,	2015	the Federal	Reserve	reaffirmed	setting	the	U.S.	countercyclical	capital	buffer	at	0%, and	stated	that	it	will	review	the	amount	at	least	annually.	The	countercyclical capital	buffer	can	be	increased	if	the	Federal	Reserve,	FDIC	and	OCC	determine that	credit	growth	in	the	economy	has	become	excessive	and	can	be	set	at	up	to an	additional	2.5%	of	RWA.	On	December	21,	2015,	the	Federal	Reserve,	in conjunction	with	the	FDIC	and	OCC,	requested	public	comment,	due	March	21, 2016,	on	a	proposed	policy	statement	detailing	the	framework	that	would	be followed	in	setting	the	U.S.	Basel	III	countercyclical	capital	buffer.

Based	on	the	Firm's	most	recent	estimate	of	its	GSIB	surcharge	and	the	current countercyclical	buffer	being	set	at	0%,	the	Firm	estimates	its	fully	phased-in capital	conservation	buffer	would	be	6%.

As	well	as	meeting	the	capital	ratio	requirements	of	Basel	III,	the	Firm	must,	in order	to	be	"well-capitalized",	maintain	a	minimum	6%	Tier	1	and	a	10%	Total capital	requirement.	Each	of	the	Firm's	IDI	subsidiaries	must	maintain	a minimum	5%	Tier	1	leverage,	6.5%	CET1,	8%	Tier	1	and	10%	Total	capital standard	to	meet	the	definition	of	"well-capitalized"	under	the	Prompt	Corrective Action	("PCA")	requirements	of	the	FDIC	Improvement	Act("FDICIA")	for	IDI subsidiaries.	The	PCA	standards	for	IDI	subsidiaries	were	effective	January	1, 2015.

A	reconciliation	of	total	stockholders'	equity	to	Basel	III	Standardized	and Advanced	Fully	Phased-In	CET1	capital,	Tier	1	capital	and	Total	capital	is presented	in	the	table	below.	Beginning	July	21,	2015,	the	Volcker	Rule provisions	regarding	the	prohibitions	against	proprietary	trading	and	holding ownership	interests	in	or	sponsoring	"covered	funds"	became	effective.	The deduction	from	Basel	III	Tier	1	capital	associated	with	the	permissible	holdings of	covered	funds	acquired	after	December	31,	2013	was	not	material	as	of December	31,	2015.	For	additional	information	on	the	components	of	regulatory capital,	see	Note	28.

# Capital	components

| capital,	see	Note	28. |  |
| :--- | :--- |
| Capital\tcomponents |  |
| (in\tmillions) | December\t31,\t2015 |
| Total\tstockholders'\tequity | $247,573 |
| Less:\tPreferred\tstock | 26,068 |
| Common\tstockholders'\tequity | 221,505 |
| Less: |  |
| Goodwill | 47,325 |
| Other\tintangible\tassets | 1,015 |
| Add: |  |
| Deferred\ttax\tliabilities(a) | 3,148 |
| Less:\tOther\tCET1\tcapital\tadjustments | 3,124 |
| Standardized/Advanced\tCET1\tcapital | 173,189 |
| Preferred\tstock | 26,068 |
| Less: |  |
| Other\tTier\t1\tadjustments | 210 |
| Standardized/Advanced\tTier\t1\tcapital | $199,047 |
| Long-term\tdebt\tand\tother\tinstruments\tqualifying\tas\nTier\t2\tcapital | $16,679 |
| Qualifying\tallowance\tfor\tcredit\tlosses | 14,341 |
| Other | (91) |
| Standardized\tFully\tPhased-In\tTier\t2\tcapital | $30,929 |
| Standardized\tFully\tPhased-in\tTotal\tcapital | $229,976 |
| Adjustment\tin\tqualifying\tallowance\tfor\tcredit\tlosses\tfor\tAdvanced\tTier\n2\tcapital | (9,797) |
| Advanced\tFully\tPhased-In\tTier\t2\tcapital | $21,132 |
| Advanced\tFully\tPhased-In\tTotal\tcapital | $220,179 |

The	following	table	presents	a	reconciliation	of	the	Firm's	Basel	III	Transitional CET1	capital	to	the	Firm's	estimated	Basel	III	Fully	Phased-In	CET1	capital	as of	December	31,	2015.

| (in	millions) | December	31,	2015 |
| :--- | :--- |
| Transitional\tCET1\tcapital | $175,398 |
| AOCI\tphase-in(a) | 427 |
| CET1\tcapital\tdeduction\tphase-in(b) | (2,005) |
| Intangible\tassets\tdeduction\tphase-in (c) | (546) |
| Other\tadjustments\tto\tCET1\tcapital(d) | (85) |
| Fully\tPhased-In\tCET1\tcapital | $173,189 |

(a) Includes	the	remaining	balance	of	AOCI	related	to	AFS	debt	securities	and	defined	benefit pension	and	other	postretirement	employee	benefit	("OPEB")	plans	that	will	qualify	as Basel	III	CET1	capital	upon	full	phase-in.

(b) Predominantly	includes	regulatory	adjustments	related	to	changes	in	FVA/DVA,	as	well	as CET1	deductions	for	defined	benefit	pension	plan	assets	and	deferred	tax	assets	related	to net	operating	loss	and	tax	credit	carryforwards.

(c) Relates	to	intangible	assets,	other	than	goodwill	and	MSRs,	that	are	required	to	be	deducted from	CET1	capital	upon	full	phase-in.

(d) Includes	minority	interest	and	the	Firm's	investments	in	its	own	CET1	capital	instruments.

# Capital	rollforward

The	following	table	presents	the	changes	in	Basel	III	Fully	Phased-In	CET1 capital,	Tier	1	capital	and	Tier	2	capital	for	the	year	ended	December	31,	2015.

| Year	Ended	December	31,	(in	millions) | 2015 |
| :--- | :--- |
| Standardized/Advanced\tCET1\tcapital\tat\tDecember\t31,\t2014 | $164,514 |
| Net\tincome\tapplicable\tto\tcommon\tequity | 22,927 |
| Dividends\tdeclared\ton\tcommon\tstock | (6,484) |
| Net\tpurchase\tof\ttreasury\tstock | (3,835) |
| Changes\tin\tadditional\tpaid-in\tcapital | (770) |
| Changes\trelated\tto\tAOCI | (2,116) |
| Adjustment\trelated\tto\tFVA/DVA | (454) |
| Other | (593) |
| Increase\tin\tStandardized/Advanced\tCET1\tcapital | 8,675 |
| Standardized/Advanced\tCET1\tcapital\tat\tDecember\t31,\t2015 | $173,189 |
| Standardized/Advanced\tTier\t1\tcapital\tat\tDecember\t31,\t2014 | $184,572 |
| Change\tin\tCET1\tcapital | 8,675 |
| Net\tissuance\tof\tnoncumulative\tperpetual\tpreferred\tstock | 6,005 |
| Other | (205) |
| Increase\tin\tStandardized/Advanced\tTier\t1\tcapital | 14,475 |
| Standardized/Advanced\tTier\t1\tcapital\tat\tDecember\t31,\t2015 | $199,047 |
| Standardized\tTier\t2\tcapital\tat\tDecember\t31,\t2014 | $32,147 |
| Change\tin\tlong-term\tdebt\tand\tother\tinstruments\tqualifying\tas\tTier\t2 | (748) |
| Change\tin\tqualifying\tallowance\tfor\tcredit\tlosses | (466) |
| Other | (4) |
| Increase\tin\tStandardized\tTier\t2\tcapital | (1,218) |
| Standardized\tTier\t2\tcapital\tat\tDecember\t31,\t2015 | $30,929 |
| Standardized\tTotal\tcapital\tat\tDecember\t31,\t2015 | $229,976 |
| Advanced\tTier\t2\tcapital\tat\tDecember\t31,\t2014 | $21,607 |
| Change\tin\tlong-term\tdebt\tand\tother\tinstruments\tqualifying\tas\tTier\t2 | (748) |
| Change\tin\tqualifying\tallowance\tfor\tcredit\tlosses | 277 |
| Other | (4) |
| Increase\tin\tAdvanced\tTier\t2\tcapital | (475) |
| Advanced\tTier\t2\tcapital\tat\tDecember\t31,\t2015 | $21,132 |
| Advanced\tTotal\tcapital\tat\tDecember\t31,\t2015 | $220,179 |

# RWA	rollforward

The	following	table	presents	changes	in	the	components	of	RWA	under	Basel	III	Standardized	and	Advanced	Fully	Phased-In	for	the	year	ended	December	31,	2015.

The	amounts	in	the	rollforward	categories	are	estimates,	based	on	the	predominant	driver	of	the	change.

|  |  | Standardized |  |  | Advanced | Advanced |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2015\n(in\tbillions) | Credit\trisk\tRWA | Market\trisk\tRWA | Total\tRWA | Credit\trisk\tRWA | Market\trisk\tRWA | Operational\trisk\nRWA | Total\tRWA |
| December\t31,\t2014 | $1,381 | $180 | $1,561 | $1,040 | $179 | $400 | $1,619 |
| Model\t&amp;\tdata\tchanges(a) | (17) | (15) | (32) | (38) | (15) | — | (53) |
| Portfolio\trunoff(b) | (13) | (8) | (21) | (21) | (8) | — | (29) |
| Movement\tin\tportfolio\tlevels(c) | (18) | (15) | (33) | (27) | (14) | — | (41) |
| Changes\tin\tRWA | (48) | (38) | (86) | (86) | (37) | — | (123) |
| December\t31,\t2015 | $1,333 | $142 | $1,475 | $954 | $142 | $400 | $1,496 |

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

(b) Portfolio	runoff	for	credit	risk	RWA	reflects	reduced	risk	from	position	rolloffs	in	legacy	portfolios	in	Mortgage	Banking,	(primarily	under	the	Advanced	framework)	and	Broker	Dealer	Services	(primarily	under	the Standardized	framework);	and	for	market	risk	RWA	reflects	reduced	risk	from	position	rolloffs	in	legacy	portfolios	in	the	wholesale	businesses.

(c) Movement	in	portfolio	levels	for	credit	risk	RWA	refers	to	changes	in	book	size,	composition,	credit	quality,	and	market	movements;	and	for	market	risk	RWA	refers	to	changes	in	position	and	market	movements.

# Supplementary	leverage	ratio

The	SLR	is	defined	as	Tier	1	capital	under	Basel	III	divided	by	the	Firm's	total leverage	exposure.	Total	leverage	exposure	is	calculated	by	taking	the	Firm's total	average	on-balance	sheet	assets,	less	amounts	permitted	to	be	deducted	for Tier	1	capital,	and	adding	certain	off-balance	sheet	exposures,	such	as	undrawn commitments	and	derivatives	potential	future	exposure.

On	September	3,	2014,	the	U.S.	banking	regulators	adopted	a	final	rule	for	the calculation	of	the	SLR.	The	U.S.	final	rule	requires	public	disclosure	of	the	SLR beginning	with	the	first	quarter	of	2015,	and	also	requires	U.S.	bank	holding companies,	including	the	Firm,	to	have	a	minimum	SLR	of	5%	and	IDI subsidiaries,	including	JPMorgan	Chase	Bank,	N.A.	and Chase	Bank	USA,	N.A.,	to	have	a	minimum	SLR	of	6%,	both	beginning	January 1,	2018.	As	of	December	31,	2015,	the	Firm	estimates	that	JPMorgan	Chase Bank,	N.A.'s	and	Chase	Bank	USA,	N.A.'s	Fully	Phased-In	SLRs	are approximately	6.6%	and	8.3%,	respectively.

The	following	table	presents	the	components	of	the	Firm's	Fully	Phased-In	SLR, a	non-GAAP	financial	measure,	as	of	December	31,	2015.

| (in	millions,	except	ratio) | December	31,	2015 |
| :--- | :--- |
| Fully\tPhased-in\tTier\t1\tCapital | $199,047 |
| Total\taverage\tassets | 2,408,253 |
| Less:\tamounts\tdeducted\tfrom\tTier\t1\tcapital | 47,754 |
| Total\tadjusted\taverage\tassets(a) | 2,360,499 |
| Off-balance\tsheet\texposures(b) | 718,620 |
| SLR\tleverage\texposure | $3,079,119 |
| SLR | 6.5% |

(a) Adjusted	average	assets,	for	purposes	of	calculating	the	SLR,	includes	total	quarterly average	assets	adjusted	for	on-balance	sheet	assets	that	are	subject	to	deduction	from	Tier	1 capital,	predominantly	goodwill	and	other	intangible	assets.

(b) Off-balance	sheet	exposures	are	calculated	as	the	average	of	the	three	month-end	spot balances	in	the	reporting	quarter.

# Planning	and	stress	testing

# Comprehensive	Capital	Analysis	and	Review

The	Federal	Reserve	requires	large	bank	holding	companies,	including	the	Firm, to	submit	a	capital	plan	on	an	annual	basis.	The	Federal	Reserve	uses	the	CCAR and	Dodd-Frank	Act	stress	test	processes	to	ensure	that	large	bank	holding companies	have	sufficient	capital	during	periods	of	economic	and	financial stress,	and	have	robust,	forward-looking	capital	assessment	and	planning processes	in	place	that	address	each	bank	holding	company's	("BHC")	unique risks	to	enable	them	to	have	the	ability	to	absorb	losses	under	certain	stress scenarios.	Through	the	CCAR,	the	Federal	Reserve	evaluates	each	BHC's	capital adequacy	and	internal	capital	adequacy	assessment	processes,	as	well	as	its	plans to	make	capital	distributions,	such	as	dividend	payments	or	stock	repurchases.

On	March	11,	2015,	the	Federal	Reserve	informed	the	Firm	that	it	did	not	object, on	either	a	quantitative	or	qualitative	basis,	to	the	Firm's	2015	capital	plan.	For information	on	actions	taken	by	the	Firm's	Board	of	Directors	following	the 2015	CCAR	results,	see	Capital	actions	on	page	157.

For	2016,	the	Federal	Reserve	revised	the	capital	plan	cycle	for	the	CCAR process.	Under	the	revised	time	line,	the	Firm	is	required	to	submit	its	2016 capital	plan	to	the	Federal	Reserve	by	April	5,	2016.	The	Federal	Reserve	has indicated	that	it	expects	to	respond	to	the	capital	plan	submissions	of	bank holding	companies	by	June	30,	2016.

The	Firm's	CCAR	process	is	integrated	into	and	employs	the	same methodologies	utilized	in	the	Firm's	ICAAP	process,	as	discussed	below.

# Internal	Capital	Adequacy	Assessment	Process

Semiannually,	the	Firm	completes	the	ICAAP,	which	provides	management	with a	view	of	the	impact	of	severe	and	unexpected	events	on	earnings,	balance	sheet positions,	reserves	and	capital.	The	Firm's	ICAAP	integrates	stress	testing protocols	with	capital	planning.

The	process	assesses	the	potential	impact	of	alternative	economic	and	business scenarios	on	the	Firm's	earnings	and	capital.	Economic	scenarios,	and	the parameters	underlying	those	scenarios,	are	defined	centrally	and	applied uniformly	across	the	businesses.	These	scenarios	are	articulated	in	terms	of macroeconomic	factors,	which	are	key	drivers	of	business	results;	global	market shocks,	which	generate	short-term	but	severe	trading	losses;	and	idiosyncratic operational	risk	events.	The	scenarios	are	intended	to	capture	and	stress	key vulnerabilities	and	idiosyncratic	risks	facing	the	Firm.	However,	when	defining	a broad	range	of	scenarios,	realized	events	can	always	be	worse.	Accordingly, management	considers	additional	stresses	outside	these	scenarios,	as	necessary. ICAAP	results	are	reviewed	by	management	and	the	Board	of	Directors.

# Line	of	business	equity

The	Firm's	framework	for	allocating	capital	to	its	business	segments	(line	of business	equity)	is	based	on	the	following	objectives:

•Integrate	firmwide	and	line	of	business	capital	management activities;

•Measure	performance	consistently	across	all	lines	of	business; and

•Provide	comparability	with	peer	firms	for	each	of	the	lines	of business.

Each	business	segment	is	allocated	capital	by	taking	into	consideration	stand- alone	peer	comparisons,	regulatory	capital	requirements	(as	estimated	under Basel	III	Advanced	Fully	Phased-In)	and	economic	risk.	Capital	is	also	allocated to	each	line	of	business	for,	among	other	things,	goodwill	and	other	intangibles associated	with	acquisitions	effected	by	the	line	of	business.	ROE	is	measured and	internal	targets	for	expected	returns	are	established	as	key	measures	of	a business	segment's	performance.

| (in	billions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Consumer\t&amp;\tCommunity\tBanking | $51.0 | $51.0 | $46.0 |
| Corporate\t&amp;\tInvestment\tBank | 62.0 | 61.0 | 56.5 |
| Commercial\tBanking | 14.0 | 14.0 | 13.5 |
| Asset\tManagement | 9.0 | 9.0 | 9.0 |
| Corporate | 79.7 | 72.4 | 71.4 |
| Total\tcommon\tstockholders'\tequity | $215.7 | $207.4 | $196.4 |

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.	The	line	of	business	equity	allocations	are	updated	as refinements	are	implemented.	The	table	below	reflects	the	Firm's	assessed	level of	capital	required	for	each	line	of	business	as	of	the	dates	indicated.

| Line	of	business	equity | January	1, | December	31, |  |
| :--- | :--- | :--- | :--- |
| (in\tbillions) | \t2016 | 2015 | 2014 |
| Consumer\t&amp;\tCommunity\tBanking | $51.0 | $51.0 | $51.0 |
| Corporate\t&amp;\tInvestment\tBank | 64.0 | 62.0 | 61.0 |
| Commercial\tBanking | 16.0 | 14.0 | 14.0 |
| Asset\tManagement | 9.0 | 9.0 | 9.0 |
| Corporate | 81.5 | 85.5 | 76.7 |
| Total\tcommon\tstockholders'\tequity | $221.5 | $221.5 | $211.7 |

# Other	capital	requirements

# Minimum	Total	Loss	Absorbing	Capacity

In	November	2015,	the	Financial	Stability	Board	("FSB")	finalized	the	TLAC standard	for	GSIBs,	which	establishes	the	criteria	for	TLAC	eligible	debt	and capital	instruments	and	defines	the	minimum	requirements	for	amounts	of	loss absorbing	and	recapitalization	capacity.	This	amount	and	type	of	debt	and	capital instruments	is	intended	to	effectively	absorb	losses,	as	necessary,	upon	the failure	of	a	GSIB,	without	imposing	such	losses	on	taxpayers	of	the	relevant jurisdiction	or	causing	severe	systemic	disruptions,	and	thereby	ensuring	the continuity	of	the	GSIB's	critical	functions.	The	final	standard	will	require	GSIBs to	meet	a	common	minimum	TLAC	requirement	of	16%	of	the	financial institution's	RWA,	effective	January	1,	2019,	and	at	least	18%	effective	January 1,	2022.	The	minimum	TLAC	must	also	be	at	least	6%	of	a	financial institution's	Basel	III	leverage	ratio	denominator,	effective	January	1,	2019,	and at	least	6.75%	effective	January	1,	2022.

On	October	30,	2015,	the	Federal	Reserve	issued	proposed	rules	that	would require	the	top-tier	holding	companies	of	eight	U.S.	global	systemically important	bank	holding	companies,	including	the	Firm,	among	other	things,	to maintain	minimum	levels	of	eligible	TLAC	and	long-term	debt	satisfying	certain eligibility	criteria	("eligible	LTD")	commencing	January	1,	2019.	Under	the proposal,	these	eight	U.S	GSIBs		would	be	required	to	maintain	minimum	TLAC of	no	less	than	18%	of	the	financial	institution's	RWA	or	9.5%	of	its	leverage exposure	(as	defined	by	the	rules),	plus	in	the	case	of	the	RWA-based	measure,	a TLAC	buffer	that	is	equal	to	2.5%	of	the	financial	institution's	CET1,	any applicable	countercyclical	buffer	and	the	financial	institution's	GSIB	surcharge as	calculated	under	method	1.	The	minimum	level	of	eligible	LTD	that	would	be required	to	be	maintained	by	these	eight	U.S.	GSIBs	would	be	equal	to	the greater	of	(A)	6%	of	the	financial	institution's	RWA,	plus	the	higher	of	the method	1	or	method	2	GSIB	surcharge	applicable	to	the	institution	and	(B)	4.5% of	its	leverage	exposure	(as	defined	by	the	rules).	These	proposed	TLAC	Rules would	disqualify	from	eligible	LTD,	among	other	instruments,	senior	debt securities	that	permit	acceleration	for	reasons	other	than	insolvency	or	payment default,	as	well	as	structured	notes	and	debt	securities	not	governed	by	U.S.	law. The	Firm	is	currently	evaluating	the	impact	of	the	proposal.

# Capital	actions

# Dividends

The	Firm's	common	stock	dividend	policy	reflects	JPMorgan	Chase's	earnings outlook,	desired	dividend	payout	ratio,	capital	objectives,	and	alternative investment	opportunities.

Following	receipt	on	March	11,	2015,	of	the	Federal	Reserve's	non-objection	to the	Firm's	2015	capital	plan	submitted	under	its	CCAR,	the	Firm	announced that	its	Board	of	Directors	increased	the	quarterly	common	stock	dividend	to $0.44	per	share,	effective	with	the	dividend	paid	on	July	31,	2015.	The	Firm's dividends	are	subject	to	the	Board	of	Directors'	approval	at	the	customary	times those	dividends	are	declared.

For	information	regarding	dividend	restrictions,	see	Note	22	and	Note	27.

The	following	table	shows	the	common	dividend	payout	ratio	based	on	reported net	income.

# Common	equity

During	the	year	ended	December	31,	2015,	warrant	holders	exercised	their	right to	purchase	12.4	million	shares	of	the	Firm's	common	stock.	The	Firm	issued 4.7	million	shares	of	its	common	stock	as	a	result	of	these	exercises.	As	of December	31,	2015,	47.4	million	warrants	remained	outstanding,	compared	with 59.8	million	outstanding	as	of	December	31,	2014.

On	March	11,	2015,	in	conjunction	with	the	Federal	Reserve's	release	of	its	2015 CCAR	results,	the	Firm's	Board	of	Directors	authorized	a	$6.4	billion	common equity	(i.e.,	common	stock	and	warrants)	repurchase	program.	As	of December	31,	2015,	$2.7	billion	(on	a	settlement-date	basis)	of	authorized repurchase	capacity	remained	under	the	program.	This	authorization	includes shares	repurchased	to	offset	issuances	under	the	Firm's	equity-based compensation	plans.

The	following	table	sets	forth	the	Firm's	repurchases	of	common	equity	for	the years	ended	December	31,	2015,	2014	and	2013,	on	a	settlement-date	basis. There	were	no	warrants	repurchased	during	the	years	ended	December	31,	2015, 2014,	and	2013.

| Year	ended	December	31,	(in	millions)<br>Total	number	of	shares	of	common	stock<br>repurchased | 2015<br>89.8 | 2014<br>82.3 | 2013<br>96.1 |
| :--- | :--- | :--- | :--- |
| Aggregate\tpurchase\tprice\tof\tcommon\tstock\nrepurchases | $5,616 | $4,760 | $4,789 |

The	Firm	may,	from	time	to	time,	enter	into	written	trading	plans	under	Rule 10b5-1	of	the	Securities	Exchange	Act	of	1934	to	facilitate	repurchases	in accordance	with	the	common	equity	repurchase	program.	A	Rule	10b5-1 repurchase	plan	allows	the	Firm	to	repurchase	its	equity	during	periods	when	it would	not	otherwise	be	repurchasing	common	equity	—	for	example,	during internal	trading	"blackout	periods."	All	purchases	under	a	Rule	10b5-1	plan must	be	made	according	to	a	predefined	plan	established

when	the	Firm	is	not	aware	of	material	nonpublic	information.

The	authorization	to	repurchase	common	equity	will	be	utilized	at	management's discretion,	and	the	timing	of	purchases	and	the	exact	amount	of	common	equity that	may	be	repurchased	is	subject	to	various	factors,	including	market conditions;	legal	and	regulatory	considerations	affecting	the	amount	and	timing of	repurchase	activity;	the	Firm's	capital	position	(taking	into	account	goodwill and	intangibles);	internal	capital	generation;	and	alternative	investment opportunities.	The	repurchase	program	does	not	include	specific	price	targets	or timetables;	may	be	executed	through	open	market	purchases	or	privately negotiated	transactions,	or	utilize	Rule	10b5-1	programs;	and	may	be	suspended at	any	time.

For	additional	information	regarding	repurchases	of	the	Firm's	equity	securities, see	Part	II,	Item	5:	Market	for	registrant's	common	equity,	related	stockholder matters	and	issuer	purchases	of	equity	securities	on	page	20.

# Preferred	stock

During	the	year	ended	December	31,	2015,	the	Firm	issued	$6.0	billion	of noncumulative	preferred	stock.	Preferred	stock	dividends	declared	were	$1.5 billion	for	the	year	ended	December	31,	2015.	Assuming	all	preferred	stock issuances	were	outstanding	for	the	entire	year	and	quarterly	dividends	were declared	on	such	issuances,	preferred	stock	dividends	would	have	been	$1.6 billion	for	the	year	ended	December	31,	2015.	For	additional	information	on	the Firm's	preferred	stock,	see	Note	22.

# Redemption	of	outstanding	trust	preferred	securities

On	April	2,	2015,	the	Firm	redeemed	$1.5	billion,	or	100%	of	the	liquidation amount,	of	JPMorgan	Chase	Capital	XXIX	trust	preferred	securities.	On	May	8, 2013,	the	Firm	redeemed	approximately	$5.0	billion,	or	100%	of	the	liquidation amount,	of	the	following	eight	series	of	trust	preferred	securities:	JPMorgan Chase	Capital	X,	XI,	XII,	XIV,	XVI,	XIX,	XXIV,	and	BANK	ONE	Capital	VI. For	a	further	discussion	of	trust	preferred	securities,	see	Note	21.

# Broker-dealer	regulatory	capital

JPMorgan	Chase's	principal	U.S.	broker-dealer	subsidiaries	are	JPMorgan Securities	and	J.P.	Morgan	Clearing	Corp.	("JPMorgan	Clearing"). JPMorgan	Clearing	is	a	subsidiary	of	JPMorgan	Securities	and	provides	clearing and	settlement	services.	JPMorgan	Securities	and	JPMorgan	Clearing	are	each subject	to	Rule	15c3-1	under	the	Securities	Exchange	Act	of	1934	(the	"Net Capital	Rule").	JPMorgan	Securities	and	JPMorgan	Clearing	are	also	each registered	as	futures	commission	merchants	and	subject	to	Rule	1.17	of	the Commodity	Futures	Trading	Commission	("CFTC").

JPMorgan	Securities	and	JPMorgan	Clearing	have	elected	to	compute	their minimum	net	capital	requirements	in	accordance	with	the	"Alternative	Net Capital	Requirements"	of	the	Net	Capital	Rule.	At	December	31,	2015, JPMorgan	Securities'	net	capital,	as	defined	by	the	Net	Capital	Rule,	was	$14.2 billion,	exceeding	the	minimum	requirement	by	$11.9	billion,	and	JPMorgan Clearing's	net	capital	was	$7.7	billion,	exceeding	the	minimum	requirement	by $6.2	billion.

In	addition	to	its	minimum	net	capital	requirement,	JPMorgan	Securities	is required	to	hold	tentative	net	capital	in	excess	of	$1.0	billion	and	is	also	required to	notify	the	Securities	and	Exchange	Commission	("SEC")	in	the	event	that tentative	net	capital	is	less	than	$5.0	billion,	in	accordance	with	the	market	and credit	risk	standards	of	Appendix	E	of	the	Net	Capital	Rule.	As	of	December	31, 2015,	JPMorgan	Securities	had	tentative	net	capital	in	excess	of	the	minimum and	notification	requirements.

J.P.	Morgan	Securities	plc	is	a	wholly	owned	subsidiary	of	JPMorgan	Chase Bank,	N.A.	and	is	the	Firm's	principal	operating	subsidiary	in	the	U.K.	It	has authority	to	engage	in	banking,	investment	banking	and	broker-dealer	activities. J.P.	Morgan	Securities	plc	is	jointly	regulated	by	the	U.K.	Prudential	Regulation Authority	("PRA")	and	Financial	Conduct	Authority	("FCA").	Commencing January	1,	2014,	J.P.	Morgan	Securities	plc	became	subject	to	the	U.K.	Basel	III capital	rules.

At	December	31,	2015,	J.P.	Morgan	Securities	plc	had	estimated	total	capital	of $33.9	billion;	its	estimated	CET1	capital	ratio	was	15.4%	and	its	estimated	Total capital	ratio	was	19.6%.	Both	capital	ratios	exceeded	the	minimum	standards	of 4.5%	and	8.0%,	respectively,	under	the	transitional	requirements	of	the	European Union's	("EU")	Basel	III	Capital	Requirements	Directive	and	Regulation,	as well	as	the	additional	capital	requirements	specified	by	the	PRA.

# LIQUIDITY	RISK	MANAGEMENT

Liquidity	risk	is	the	risk	that	the	Firm	will	be	unable	to	meet	its	contractual	and contingent	obligations	or	that	it	does	not	have	the	appropriate	amount, composition	and	tenor	of	funding	and	liquidity	to	support	its	assets.

# Liquidity	risk	oversight

The	Firm	has	a	liquidity	risk	oversight	function	whose	primary	objective	is	to provide	assessment,	measurement,	monitoring,	and	control	of	liquidity	risk across	the	Firm.	Liquidity	risk	oversight	is	managed	through	a	dedicated firmwide	Liquidity	Risk	Oversight	group.	The	CTC	CRO,	as	part	of	the independent	risk	management	function,	has	responsibility	for	firmwide	Liquidity Risk	Oversight.	Liquidity	Risk	Oversight's	responsibilities	include	but	are not	limited	to:

•Establishing	and	monitoring	limits,	indicators,	and	thresholds,	including liquidity	appetite	tolerances;

•Defining,	monitoring,	and	reporting	internal	firmwide	and	legal	entity	stress tests,	and	monitoring	and	reporting	regulatory	defined	stress	testing;

•Monitoring	and	reporting	liquidity	positions,	balance	sheet	variances	and funding	activities;

•Conducting	ad	hoc	analysis	to	identify	potential	emerging	liquidity risks.

# Risk	governance	and	measurement

Specific	committees	responsible	for	liquidity	governance	include	firmwide ALCO	as	well	as	line	of	business	and	regional	ALCOs,	and	the	CTC	Risk Committee.	For	further	discussion	of	the	risk	and	risk-related	committees,	see Enterprise-wide	Risk	Management	on	pages	107–111.

# Internal	Stress	testing

Liquidity	stress	tests	are	intended	to	ensure	sufficient	liquidity	for	the	Firm	under a	variety	of	adverse	scenarios.	Results	of	stress	tests	are	therefore	considered	in the	formulation	of	the	Firm's	funding	plan	and	assessment	of	its	liquidity position.	Liquidity	outflow	assumptions	are	modeled	across	a	range	of	time horizons	and	contemplate	both	market	and	idiosyncratic	stress.	Standard	stress tests	are	performed	on	a	regular	basis	and	ad	hoc	stress	tests	are	performed	in response	to	specific	market	events	or	concerns.	Stress	scenarios	are	produced	for JPMorgan	Chase	&	Co.	("Parent	Company")	and	the	Firm's	major	subsidiaries.

Liquidity	stress	tests	assume	all	of	the	Firm's	contractual	obligations	are	met	and then	take	into	consideration	varying	levels	of	access	to	unsecured	and	secured funding	markets.	Additionally,	assumptions	with	respect	to	potential	non- contractual	and	contingent	outflows	are	contemplated.

# Liquidity	management

Treasury	is	responsible	for	liquidity	management.	The	primary	objectives	of effective	liquidity	management	are	to	ensure	that	the	Firm's	core	businesses	are able	to	operate	in	support	of	client	needs,	meet	contractual	and	contingent obligations	through	normal	economic	cycles	as	well	as	during	stress	events,	and to	manage	optimal	funding	mix,	and	availability	of	liquidity	sources.	The	Firm manages	liquidity	and	funding	using	a	centralized,	global	approach	in	order	to optimize	liquidity	sources	and	uses.

In	the	context	of	the	Firm's	liquidity	management,	Treasury	is	responsible	for: •Analyzing	and	understanding	the	liquidity	characteristics	of	the	Firm,	lines	of business	and	legal	entities'	assets	and	liabilities,	taking	into	account	legal, regulatory,	and	operational	restrictions;

•Defining	and	monitoring	firmwide	and	legal	entity	liquidity	strategies,

policies,	guidelines,	and	contingency	funding	plans;

•Managing	liquidity	within	approved	liquidity	risk	appetite	tolerances	and limits;

•Setting	transfer	pricing	in	accordance	with	underlying	liquidity

characteristics	of	balance	sheet	assets	and	liabilities	as	well	as	certain	off- balance	sheet	items.

# Contingency	funding	plan

The	Firm's	contingency	funding	plan	("CFP"),	which	is	reviewed	by	ALCO	and approved	by	the	DRPC,	is	a	compilation	of	procedures	and	action	plans	for managing	liquidity	through	stress	events.	The	CFP	incorporates	the	limits	and indicators	set	by	the	Liquidity	Risk	Oversight	group.	These	limits	and	indicators are	reviewed	regularly	to	identify	the	emergence	of	risks	or	vulnerabilities	in	the Firm's	liquidity	position.	The	CFP	identifies	the	alternative	contingent	liquidity resources	available	to	the	Firm	in	a	stress	event.

# Parent	Company	and	subsidiary	funding

The	Parent	Company	acts	as	a	source	of	funding	to	its	subsidiaries.	The	Firm's liquidity	management	is	intended	to	maintain	liquidity	at	the	Parent	Company,	in addition	to	funding	and	liquidity	raised	at	the	subsidiary	operating	level,	at	levels sufficient	to	fund	the	operations	of	the	Parent	Company	and	its	subsidiaries	for an	extended	period	of	time	in	a	stress	environment	where	access	to	normal funding	sources	is	disrupted.	The	Parent	Company	currently	holds	sufficient liquidity	to	withstand	peak	outflows	over	a	one	year	liquidity	stress	horizon, assuming	no	access	to	wholesale	funding	markets.

# LCR	and	NSFR

The	Firm	must	comply	with	the	U.S.	LCR	rule,	which	is	intended	to	measure	the amount	of	HQLA	held	by	the	Firm	in	relation	to	estimated	net	cash	outflows within	a	30-day	period	during	an	acute	stress	event.	The	LCR	is	required	to	be 80%	at	January	1,	2015,	increasing	by	10%	each	year	until	reaching	the	100% minimum	by	January	1,	2017.	At	December	31,	2015,	the	Firm	was	compliant with	the	fully	phased-in	U.S.	LCR.

On	October	31,	2014,	the	Basel	Committee	issued	the	final	standard	for	the	net stable	funding	ratio	("NSFR")	—	which	is	intended	to	measure	the	"available" amount	of	stable	funding	relative	to	the	"required"	amount	of	stable	funding	over a	one-year	horizon.	NSFR	will	become	a	minimum	standard	by	January	1,	2018 and	requires	that	this	ratio	be	equal	to	at	least	100%	on	an	ongoing	basis.	At December	31,	2015,	the	Firm	was	compliant	with	the	NSFR	based	on	its	current understanding	of	the	final	Basel	rule.	The	U.S.	banking	regulators	are	expected	to issue	an	NPR	that	would	outline	requirements	specific	to	U.S.	banks.

HQLA	is	the	amount	of	assets	that	qualify	for	inclusion	in	the	U.S.	LCR.	HQLA primarily	consists	of	cash	and	certain	unencumbered	high	quality	liquid	assets	as defined	in	the	final	rule.

As	of	December	31,	2015,	the	Firm's	HQLA	was	$496	billion,	compared	with $600	billion	as	of	December	31,	2014.	The	decrease	in	HQLA	was	due	to	lower cash	balances	largely	driven	by	lower	non-operating	deposit	balances;	however, the	Firm	remains	LCR-compliant	given	the	corresponding	reduction	in	estimated net	cash	outflows	associated	with	those	deposits.	HQLA	may	fluctuate	from period	to	period	primarily	due	to	normal	flows	from	client	activity.

The	following	table	presents	the	estimated	HQLA	included	in	the	LCR	broken out	by	HQLA-eligible	cash	and	securities	as	of	December	31,	2015.

| (in	billions) | December	31,	2015 |
| :--- | :--- |
| HQLA |  |
| Eligible\tcash(a) | $304 |
| Eligible\tsecurities(b) | 192 |
| Total\tHQLA | $496 |

(a) Cash	on	deposit	at	central	banks.

(b) Predominantly	includes	U.S.	agency	mortgage-backed	securities,	U.S.	Treasuries,	and sovereign	bonds	net	of	applicable	haircuts	under	U.S.	LCR	rules.

In	addition	to	HQLA,	as	of	December	31,	2015,	the	Firm	has	approximately $249	billion	of	unencumbered	marketable	securities,	such	as	equity	securities and	fixed	income	debt	securities,	available	to	raise	liquidity,	if	required. Furthermore,	the	Firm	maintains	borrowing	capacity	at	various	Federal	Home Loan	Banks	("FHLBs"),	the	Federal	Reserve	Bank	discount	window	and	various other	central	banks	as	a	result	of	collateral	pledged	by	the	Firm	to	such	banks. Although	available,	the	Firm	does	not	view	the	borrowing	capacity	at	the	Federal Reserve	Bank	discount	window	and	the	various	other	central	banks	as	a	primary source	of	liquidity.	As	of	December	31,	2015,	the	Firm's	remaining	borrowing capacity	at	various	FHLBs	and	the	Federal	Reserve	Bank	discount	window	was approximately	$183	billion.	This	remaining	borrowing	capacity	excludes	the benefit	of	securities	included	above	in	HQLA	or	other	unencumbered	securities currently	held	at	the	Federal	Reserve	Bank	discount	window	for	which	the	Firm has	not	drawn	liquidity.

# Funding

# Sources	of	funds

Management	believes	that	the	Firm's	unsecured	and	secured	funding	capacity	is sufficient	to	meet	its	on-	and	off-balance	sheet	obligations.

The	Firm	funds	its	global	balance	sheet	through	diverse	sources	of	funding including	a	stable	deposit	franchise	as	well	as	secured	and	unsecured	funding	in the	capital	markets.	The	Firm's	loan	portfolio	($837.3	billion	at	December	31, 2015),	is	funded	with	a	portion	of	the	Firm's	deposits	($1,279.7	billion	at December	31,	2015)	and	through	securitizations	and,	with	respect	to	a	portion	of the	Firm's	real	estate-related	loans,	with	secured	borrowings	from	the FHLBs.	Deposits	in	excess	of	the	amount	utilized	to	fund	loans	are	primarily invested	in	the	Firm's	investment	securities	portfolio	or	deployed	in	cash	or	other short-term	liquid	investments	based	on	their	interest	rate	and	liquidity	risk characteristics.	Securities	borrowed	or	purchased	under	resale	agreements	and trading	assets-	debt	and	equity	instruments	are	primarily	funded	by	the	Firm's securities	loaned	or	sold	under	agreements	to	repurchase,	trading	liabilities–debt and	equity	instruments,	and	a	portion	of	the	Firm's	long-term	debt	and stockholders'	equity.	In	addition	to	funding	securities	borrowed	or	purchased under	resale	agreements	and	trading	assets-debt	and	equity	instruments,	proceeds from	the	Firm's	debt	and	equity	issuances	are	used	to	fund	certain	loans	and other	financial	and	non-financial	assets,	or	may	be	invested	in	the	Firm's investment	securities	portfolio.	See	the	discussion	below	for	additional information	relating	to	Deposits,	Short-term	funding,	and	Long-term	funding	and issuance.

A	key	strength	of	the	Firm	is	its	diversified	deposit	franchise,	through	each	of	its lines	of	business,	which	provides	a	stable	source	of	funding	and	limits	reliance on	the	wholesale	funding	markets.	As	of	December	31,	2015,	the	Firm's	loans- to-deposits	ratio	was	65%,	compared	with	56%	at	December	31,	2014.

As	of	December	31,	2015,	total	deposits	for	the	Firm	were	$1,279.7	billion, compared	with	$1,363.4	billion	at	December	31,	2014	(61%	and	58%	of	total liabilities	at	December	31,	2015	and	2014,	respectively).	The	decrease	was attributable	to	lower	wholesale	non-operating	deposits,	partially	offset	by	higher consumer	deposits.	For	further	information,	see	Consolidated	Balance	Sheet Analysis	on	pages	75–76.

The	Firm	has	typically	experienced	higher	customer	deposit	inflows	at	quarter-ends.	Therefore,	the	Firm	believes	average	deposit	balances	are	generally	more representative	of	deposit	trends.	The	table	below	summarizes,	by	line	of	business,	the	period-end	and	average	deposit	balances	as	of	and	for	the	years	ended December	31,	2015	and	2014.

| Deposits |  |  | Year	ended	December	31, | Year	ended	December	31, |
| :--- | :--- | :--- | :--- | :--- |
| As\tof\tor\tfor\tthe\tperiod\tended\tDecember\t31, |  |  | Average | Average |
| (in\tmillions) | 2015 | 2014 | 2015 | 2014 |
| Consumer\t&amp;\tCommunity\tBanking | $557,645 | $502,520 | $530,938 | $486,919 |
| Corporate\t&amp;\tInvestment\tBank | 395,228 | 468,423 | 414,064 | 417,517 |
| Commercial\tBanking | 172,470 | 213,682 | 184,132 | 190,425 |
| Asset\tManagement | 146,766 | 155,247 | 149,525 | 150,121 |
| Corporate | 7,606 | 23,555 | 17,129 | 19,319 |
| Total\tFirm | $1,279,715 | $1,363,427 | $1,295,788 | $1,264,301 |

A	significant	portion	of	the	Firm's	deposits	are	consumer	deposits,	which	are	considered	a	stable	source	of	liquidity.	Additionally,	the	majority	of	the	Firm's	wholesale operating	deposits	are	also	considered	to	be	stable	sources	of	liquidity	because	they	are	generated	from	customers	that	maintain	operating	service	relationships	with	the Firm.	Wholesale	non-operating	deposits,	including	a	portion	of	balances	previously	reported	as	commercial	paper	sweep	liabilities,	decreased	by	approximately	$200 billion	from	December	31,	2014	to	December	31,	2015,	predominantly	driven	by	the	Firm's	actions	to	reduce	such	deposits.	The	reduction	has	not	had	a	significant impact	on	the	Firm's	liquidity	position	as	discussed	under	LCR	and	HQLA	above.	For	further	discussions	of	deposit	and	liability	balance	trends,	see	the	discussion	of	the Firm's	business	segments	results	and	the	Consolidated	Balance	Sheet	Analysis	on	pages	83–106	and	pages	75–76,	respectively.

The	following	table	summarizes	short-term	and	long-term	funding,	excluding	deposits,	as	of	December	31,	2015	and	2014,	and	average	balances	for	the	years	ended December	31,	2015	and	2014.	For	additional	information,	see	the	Consolidated	Balance	Sheet	Analysis	on	pages	75–76	and	Note	21.

| As	of	or	for	the	year	ended	December	31, |  |  | Average |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | 2014 | 2015 | 2014 |
| Commercial\tpaper: |  |  |  |  |
| Wholesale\tfunding | $15,562 | $24,052 | $19,340 | $19,442 |
| Client\tcash\tmanagement | — | 42,292 | 18,800 | 40,474 |
| Total\tcommercial\tpaper | $15,562 | $66,344 | $38,140 | $59,916 |
| Obligations\tof\tFirm-administered\tmulti-seller\tconduits(a) | $8,724 | $12,047 | $11,961 | $10,427 |
| Other\tborrowed\tfunds | $21,105 | $30,222 | $28,816 | $31,721 |
| Securities\tloaned\tor\tsold\tunder\tagreements\tto\trepurchase: |  |  |  |  |
| Securities\tsold\tunder\tagreements\tto\trepurchase | $129,598 | $167,077 | $168,163 | $181,186 |
| Securities\tloaned | 18,174 | 21,798 | 19,493 | 22,586 |
| Total\tsecurities\tloaned\tor\tsold\tunder\tagreements\tto\trepurchase(b)(c)(d) | $147,772 | $188,875 | $187,656 | $203,772 |
| Senior\tnotes | $149,964 | $142,169 | $147,498 | $139,388 |
| Trust\tpreferred\tsecurities | 3,969 | 5,435 | 4,341 | 5,408 |
| Subordinated\tdebt | 25,027 | 29,387 | 27,310 | 29,009 |
| Structured\tnotes | 32,813 | 30,021 | 31,309 | 30,311 |
| Total\tlong-term\tunsecured\tfunding | $211,773 | $207,012 | $210,458 | $204,116 |
| Credit\tcard\tsecuritization(a) | 27,906 | 31,197 | 30,382 | 28,892 |
| Other\tsecuritizations(e) | 1,760 | 2,008 | 1,909 | 2,734 |
| FHLB\tadvances | 71,581 | 64,994 | 70,150 | 60,667 |
| Other\tlong-term\tsecured\tfunding(f) | 5,297 | 4,373 | 4,332 | 5,031 |
| Total\tlong-term\tsecured\tfunding | $106,544 | $102,572 | $106,773 | $97,324 |
| Preferred\tstock(g) | $26,068 | $20,063 | 24,040 | $17,018 |
| Common\tstockholders'\tequity(g) | $221,505 | $211,664 | 215,690 | $207,400 |

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

(b) Excludes	federal	funds	purchased.

(c) Excluded	long-term	structured	repurchase	agreements	of	$4.2	billion	and	$2.7	billion	as	of	December	31,	2015	and	2014,	respectively,	and	average	balances	of $3.9	billion	and	$4.2	billion	for	the years	ended	December	31,	2015	and	2014,	respectively.

(d) Excluded	average	long-term	securities	loaned	of	$24	million	as	of	December	31,	2014.	There	was	no	balance	for	the	other	periods	presented.

(e) Other	securitizations	includes	securitizations	of	residential	mortgages	and	student	loans.	The	Firm's	wholesale	businesses	also	securitize	loans	for	client-driven	transactions,	which	are	not considered	to	be	a	source	of	funding	for	the	Firm	and	are	not	included	in	the	table.

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

(g) For	additional	information	on	preferred	stock	and	common	stockholders'	equity	see	Capital	Management	on	pages	149–158,	Consolidated	statements	of	changes	in	stockholders'	equity,	Note	22 and	Note	23.

# Short-term	funding

During	the	third	quarter	of	2015	the	Firm	completed	the	discontinuation	of	its commercial	paper	customer	sweep	cash	management	program.	This	change	has not	had	a	significant	impact	on	the	Firm's	liquidity	as	the	majority	of	these customer	funds	remain	as	deposits	at	the	Firm.

The	Firm's	sources	of	short-term	secured	funding	primarily	consist	of	securities loaned	or	sold	under	agreements	to	repurchase.	Securities	loaned	or	sold	under agreements	to	repurchase	are	secured	predominantly	by	high-quality	securities collateral,	including	government-issued	debt	and	agency	MBS,	and	constitute	a significant	portion	of	the	federal	funds	purchased	and	securities	loaned	or	sold under	repurchase	agreements	on	the	Consolidated	balance	sheets.	The	decrease in	securities	loaned	or	sold	under	agreements	to	repurchase	at	December	31, 2015,	compared	with	the	balance	at	December	31,	2014	(as	well	as	the	average balances	for	the	full	year	2015,	compared	with	the	prior	year)	was	due	to	a decline	in	secured	financing	of	trading	assets-debt	and	equity	instruments	in	CIB. The	balances	associated	with	securities	loaned	or	sold	under	agreements	to repurchase	fluctuate	over	time	due	to	customers'	investment	and	financing activities;	the	Firm's	demand	for	financing;	the	ongoing	management	of	the	mix of	the	Firm's	liabilities,	including	its	secured	and	unsecured	financing	(for	both the	investment	securities	and	market-making	portfolios);	and	other	market	and portfolio	factors.

# Long-term	funding	and	issuance

Long-term	funding	provides	additional	sources	of	stable	funding	and	liquidity for	the	Firm.	The	Firm's	long-term	funding	plan	is	driven	by	expected	client activity,	liquidity	considerations,	and	regulatory	requirements.	Long-term funding	objectives	include	maintaining	diversification,	maximizing	market access	and	optimizing	funding	costs,	as	well	as	maintaining	a	certain	level	of liquidity	at	the	Parent	Company.	The	Firm	evaluates	various	funding	markets, tenors	and	currencies	in	creating	its	optimal	long-term	funding	plan.

The	significant	majority	of	the	Firm's	long-term	unsecured	funding	is	issued	by the	Parent	Company	to	provide	maximum	flexibility	in	support	of	both	bank	and nonbank	subsidiary	funding.	The	following	table	summarizes	long-term unsecured	issuance	and	maturities	or	redemptions	for	the	years	ended December	31,	2015	and	2014.	For	additional	information,	see	Note	21.

# Long-term	unsecured	funding

| (in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Issuance |  |  |
| Senior\tnotes\tissued\tin\tthe\tU.S.\tmarket | $19,212 | $16,322 |
| Senior\tnotes\tissued\tin\tnon-U.S.\tmarkets | 10,188 | 11,193 |
| Total\tsenior\tnotes | 29,400 | 27,515 |
| Subordinated\tdebt | 3,210 | 4,956 |
| Structured\tnotes | 22,165 | 19,806 |
| Total\tlong-term\tunsecured\tfunding\t–\tissuance | $54,775 | $52,277 |
| Maturities/redemptions |  |  |
| Senior\tnotes | $18,454 | $21,169 |
| Trust\tpreferred\tsecurities | 1,500 | — |
| Subordinated\tdebt | 6,908 | 4,487 |
| Structured\tnotes | 18,099 | 18,554 |
| Total\tlong-term\tunsecured\tfunding\t–\nmaturities/redemptions | $44,961 | $44,210 |

The	Firm	raises	secured	long-term	funding	through	securitization	of	consumer credit	card	loans	and	advances	from	the	FHLBs.

The	following	table	summarizes	the	securitization	issuance	and	FHLB	advances and	their	respective	maturities	or	redemption	for	the	years	ended	December	31, 2015	and	2014.

| December	31, | Issuance |  | Maturities/Redemptions | Maturities/Redemptions |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | 2014 | 2015 | 2014 |
| Credit\tcard\tsecuritization | $6,807 | $8,327 | $10,130 | $3,774 |
| Other\tsecuritizations(a) | — | — | 248 | 309 |
| FHLB\tadvances | 16,550 | 15,200 | 9,960 | 12,079 |
| Other\tlong-term\tsecured\nfunding | 1,105 | 802 | 383 | 3,076 |
| Total\tlong-term\tsecured\nfunding | $24,462 | $24,329 | $20,721 | $19,238 |

(a) Other	securitizations	includes	securitizations	of	residential	mortgages	and	student	loans.

The	Firm's	wholesale	businesses	also	securitize	loans	for	client-driven transactions;	those	client-driven	loan	securitizations	are	not	considered	to	be	a source	of	funding	for	the	Firm	and	are	not	included	in	the	table	above.	For further	description	of	the	client-driven	loan	securitizations,	see	Note	16.

# Credit	ratings

The	cost	and	availability	of	financing	are	influenced	by	credit	ratings. Reductions	in	these	ratings	could	have	an	adverse	effect	on	the	Firm's	access	to liquidity	sources,	increase	the	cost	of	funds,	trigger	additional	collateral	or funding	requirements	and	decrease	the	number	of	investors	and	counterparties willing	to	lend	to	the	Firm.	Additionally,	the	Firm's	funding	requirements	for VIEs	and	other	third	party	commitments	may	be	adversely	affected	by	a	decline

in	credit	ratings.	For	additional	information	on	the	impact	of	a	credit	ratings downgrade	on	the	funding	requirements	for	VIEs,	and	on	derivatives	and collateral	agreements,	see	Special-purpose	entities	on	page	77,	and	credit	risk, liquidity	risk	and	credit-related	contingent	features	in Note	6.

The	credit	ratings	of	the	Parent	Company	and	the	Firm's	principal	bank	and	nonbank	subsidiaries	as	of	December	31,	2015,	were	as	follows.

Downgrades	of	the	Firm's	long-term	ratings	by	one	or	two	notches	could	result in	an	increase	in	its	cost	of	funds,	and	access	to	certain	funding	markets	could	be reduced	as	noted	above.	The	nature	and	magnitude	of	the	impact	of	ratings downgrades	depends	on	numerous	contractual	and	behavioral	factors	(which	the Firm	believes	are	incorporated	in	its	liquidity	risk	and	stress	testing	metrics).	The Firm	believes	that	it	maintains	sufficient	liquidity	to	withstand	a	potential decrease	in	funding	capacity	due	to	ratings	downgrades.

JPMorgan	Chase's	unsecured	debt	does	not	contain	requirements	that	would	call for	an	acceleration	of	payments,	maturities	or	changes	in	the	structure	of	the existing	debt,	provide	any	limitations	on	future	borrowings	or	require	additional collateral,	based	on	unfavorable	changes	in	the	Firm's	credit	ratings,	financial ratios,	earnings,	or	stock	price.

Critical	factors	in	maintaining	high	credit	ratings	include	a	stable	and	diverse earnings	stream,	strong	capital	ratios,	strong	credit	quality	and	risk	management controls,	diverse	funding	sources,	and	disciplined	liquidity	monitoring procedures.	Rating	agencies	continue	to	evaluate	economic	and	geopolitical trends,	regulatory	developments,	future	profitability,	risk	management	practices, and	litigation	matters,	as	well	as	their	broader	ratings	methodologies.	Changes	in any	of	these	factors	could	lead	to	changes	in	the	Firm's	credit	ratings.

In	May	2015,	Moody's	published	its	new	bank	rating	methodology.	As	part	of this	action,	the	Firm's	preferred	stock,	deposits	and	bank	subordinated	debt ratings	were	upgraded	by	one	notch.	Additionally	in	May	2015,	Fitch	changed	its bank	ratings	methodology,	implementing	ratings	differentiation	between	bank holding	companies	and	their	bank	subsidiaries.	This	resulted	in	a	one	notch upgrade	to	the	issuer	ratings,	senior	debt	ratings	and	long-term	deposit	ratings	of JPMorgan	Chase	Bank,	N.A.,	and	certain	other	subsidiaries.	In	December	2015, S&P	removed	from	its	ratings	for	U.S.	GSIBs	the	uplift	assumption	due	to extraordinary	government	support.	As	a	result,	the	Firm's	short-term	and	long- term	senior	unsecured	debt	ratings	and	its	subordinated	unsecured	debt	ratings were	lowered	by	one	notch.

Although	the	Firm	closely	monitors	and	endeavors	to	manage,	to	the	extent	it	is able,	factors	influencing	its	credit	ratings,	there	is	no	assurance	that	its	credit ratings	will	not	be	changed	in	the	future.

# CRITICAL	ACCOUNTING	ESTIMATES	USED	BY	THE	FIRM

JPMorgan	Chase's	accounting	policies	and	use	of	estimates	are	integral	to understanding	its	reported	results.	The	Firm's	most	complex	accounting estimates	require	management's	judgment	to	ascertain	the	appropriate	carrying value	of	assets	and	liabilities.	The	Firm	has	established	policies	and	control procedures	intended	to	ensure	that	estimation	methods,	including	any	judgments made	as	part	of	such	methods,	are	well-controlled,	independently	reviewed	and applied	consistently	from	period	to	period.	The	methods	used	and	judgments made	reflect,	among	other	factors,	the	nature	of	the	assets	or	liabilities	and	the related	business	and	risk	management	strategies,	which	may	vary	across	the Firm's	businesses	and	portfolios.	In	addition,	the	policies	and	procedures	are intended	to	ensure	that	the	process	for	changing	methodologies	occurs	in	an appropriate	manner.	The	Firm	believes	its	estimates	for	determining	the	carrying value	of	its	assets	and	liabilities	are	appropriate.	The	following	is	a	brief description	of	the	Firm's	critical	accounting	estimates	involving	significant judgments.

JPMorgan	Chase's	allowance	for	credit	losses	covers	the	retained	consumer	and wholesale	loan	portfolios,	as	well	as	the	Firm's	wholesale	and	certain	consumer lending-related	commitments.	The	allowance	for	loan	losses	is	intended	to	adjust the	carrying	value	of	the	Firm's	loan	assets	to	reflect	probable	credit	losses inherent	in	the	loan	portfolio	as	of	the	balance	sheet	date.	Similarly,	the allowance	for	lending-related	commitments	is	established	to	cover	probable credit	losses	inherent	in	the	lending-related	commitments	portfolio	as	of	the balance	sheet	date.

The	allowance	for	loan	losses	includes	an	asset-specific	component,	a	formula- based	component,	and	a	component	related	to	PCI	loans.	The	determination	of each	of	these	components	involves	significant	judgment	on	a	number	of	matters, as	discussed	below.	For	further	discussion	of	the	methodologies	used	in establishing	the	Firm's	allowance	for	credit	losses,	see	Note	15.

# Asset-specific	component

The	asset-specific	allowance	for	loan	losses	for	each	of	the	Firm's	portfolio segments	is	generally	measured	as	the	difference	between	the	recorded investment	in	the	impaired	loan	and	the	present	value	of	the	cash	flows	expected to	be	collected,	discounted	at	the	loan's	original	effective	interest	rate. Estimating	the	timing	and	amounts	of	future	cash	flows	is	highly	judgmental	as these	cash	flow	projections	rely	upon	estimates	such	as	redefault	rates,	loss severities,	the	amounts	and	timing	of	prepayments	and	other	factors	that	are reflective	of	current	and	expected	future	market	conditions.	These	estimates	are, in	turn,	dependent	on	factors	such	as	the	level	of	future	home	prices,	the	duration of	current	overall	economic	conditions,	and	other	macroeconomic	and	portfolio- specific	factors.	All	of	these	estimates	and	assumptions	require	significant management	judgment	and	certain	assumptions	are	highly	subjective.

# Formula-based	component	—	Consumer	loans	and	lending-related commitments,	excluding	PCI	loans

The	formula-based	allowance	for	credit	losses	for	the	consumer	portfolio, including	credit	card,	is	calculated	by	applying	statistical	credit	loss	factors	to outstanding	principal	balances	over	an	estimated	loss	emergence	period	to	arrive at	an	estimate	of	incurred	credit	losses	in	the	portfolio.	The	loss	emergence period	represents	the	time	period	between	the	date	at	which	the	loss	is	estimated to	have	been	incurred	and	the	ultimate	realization	of	that	loss	(through	a	charge- off).	Estimated	loss	emergence	periods	may	vary	by	product	and	may	change over	time;	management	applies	judgment	in	estimating	loss	emergence	periods, using	available	credit	information	and	trends.	In	addition,	management	applies judgment	to	the	statistical	loss	estimates	for	each	loan	portfolio	category,	using delinquency	trends	and	other	risk	characteristics	to	estimate	the	total	incurred credit	losses	in	the	portfolio.	Management	uses	additional	statistical	methods	and considers	portfolio	and	collateral	valuation	trends	to	review	the	appropriateness of	the	primary	statistical	loss	estimate.

The	statistical	calculation	is	then	adjusted	to	take	into	consideration	model imprecision,	external	factors	and	current	economic	events	that	have	occurred	but that	are	not	yet	reflected	in	the	factors	used	to	derive	the	statistical	calculation; these	adjustments	are	accomplished	in	part	by	analyzing	the	historical	loss experience	for	each	major	product	segment.	However,	it	is	difficult	to	predict whether	historical	loss	experience	is	indicative	of	future	loss	levels.	Management applies	judgment	in	making	this	adjustment,	taking	into	account	uncertainties associated	with	current	macroeconomic	and	political	conditions,	quality	of underwriting	standards,	borrower	behavior,	the	potential	impact	of	payment recasts	within	the	HELOC	portfolio,	and	other	relevant	internal	and	external factors	affecting	the	credit	quality	of	the	portfolio.	In	certain	instances,	the interrelationships	between	these	factors	create	further	uncertainties.	For example,	the	performance	of	a	HELOC	that	experiences	a	payment	recast	may be	affected	by	both	the	quality	of	underwriting	standards	applied	in	originating the	loan	and	the	general	economic	conditions	in	effect	at	the	time	of	the	payment recast.	For	junior	lien	products,	management	considers	the	delinquency	and/or modification	status	of	any	senior	liens	in	determining	the	adjustment.	The application	of	different	inputs	into	the	statistical	calculation,	and	the	assumptions used	by	management	to	adjust	the	statistical	calculation,	are	subject	to management	judgment,	and	emphasizing	one	input	or	assumption	over	another, or	considering	other	inputs	or	assumptions,	could	affect	the	estimate	of	the allowance	for	loan	losses	for	the	consumer	credit	portfolio.

Overall,	the	allowance	for	credit	losses	for	the	consumer	portfolio,	including credit	card,	is	sensitive	to	changes	in	the	economic	environment	(e.g., unemployment	rates),	delinquency	rates,	the	realizable	value	of	collateral	(e.g., housing	prices),	FICO	scores,	borrower	behavior	and	other	risk	factors.	While	all of	these	factors	are	important	determinants	of	overall	allowance	levels,	changes in	the	various	factors	may	not	occur	at	the	same	time	or	at	the	same	rate,	or changes	may	be	directionally	inconsistent	such	that	improvement	in	one	factor may	offset	deterioration	in	the	other.	In	addition,	changes	in	these	factors	would not	necessarily	be	consistent	across	all	geographies	or	product	types.	Finally,	it	is difficult	to	predict	the	extent	to	which	changes	in	these	factors	would	ultimately affect	the	frequency	of	losses,	the	severity	of	losses	or	both.

# PCI	loans

In	connection	with	the	Washington	Mutual	transaction,	JPMorgan	Chase acquired	certain	PCI	loans,	which	are	accounted	for	as	described	in	Note	14.	The allowance	for	loan	losses	for	the	PCI	portfolio	is	based	on	quarterly	estimates	of the	amount	of	principal	and	interest	cash	flows	expected	to	be	collected	over	the estimated	remaining	lives	of	the	loans.

These	cash	flow	projections	are	based	on	estimates	regarding	default	rates (including	redefault	rates	on	modified	loans),	loss	severities,	the	amounts	and timing	of	prepayments	and	other	factors	that	are	reflective	of	current	and expected	future	market	conditions.	These	estimates	are	dependent	on assumptions	regarding	the	level	of	future	home	price	declines,	and	the	duration of	current	overall	economic	conditions,	among	other	factors.	These	estimates and	assumptions	require	significant	management	judgment	and	certain assumptions	are	highly	subjective.

Formula-based	component	—	Wholesale	loans	and	lending-related	commitments The	Firm's	methodology	for	determining	the	allowance	for	loan	losses	and	the allowance	for	lending-related	commitments	involves	the	early	identification	of credits	that	are	deteriorating.	The	formula-based	component	of	the	allowance calculation	for	wholesale	loans	and	lending-related	components	is	the	product	of an	estimated	PD	and	estimated	LGD.	These	factors	are	determined	based	on	the credit	quality	and	specific	attributes	of	the	Firm's	loans	and	lending-related commitments	to	each	obligor.

The	Firm	assesses	the	credit	quality	of	its	borrower	or	counterparty	and	assigns	a risk	rating.	Risk	ratings	are	assigned	at	origination	or	acquisition,	and	if necessary,	adjusted	for	changes	in	credit	quality	over	the	life	of	the	exposure.	In assessing	the	risk	rating	of	a	particular	loan	or	lending-related	commitment, among	the	factors	considered	are	the	obligor's	debt	capacity	and	financial flexibility,	the	level	of	the	obligor's	earnings,	the	amount	and	sources	for repayment,	the	level	and	nature	of	contingencies,	management	strength,	and	the industry	and	geography	in	which	the	obligor	operates.	These	factors	are	based	on an

evaluation	of	historical	and	current	information	and	involve	subjective assessment	and	interpretation.	Determining	risk	ratings	involves	significant judgment;	emphasizing	one	factor	over	another	or	considering	additional	factors could	affect	the	risk	rating	assigned	by	the	Firm.

PD	estimates	are	based	on	observable	external	through-the-cycle	data,	using credit	rating	agency	default	statistics.	A	LGD	estimate	is	assigned	to	each	loan or	lending-related	commitment.	The	estimate	represents	the	amount	of	economic loss	if	the	obligor	were	to	default.	The	type	of	obligor,	quality	of	collateral,	and the	seniority	of	the	Firm's	lending	exposure	in	the	obligor's	capital	structure affect	LGD.	LGD	estimates	are	based	on	the	Firm's	history	of	actual	credit losses	over	more	than	one	credit	cycle.	Changes	to	the	time	period	used	for	PD and	LGD	estimates	(for	example,	point-in-time	loss	versus	longer	views	of	the credit	cycle)	could	also	affect	the	allowance	for	credit	losses.

The	Firm	applies	judgment	in	estimating	PD	and	LGD	used	in	calculating	the allowances.	Wherever	possible,	the	Firm	uses	independent,	verifiable	data	or	the Firm's	own	historical	loss	experience	in	its	models	for	estimating	the allowances,	but	differences	in	characteristics	between	the	Firm's	specific	loans or	lending-related	commitments	and	those	reflected	in	external	and	Firm-specific historical	data	could	affect	loss	estimates.	Estimates	of	PD	and	LGD	are	subject to	periodic	refinement	based	on	any	changes	to	underlying	external	and	Firm- specific	historical	data.	The	use	of	different	inputs	would	change	the	amount	of the	allowance	for	credit	losses	determined	appropriate	by	the	Firm.

Management	also	applies	its	judgment	to	adjust	the	modeled	loss	estimates, taking	into	consideration	model	imprecision,	external	factors	and	economic events	that	have	occurred	but	are	not	yet	reflected	in	the	loss	factors.	Historical experience	of	both	LGD	and	PD	are	considered	when	estimating	these adjustments.	Factors	related	to	concentrated	and	deteriorating	industries	also	are incorporated	where	relevant.	These	estimates	are	based	on	management's	view of	uncertainties	that	relate	to	current	macroeconomic	and	political	conditions, quality	of	underwriting	standards	and	other	relevant	internal	and	external	factors affecting	the	credit	quality	of	the	current	portfolio.

# Allowance	for	credit	losses	sensitivity

As	noted	above,	the	Firm's	allowance	for	credit	losses	is	sensitive	to	numerous factors,	which	may	differ	depending	on	the	portfolio.	Changes	in	economic conditions	or	in	the	Firm's	assumptions	and	estimates	could	affect	its	estimate	of probable	credit	losses	inherent	in	the	portfolio	at	the	balance	sheet	date.	The Firm	uses	its	best	judgment	to	assess	these	economic	conditions	and	loss	data	in estimating	the	allowance	for	credit	losses	and	these	estimates	are	subject	to periodic	refinement	based	on	any	changes	to	underlying	external	and	Firm- specific	historical	data.	In	many	cases,	the	use	of	alternate	estimates	(for example,	the	effect	of	home	prices	and	unemployment	rates

on	consumer	delinquency,	or	the	calibration	between	the	Firm's	wholesale	loan risk	ratings	and	external	credit	ratings)	or	data	sources	(for	example,	external	PD and	LGD	factors	that	incorporate	industry-wide	information,	versus	Firm- specific	history)	would	result	in	a	different	estimated	allowance	for	credit	losses. To	illustrate	the	potential	magnitude	of	certain	alternate	judgments,	the	Firm estimates	that	changes	in	the	following	inputs	would	have	the	following	effects on	the	Firm's	modeled	loss	estimates	as	of	December	31,	2015,	without consideration	of	any	offsetting	or	correlated	effects	of	other	inputs	in	the	Firm's allowance	for	loan	losses:

•For	PCI	loans,	a	combined	5%	decline	in	housing	prices	and	a	1%	increase	in unemployment	rates	from	current	levels	could	imply	an	increase	to	modeled credit	loss	estimates	of	approximately	$700	million.

•For	the	residential	real	estate	portfolio,	excluding	PCI	loans,	a	combined	5% decline	in	housing	prices	and	a	1%	increase	in	unemployment	rates	from current	levels	could	imply	an	increase	to	modeled	annual	loss	estimates	of approximately	$125	million.

•A	50	basis	point	deterioration	in	forecasted	credit	card	loss	rates	could	imply an	increase	to	modeled	annualized	credit	card	loan	loss	estimates	of approximately	$600	million.

•An	increase	in	PD	factors	consistent	with	a	one-notch	downgrade	in	the Firm's	internal	risk	ratings	for	its	entire	wholesale	loan	portfolio	could	imply an	increase	in	the	Firm's	modeled	loss	estimates	of	approximately	$2.1 billion.

•A	100	basis	point	increase	in	estimated	LGD	for	the	Firm's	entire	wholesale loan	portfolio	could	imply	an	increase	in	the	Firm's	modeled	loss	estimates of	approximately	$175	million.

The	purpose	of	these	sensitivity	analyses	is	to	provide	an	indication	of	the isolated	impacts	of	hypothetical	alternative	assumptions	on	modeled	loss estimates.	The	changes	in	the	inputs	presented	above	are	not	intended	to	imply management's	expectation	of	future	deterioration	of	those	risk	factors.	In addition,	these	analyses	are	not	intended	to	estimate	changes	in	the	overall allowance	for	loan	losses,	which	would	also	be	influenced	by	the	judgment management	applies	to	the	modeled	loss	estimates	to	reflect	the	uncertainty	and imprecision	of	these	modeled	loss	estimates	based	on	then-current	circumstances and	conditions.

It	is	difficult	to	estimate	how	potential	changes	in	specific	factors	might	affect the	overall	allowance	for	credit	losses	because	management	considers	a	variety of	factors	and	inputs	in	estimating	the	allowance	for	credit	losses.	Changes	in these	factors	and	inputs	may	not	occur	at	the	same	rate	and	may	not	be consistent	across	all	geographies	or	product	types,	and	changes	in	factors	may	be directionally	inconsistent,	such	that	improvement	in	one	factor	may	offset deterioration	in	other	factors.	In	addition,

it	is	difficult	to	predict	how	changes	in	specific	economic	conditions	or assumptions	could	affect	borrower	behavior	or	other	factors	considered	by management	in	estimating	the	allowance	for	credit	losses.	Given	the	process	the Firm	follows	and	the	judgments	made	in	evaluating	the	risk	factors	related	to	its loss	estimates,	management	believes	that	its	current	estimate	of	the	allowance for	credit	losses	is	appropriate.

# Fair	value	of	financial	instruments,	MSRs	and	commodities	inventory

JPMorgan	Chase	carries	a	portion	of	its	assets	and	liabilities	at	fair	value.	The majority	of	such	assets	and	liabilities	are	measured	at	fair	value	on	a	recurring basis.	Certain	assets	and	liabilities	are	measured	at	fair	value	on	a	nonrecurring basis,	including	certain	mortgage,	home	equity	and	other	loans,	where	the carrying	value	is	based	on	the	fair	value	of	the	underlying	collateral.

# Assets	measured	at	fair	value

The	following	table	includes	the	Firm's	assets	measured	at	fair	value	and	the portion	of	such	assets	that	are	classified	within	level	3	of	the	valuation	hierarchy. For	further	information,	see	Note	3.

| December	31,	2015<br>(in	billions,	except	ratio	data) | Total	assets	at	fair<br>value | Total	level	3<br>assets |
| :--- | :--- | :--- |
| Trading\tdebt\tand\tequity\tinstruments | $284.1 | $11.9 |
| Derivative\treceivables(a) | 59.7 | 7.9 |
| Trading\tassets | 343.8 | 19.8 |
| AFS\tsecurities | 241.8 | 0.8 |
| Loans | 2.9 | 1.5 |
| MSRs | 6.6 | 6.6 |
| Private\tequity\tinvestments(b) | 1.9 | 1.7 |
| Other | 28.0 | 0.8 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\nrecurring\tbasis | 625.0 | 31.2 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\nnonrecurring\tbasis | 1.7 | 1.0 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $626.7 | $32.2 |
| Total\tFirm\tassets | $2,351.7 |  |
| Level\t3\tassets\tas\ta\tpercentage\tof\ttotal\tFirm\nassets(a) |  | 1.4% |
| Level\t3\tassets\tas\ta\tpercentage\tof\ttotal\tFirm\tassets\nat\tfair\tvalue(a) |  | 5.1% |

Note:	Effective	April	1,	2015,	the	Firm	adopted	new	accounting	guidance	for	certain	investments	where the	Firm	measures	fair	value	using	the	net	asset	value	per	share	(or	its	equivalent)	as	a	practical	expedient and	has	excluded	these	investments	from	the	fair	value	hierarchy.	For	further	information,	see	Note	3.

(a) For	purposes	of	table	above,	the	derivative	receivables	total	reflects	the	impact	of	netting adjustments;	however,	the	$7.9	billion	of	derivative	receivables	classified	as	level	3	does not	reflect	the	netting	adjustment	as	such	netting	is	not	relevant	to	a	presentation	based	on the	transparency	of	inputs	to	the	valuation	of	an	asset.	However,	if	the	Firm	were	to	net such	balances	within	level	3,	the	reduction	in	the	level	3	derivative	receivables	balance would	 be	 $546	 million	 at	 December	 31,	 2015;	 this	 is	 exclusive	 of	 the	 netting	 benefit associated	with	cash	collateral,	which	would	further	reduce	the	level	3	balances.

(b) Private	equity	instruments	represent	investments	within	the	Corporate	line	of	business.

# Valuation

Details	of	the	Firm's	processes	for	determining	fair	value	are	set	out	in	Note	3. Estimating	fair	value	requires	the	application	of	judgment.	The	type	and	level	of judgment	required	is	largely	dependent	on	the	amount	of	observable	market information	available	to	the	Firm.	For	instruments	valued	using	internally developed	models	that	use	significant	unobservable	inputs	and	are	therefore classified	within	level	3	of	the	valuation	hierarchy,	judgments	used	to	estimate fair	value	are	more	significant	than	those	required	when	estimating	the	fair	value of	instruments	classified	within	levels	1	and	2.

In	arriving	at	an	estimate	of	fair	value	for	an	instrument	within	level	3, management	must	first	determine	the	appropriate	model	to	use.	Second,	the	lack of	observability	of	certain	significant	inputs	requires	management	to	assess	all relevant	empirical	data	in	deriving	valuation	inputs	including,	for	example, transaction	details,	yield	curves,	interest	rates,	prepayment	rates,	default	rates, volatilities,	correlations,	equity	or	debt	prices,	valuations	of	comparable instruments,	foreign	exchange	rates	and	credit	curves.	For	further	discussion	of the	valuation	of	level	3	instruments,	including	unobservable	inputs	used,	see Note	3.

For	instruments	classified	in	levels	2	and	3,	management	judgment	must	be applied	to	assess	the	appropriate	level	of	valuation	adjustments	to	reflect counterparty	credit	quality,	the	Firm's	credit-worthiness,	market	funding	rates, liquidity	considerations,	unobservable	parameters,	and	for	portfolios	that	meet specified	criteria,	the	size	of	the	net	open	risk	position.	The	judgments	made	are typically	affected	by	the	type	of	product	and	its	specific	contractual	terms,	and the	level	of	liquidity	for	the	product	or	within	the	market	as	a	whole.	For	further discussion	of	valuation	adjustments	applied	by	the	Firm	see	Note	3.

Imprecision	in	estimating	unobservable	market	inputs	or	other	factors	can	affect the	amount	of	gain	or	loss	recorded	for	a	particular	position.	Furthermore,	while the	Firm	believes	its	valuation	methods	are	appropriate	and	consistent	with	those of	other	market	participants,	the	methods	and	assumptions	used	reflect management	judgment	and	may	vary	across	the	Firm's	businesses	and	portfolios.

The	Firm	uses	various	methodologies	and	assumptions	in	the	determination	of fair	value.	The	use	of	methodologies	or	assumptions	different	than	those	used	by the	Firm	could	result	in	a	different	estimate	of	fair	value	at	the	reporting	date. For	a	detailed	discussion	of	the	Firm's	valuation	process	and	hierarchy,	and	its determination	of	fair	value	for	individual	financial	instruments,	see	Note	3.

# Goodwill	impairment

Under	U.S.	GAAP,	goodwill	must	be	allocated	to	reporting	units	and	tested	for impairment	at	least	annually.	The	Firm's	process	and	methodology	used	to conduct	goodwill	impairment	testing	is	described	in	Note	17.

Management	applies	significant	judgment	when	estimating	the	fair	value	of	its reporting	units.	Estimates	of	fair	value	are	dependent	upon	estimates	of	(a)	the future	earnings	potential	of	the	Firm's	reporting	units,	including	the	estimated effects	of	regulatory	and	legislative	changes,	such	as	the	Dodd-Frank	Act,	(b) long-term	growth	rates	and	(c)	the	relevant	cost	of	equity.	Imprecision	in estimating	these	factors	can	affect	the	estimated	fair	value	of	the	reporting	units.

Based	upon	the	updated	valuations	for	all	of	its	reporting	units,	the	Firm concluded	that	the	goodwill	allocated	to	its	reporting	units	was	not	impaired	at December	31,	2015.	The	fair	values	of	these	reporting	units	exceeded	their carrying	values	by	approximately	10%	-	180%	for	all	reporting	units	and	did	not indicate	a	significant	risk	of	goodwill	impairment	based	on	current	projections and	valuations.

The	goodwill	of	$101	million	remaining	as	of	December	31,	2014	associated with	the	Private	Equity	business	was	disposed	of	as	part	of	the	Private	Equity sale	completed	in	January	2015.	For	further	information	on	the	Private	Equity sale,	see	Note	2.

The	projections	for	all	of	the	Firm's	reporting	units	are	consistent	with management's	short-term	business	outlook	assumptions,	and	in	the	longer	term, incorporate	a	set	of	macroeconomic	assumptions	and	the	Firm's	best	estimates	of long-term	growth	and	returns	on	equity	of	its	businesses.	Where	possible,	the Firm	uses	third-party	and	peer	data	to	benchmark	its	assumptions	and	estimates.

Declines	in	business	performance,	increases	in	credit	losses,	increases	in	equity capital	requirements,	as	well	as	deterioration	in	economic	or	market	conditions, adverse	estimates	of	regulatory	or	legislative	changes	or	increases	in	the estimated	cost	of	equity,	could	cause	the	estimated	fair	values	of	the	Firm's reporting	units	or	their	associated	goodwill	to	decline	in	the	future,	which	could result	in	a	material	impairment	charge	to	earnings	in	a	future	period	related	to some	portion	of	the	associated	goodwill.

For	additional	information	on	goodwill,	see	Note	17.

# Income	taxes

JPMorgan	Chase	is	subject	to	the	income	tax	laws	of	the	various	jurisdictions	in which	it	operates,	including	U.S.	federal,	state	and	local	and	non-U.S. jurisdictions.	These	laws	are	often	complex	and	may	be	subject	to	different interpretations.	To	determine	the	financial	statement	impact	of	accounting	for income	taxes,	including	the	provision	for	income	tax	expense	and	unrecognized tax	benefits,	JPMorgan	Chase	must	make	assumptions	and	judgments	about	how to	interpret	and	apply	these	complex	tax	laws	to	numerous	transactions	and business	events,	as	well	as	make	judgments	regarding	the	timing	of	when	certain items	may	affect	taxable	income	in	the	U.S.	and	non-U.S.	tax	jurisdictions.

JPMorgan	Chase's	interpretations	of	tax	laws	around	the	world	are	subject	to review	and	examination	by	the	various	taxing	authorities	in	the	jurisdictions where	the	Firm	operates,	and	disputes	may	occur	regarding	its	view	on	a	tax position.	These	disputes	over	interpretations	with	the	various	taxing	authorities may	be	settled	by	audit,	administrative	appeals	or	adjudication	in	the	court systems	of	the	tax	jurisdictions	in	which	the	Firm	operates.	JPMorgan	Chase regularly	reviews	whether	it	may	be	assessed	additional	income	taxes	as	a	result of	the	resolution	of	these	matters,	and	the	Firm	records	additional	reserves	as appropriate.	In	addition,	the	Firm	may	revise	its	estimate	of	income	taxes	due	to changes	in	income	tax	laws,	legal	interpretations	and	tax	planning	strategies.	It	is possible	that	revisions	in	the	Firm's	estimate	of	income	taxes	may	materially affect	the	Firm's	results	of	operations	in	any	reporting	period.

The	Firm's	provision	for	income	taxes	is	composed	of	current	and	deferred taxes.	Deferred	taxes	arise	from	differences	between	assets	and	liabilities measured	for	financial	reporting	versus	income	tax	return	purposes.	Deferred	tax assets	are	recognized	if,	in	management's	judgment,	their	realizability	is determined	to	be	more	likely	than	not.	The	Firm	has	also	recognized	deferred	tax assets	in	connection	with	certain	net	operating	losses	("NOLs")	and	tax	credits. The	Firm	performs	regular	reviews	to	ascertain	whether	its	deferred	tax	assets are	realizable.	These	reviews	include	management's	estimates	and	assumptions regarding	future	taxable	income,	which	also	incorporates	various	tax	planning strategies,	including	strategies	that	may	be	available	to	utilize	NOLs	before	they expire.	In	connection	with	these	reviews,	if	it	is	determined	that	a	deferred	tax asset	is	not	realizable,	a	valuation	allowance	is	established.	The	valuation allowance	may	be	reversed	in	a	subsequent	reporting	period	if	the	Firm determines	that,	based	on	revised	estimates	of	future	taxable	income	or	changes in	tax	planning	strategies,	it	is	more	likely	than	not	that	all	or	part	of	the	deferred tax	asset	will	become	realizable.	As	of	December	31,	2015,	management	has determined	it	is	more	likely	than	not	that	the	Firm	will	realize	its	deferred	tax assets,	net	of	the	existing	valuation	allowance.

JPMorgan	Chase	does	not	record	U.S.	federal	income	taxes	on	the	undistributed earnings	of	certain	non-U.S.	subsidiaries,	to	the	extent	that	such	earnings	have been	reinvested	abroad	for	an	indefinite	period	of	time.	Changes	to	the	income tax	rates	applicable	to	these	non-U.S.	subsidiaries	may	have	a	material	impact	on the	effective	tax	rate	in	a	future	period	if	such	changes	were	to	occur.

The	Firm	adjusts	its	unrecognized	tax	benefits	as	necessary	when	additional information	becomes	available.	Uncertain	tax	positions	that	meet	the	more- likely-than-not	recognition	threshold	are	measured	to	determine	the	amount	of benefit	to	recognize.	An	uncertain	tax	position	is	measured	at	the	largest	amount of	benefit	that	management	believes	is	more	likely	than	not	to	be	realized	upon settlement.	It	is	possible	that	the	reassessment	of	JPMorgan	Chase's unrecognized	tax	benefits	may	have	a	material	impact	on	its	effective	income	tax rate	in	the	period	in	which	the	reassessment	occurs.

For	additional	information	on	income	taxes,	see	Note	26.

# Litigation	reserves

For	a	description	of	the	significant	estimates	and	judgments	associated	with establishing	litigation	reserves,	see Note	31.

# ACCOUNTING	AND	REPORTING	DEVELOPMENTS

# Financial	Accounting	Standards	Board	("FASB")	Standards	Adopted	during	2015

(a)	The	guidance	was	required	to	be	applied	retrospectively	and	accordingly,	certain	prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.

# FASB	Standards	Issued	but	not	yet	Adopted

	•	The	Firm	is	evaluating	the	potential	impact	of	the	remaining guidance	on	the	Consolidated	Financial	Statements.

(b) Early	adoption	is	permitted	for	the	requirement	to	report	changes	in	fair	value	due	to	the	Firm's	own	credit	risk	in	OCI,	and	the	Firm	is	planning	to	early	adopt	this	guidance	during	2016.

# NONEXCHANGE-TRADED	COMMODITY	DERIVATIVE	CONTRACTS	AT	FAIR	VALUE

In	the	normal	course	of	business,	JPMorgan	Chase	trades	nonexchange-traded commodity	derivative	contracts.	To	determine	the	fair	value	of	these	contracts, the	Firm	uses	various	fair	value	estimation	techniques,	primarily	based	on internal	models	with	significant	observable	market	parameters.	The	Firm's nonexchange-traded	commodity	derivative	contracts	are	primarily	energy- related.

The	following	table	summarizes	the	changes	in	fair	value	for	nonexchange-traded commodity	derivative	contracts	for	the	year	ended	December	31,	2015.

| (in	millions) | Asset	position | Liability	position |
| :--- | :--- | :--- |
| Net\tfair\tvalue\tof\tcontracts\toutstanding\tat\tJanuary\t1,\t2015 | $9,826 | $13,926 |
| Effect\tof\tlegally\tenforceable\tmaster\tnetting\tagreements | 14,327 | 13,211 |
| Gross\tfair\tvalue\tof\tcontracts\toutstanding\tat\tJanuary\t1,\t2015 | 24,153 | 27,137 |
| Contracts\trealized\tor\totherwise\tsettled | (13,419) | (12,583) |
| Fair\tvalue\tof\tnew\tcontracts | 3,704 | 5,027 |
| Changes\tin\tfair\tvalues\tattributable\tto\tchanges\tin\tvaluation\ttechniques\nand\tassumptions | — | — |
| Other\tchanges\tin\tfair\tvalue | 1,428 | (1,300) |
| Gross\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2015 | 15,866 | 18,281 |
| Effect\tof\tlegally\tenforceable\tmaster\tnetting\tagreements | (6,772) | (6,256) |
| Net\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2015 | $9,094 | $12,025 |

The	following	table	indicates	the	maturities	of	nonexchange-traded	commodity derivative	contracts	at	December	31,	2015.

| December	31,	2015	(in	millions) | Asset	position | Liability	position |
| :--- | :--- | :--- |
| Maturity\tless\tthan\t1\tyear | $8,487 | $9,242 |
| Maturity\t1–3\tyears | 5,636 | 6,148 |
| Maturity\t4–5\tyears | 1,122 | 1,931 |
| Maturity\tin\texcess\tof\t5\tyears | 621 | 960 |
| Gross\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2015 | 15,866 | 18,281 |
| Effect\tof\tlegally\tenforceable\tmaster\tnetting\tagreements | (6,772) | (6,256) |
| Net\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2015 | $9,094 | $12,025 |

From	time	to	time,	the	Firm	has	made	and	will	make	forward-looking	statements. These	statements	can	be	identified	by	the	fact	that	they	do	not	relate	strictly	to historical	or	current	facts.	Forward-looking	statements	often	use	words	such	as "anticipate,"	"target,"	"expect,"	"estimate,"	"intend,"	"plan,"	"goal,"	"believe," or	other	words	of	similar	meaning.	Forward-looking	statements	provide JPMorgan	Chase's	current	expectations	or	forecasts	of	future	events, circumstances,	results	or	aspirations.	JPMorgan	Chase's	disclosures	in	this Annual	Report	contain	forward-looking	statements	within	the	meaning	of	the Private	Securities	Litigation	Reform	Act	of	1995.	The	Firm	also	may	make forward-looking	statements	in	its	other	documents	filed	or	furnished	with	the Securities	and	Exchange	Commission.	In	addition,	the	Firm's	senior management	may	make	forward-looking	statements	orally	to	investors,	analysts, representatives	of	the	media	and	others.

All	forward-looking	statements	are,	by	their	nature,	subject	to	risks	and uncertainties,	many	of	which	are	beyond	the	Firm's	control.	JPMorgan	Chase's actual	future	results	may	differ	materially	from	those	set	forth	in	its	forward- looking	statements.	While	there	is	no	assurance	that	any	list	of	risks	and uncertainties	or	risk	factors	is	complete,	below	are	certain	factors	which	could cause	actual	results	to	differ	from	those	in	the	forward-looking	statements:

•Local,	regional	and	global	business,	economic	and	political	conditions	and geopolitical	events;

•Changes	in	laws	and	regulatory	requirements, including

capital	and	liquidity	requirements;

•Changes	in	trade,	monetary	and	fiscal	policies	and laws;

•Securities	and	capital	markets	behavior,	including	changes	in	market	liquidity and	volatility;

•Changes	in	investor	sentiment	or	consumer	spending	or	savings	behavior;

•Ability	of	the	Firm	to	manage	effectively	its	capital	and	liquidity,	including approval	of	its	capital	plans	by	banking	regulators;

•Changes	in	credit	ratings	assigned	to	the	Firm	or	its subsidiaries;

•Damage	to	the	Firm's reputation;

•Ability	of	the	Firm	to	deal	effectively	with	an	economic	slowdown	or	other economic	or	market	disruption;

•Technology	changes	instituted	by	the	Firm,	its	counterparties	or competitors;

•The	success	of	the	Firm's	business	simplification	initiatives	and	the effectiveness	of	its	control	agenda;

•Ability	of	the	Firm	to	develop	new	products	and	services,	and	the	extent	to which	products	or	services	previously	sold	by	the	Firm	(including	but	not limited	to	mortgages	and	asset-backed	securities)	require	the	Firm	to	incur liabilities	or	absorb	losses	not	contemplated	at	their	initiation	or	origination;

•Ability	of	the	Firm	to	address	enhanced	regulatory	requirements	affecting	its businesses;

•Acceptance	of	the	Firm's	new	and	existing	products	and	services	by	the marketplace	and	the	ability	of	the	Firm	to	innovate	and	to	increase	market share;

•Ability	of	the	Firm	to	attract	and	retain	qualified employees;

•Ability	of	the	Firm	to	control

expense;

# •Competitive	pressures;

•Changes	in	the	credit	quality	of	the	Firm's	customers	and	counterparties;

•Adequacy	of	the	Firm's	risk	management	framework,	disclosure	controls	and procedures	and	internal	control	over	financial	reporting;

•Adverse	judicial	or	regulatory proceedings;

•Changes	in	applicable	accounting

policies;

•Ability	of	the	Firm	to	determine	accurate	values	of	certain	assets	and liabilities;

•Occurrence	of	natural	or	man-made	disasters	or	calamities	or	conflicts	and the	Firm's	ability	to	deal	effectively	with	disruptions	caused	by	the	foregoing;

•Ability	of	the	Firm	to	maintain	the	security	of	its	financial,	accounting, technology,	data	processing	and	other	operating	systems	and	facilities;	and •Ability	of	the	Firm	to	effectively	defend	itself	against	cyberattacks	and	other attempts	by	unauthorized	parties	to	access	information	of	the	Firm	or	its customers	or	to	disrupt	the	Firm's	systems;	and

•The	other	risks	and	uncertainties	detailed	in	Part	I,	Item	1A:	Risk	Factors	in the	Firm's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31, 2015.

Any	forward-looking	statements	made	by	or	on	behalf	of	the	Firm	speak	only	as of	the	date	they	are	made,	and	JPMorgan	Chase	does	not	undertake	to	update forward-looking	statements	to	reflect	the	impact	of	circumstances	or	events	that arise	after	the	date	the	forward-looking	statements	were	made.	The	reader should,	however,	consult	any	further	disclosures	of	a	forward-looking	nature	the Firm	may	make	in	any	subsequent	Annual	Reports	on	Form	10-K,	Quarterly Reports	on	Form	10-Q,	or	Current	Reports	on	Form	8-K.

# Management's	report	on	internal	control	over	financial	reporting

Management	of	JPMorgan	Chase	&	Co.	("JPMorgan	Chase"	or	the	"Firm")	is responsible	for	establishing	and	maintaining	adequate	internal	control	over financial	reporting.	Internal	control	over	financial	reporting	is	a	process	designed by,	or	under	the	supervision	of,	the	Firm's	principal	executive	and	principal financial	officers,	or	persons	performing	similar	functions,	and	effected	by JPMorgan	Chase's	Board	of	Directors,	management	and	other	personnel,	to provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and the	preparation	of	financial	statements	for	external	purposes	in	accordance	with accounting	principles	generally	accepted	in	the	United	States	of	America.

JPMorgan	Chase's	internal	control	over	financial	reporting	includes	those policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records,	that,	in reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and	dispositions	of the	Firm's	assets;	(2)	provide	reasonable	assurance	that	transactions	are	recorded as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of the	Firm	are	being	made	only	in	accordance	with	authorizations	of	JPMorgan Chase's	management	and	directors;	and	(3)	provide	reasonable	assurance regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use	or disposition	of	the	Firm's	assets	that	could	have	a	material	effect	on	the	financial statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance with	the	policies	or	procedures	may	deteriorate.	Management	has	completed	an assessment	of	the	effectiveness	of	the	Firm's	internal	control	over	financial reporting	as	of	December	31,	2015.	In	making	the	assessment,	management	used the	"Internal	Control	—	Integrated	Framework"	("COSO	2013")	promulgated	by the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission ("COSO").

Based	upon	the	assessment	performed,	management	concluded	that	as	of December	31,	2015,	JPMorgan	Chase's	internal	control	over	financial	reporting was	effective	based	upon	the	COSO	2013	framework.	Additionally,	based	upon management's	assessment,	the	Firm	determined	that	there	were	no	material weaknesses	in	its	internal	control	over	financial	reporting	as	of	December	31, 2015.

The	effectiveness	of	the	Firm's	internal	control	over	financial	reporting	as	of December	31,	2015,	has	been	audited	by	PricewaterhouseCoopers	LLP,	an independent	registered	public	accounting	firm,	as	stated	in	their	report	which appears	herein.

James	Dimon

Chairman	and	Chief	Executive	Officer

Marianne	Lake

Executive	Vice	President	and	Chief	Financial	Officer

# Report	of	independent	registered	public	accounting	firm

# To	the	Board	of	Directors	and	Stockholders	of	JPMorgan	Chase	&	Co.:

In	our	opinion,	the	accompanying	consolidated	balance	sheets	and	the	related consolidated	statements	of	income,	comprehensive	income,	changes	in stockholders'	equity	and	cash	flows	present	fairly,	in	all	material	respects,	the financial	position	of	JPMorgan	Chase	&	Co.	and	its	subsidiaries	(the	"Firm")	at December	31,	2015	and	2014	and	the	results	of	their	operations	and	their	cash flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2015	in conformity	with	accounting	principles	generally	accepted	in	the	United	States	of America.	Also	in	our	opinion,	the	Firm	maintained,	in	all	material	respects, effective	internal	control	over	financial	reporting	as	of	December	31,	2015	based on	criteria	established	in	Internal	Control	–	Integrated	Framework	(2013)	issued by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission (COSO).	The	Firm's	management	is	responsible	for	these	financial	statements, for	maintaining	effective	internal	control	over	financial	reporting	and	for	its assessment	of	the	effectiveness	of	internal	control	over	financial	reporting, included	in	the	accompanying	"Management's	report	on	internal	control	over financial	reporting".	Our	responsibility	is	to	express	opinions	on	these	financial statements	and	on	the	Firm's	internal	control	over	financial	reporting	based	on our	integrated	audits.	We	conducted	our	audits	in	accordance	with	the	standards of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those standards	require	that	we	plan	and	perform	the	audits	to	obtain	reasonable assurance	about	whether	the	financial	statements	are	free	of	material misstatement	and	whether	effective	internal	control	over	financial	reporting	was maintained	in	all	material	respects.	Our	audits	of	the	financial	statements included	examining,	on	a	test	basis,	evidence	supporting	the	amounts	and disclosures	in	the	financial	statements,	assessing	the	accounting	principles	used and	significant	estimates	made	by	management,	and	evaluating	the	overall financial	statement	presentation.	Our	audit	of	internal	control	over	financial reporting	included	obtaining	an	understanding	of	internal	control	over	financial reporting,	assessing	the	risk	that	a

material	weakness	exists,	and	testing	and	evaluating	the	design	and	operating effectiveness	of	internal	control	based	on	the	assessed	risk.	Our	audits	also included	performing	such	other	procedures	as	we	considered	necessary	in	the circumstances.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our opinions.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and the	preparation	of	financial	statements	for	external	purposes	in	accordance	with generally	accepted	accounting	principles.	A	company's	internal	control	over financial	reporting	includes	those	policies	and	procedures	that	(i)	pertain	to	the maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the transactions	and	dispositions	of	the	assets	of	the	company;	(ii)	provide reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit preparation	of	financial	statements	in	accordance	with	generally	accepted accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are being	made	only	in	accordance	with	authorizations	of	management	and	directors of	the	company;	and	(iii)	provide	reasonable	assurance	regarding	prevention	or timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance with	the	policies	or	procedures	may	deteriorate.

# PricewaterhouseCoopers	LLP	Ÿ		300	Madison	Avenue	Ÿ		New	York,	NY	10017

# Consolidated	statements	of	income

| Year	ended	December	31,	(in	millions,	except	per	share	data) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Investment\tbanking\tfees | $6,751 | $6,542 | $6,354 |
| Principal\ttransactions | 10,408 | 10,531 | 10,141 |
| Lending-\tand\tdeposit-related\tfees | 5,694 | 5,801 | 5,945 |
| Asset\tmanagement,\tadministration\tand\tcommissions | 15,509 | 15,931 | 15,106 |
| Securities\tgains(a) | 202 | 77 | 667 |
| Mortgage\tfees\tand\trelated\tincome | 2,513 | 3,563 | 5,205 |
| Card\tincome | 5,924 | 6,020 | 6,022 |
| Other\tincome | 3,032 | 3,013 | 4,608 |
| Noninterest\trevenue | 50,033 | 51,478 | 54,048 |
| Interest\tincome | 50,973 | 51,531 | 52,669 |
| Interest\texpense | 7,463 | 7,897 | 9,350 |
| Net\tinterest\tincome | 43,510 | 43,634 | 43,319 |
| Total\tnet\trevenue | 93,543 | 95,112 | 97,367 |
| Provision\tfor\tcredit\tlosses | 3,827 | 3,139 | 225 |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 29,750 | 30,160 | 30,810 |
| Occupancy\texpense | 3,768 | 3,909 | 3,693 |
| Technology,\tcommunications\tand\tequipment\texpense | 6,193 | 5,804 | 5,425 |
| Professional\tand\toutside\tservices | 7,002 | 7,705 | 7,641 |
| Marketing | 2,708 | 2,550 | 2,500 |
| Other\texpense | 9,593 | 11,146 | 20,398 |
| Total\tnoninterest\texpense | 59,014 | 61,274 | 70,467 |
| Income\tbefore\tincome\ttax\texpense | 30,702 | 30,699 | 26,675 |
| Income\ttax\texpense | 6,260 | 8,954 | 8,789 |
| Net\tincome | $24,442 | $21,745 | $17,886 |
| Net\tincome\tapplicable\tto\tcommon\tstockholders | $22,406 | $20,077 | $16,557 |
| Net\tincome\tper\tcommon\tshare\tdata |  |  |  |
| Basic\tearnings\tper\tshare | $6.05 | $5.33 | $4.38 |
| Diluted\tearnings\tper\tshare | 6.00 | 5.29 | 4.34 |
| Weighted-average\tbasic\tshares | 3,700.4 | 3,763.5 | 3,782.4 |
| Weighted-average\tdiluted\tshares | 3,732.8 | 3,797.5 | 3,814.9 |
| Cash\tdividends\tdeclared\tper\tcommon\tshare | $1.72 | $1.58 | $1.44 |

The	Notes	to	Consolidated	Financial	Statements	are	an	integral	part	of	these	statements.

# Consolidated	statements	of	comprehensive	income

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tincome | $24,442 | $21,745 | $17,886 |
| Other\tcomprehensive\tincome/(loss),\tafter–tax |  |  |  |
| Unrealized\tgains/(losses)\ton\tinvestment\tsecurities | (2,144) | 1,975 | (4,070) |
| Translation\tadjustments,\tnet\tof\thedges | (15) | (11) | (41) |
| Cash\tflow\thedges | 51 | 44 | (259) |
| Defined\tbenefit\tpension\tand\tOPEB\tplans | 111 | (1,018) | 1,467 |
| Total\tother\tcomprehensive\tincome/(loss),\tafter–tax | (1,997) | 990 | (2,903) |
| Comprehensive\tincome | $22,445 | $22,735 | $14,983 |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  | 177 |

# Consolidated	balance	sheets

| December	31,	(in	millions,	except	share	data) | 2015 | 2014 |
| :--- | :--- | :--- |
| Assets |  |  |
| Cash\tand\tdue\tfrom\tbanks | $20,490 | $27,831 |
| Deposits\twith\tbanks | 340,015 | 484,477 |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements\t(included\t $23,141\tand\t$28,585\tat\tfair\tvalue) | 212,575 | 215,803 |
| Securities\tborrowed\t(included\t$395\tand\t$992\tat\tfair\tvalue) | 98,721 | 110,435 |
| Trading\tassets\t(included\tassets\tpledged\tof\t $115,284\tand\t$125,034) | 343,839 | 398,988 |
| Securities\t(included\t$241,754\tand\t$298,752\tat\tfair\tvalue\tand\tassets\tpledged\tof\t $14,883\tand\t$24,912) | 290,827 | 348,004 |
| Loans\t(included\t$2,861\tand\t$2,611\tat\tfair\tvalue) | 837,299 | 757,336 |
| Allowance\tfor\tloan\tlosses | (13,555) | (14,185) |
| Loans,\tnet\tof\tallowance\tfor\tloan\tlosses | 823,744 | 743,151 |
| Accrued\tinterest\tand\taccounts\treceivable | 46,605 | 70,079 |
| Premises\tand\tequipment | 14,362 | 15,133 |
| Goodwill | 47,325 | 47,647 |
| Mortgage\tservicing\trights | 6,608 | 7,436 |
| Other\tintangible\tassets | 1,015 | 1,192 |
| Other\tassets\t(included\t$7,604\tand\t$11,909\tat\tfair\tvalue\tand\tassets\tpledged\tof\t $1,286\tand\t$1,399) | 105,572 | 102,098 |
| Total\tassets(a) | $2,351,698 | $2,572,274 |
| Liabilities |  |  |
| Deposits\t(included\t$12,516\tand\t$8,807\tat\tfair\tvalue) | $1,279,715 | $1,363,427 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements\t(included\t $3,526\tand\t$2,979\tat\tfair\tvalue) | 152,678 | 192,101 |
| Commercial\tpaper | 15,562 | 66,344 |
| Other\tborrowed\tfunds\t(included\t$9,911\tand\t$14,739\tat\tfair\tvalue) | 21,105 | 30,222 |
| Trading\tliabilities | 126,897 | 152,815 |
| Accounts\tpayable\tand\tother\tliabilities\t(included\t $4,401\tand\t$4,155\tat\tfair\tvalue) | 177,638 | 206,939 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tvariable\tinterest\tentities\t(included\t $787\tand\t$2,162\tat\tfair\tvalue) | 41,879 | 52,320 |
| Long-term\tdebt\t(included\t$33,065\tand\t$30,226\tat\tfair\tvalue) | 288,651 | 276,379 |
| Total\tliabilities(a) | 2,104,125 | 2,340,547 |
| Commitments\tand\tcontingencies\t(see\tNotes\t29,\t30\tand\t31) |  |  |
| Stockholders'\tequity |  |  |
| Preferred\tstock\t($1\tpar\tvalue;\tauthorized\t200,000,000\tshares:\tissued\t2,606,750\tand\t2,006,250\tshares) | 26,068 | 20,063 |
| Common\tstock\t($1\tpar\tvalue;\tauthorized\t9,000,000,000\tshares;\tissued\t4,104,933,895\tshares) | 4,105 | 4,105 |
| Additional\tpaid-in\tcapital | 92,500 | 93,270 |
| Retained\tearnings | 146,420 | 129,977 |
| Accumulated\tother\tcomprehensive\tincome | 192 | 2,189 |
| Shares\theld\tin\trestricted\tstock\tunits\t("RSU")\ttrust,\tat\tcost\t( 472,953\tshares) | (21) | (21) |
| Treasury\tstock,\tat\tcost\t(441,459,392\tand\t390,144,630\tshares) | (21,691) | (17,856) |
| Total\tstockholders'\tequity | 247,573 | 231,727 |
| Total\tliabilities\tand\tstockholders'\tequity | $2,351,698 | $2,572,274 |

(a) The	following	table	presents	information	on	assets	and	liabilities	related	to	VIEs	that	are	consolidated	by	the	Firm	at	December	31,	2015	and	2014.	The	difference	between	total	VIE	assets	and	liabilities	represents	the	Firm's	interests	in	those entities,	which	were	eliminated	in	consolidation.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Assets |  |  |
| Trading\tassets | $3,736 | $9,090 |
| Loans | 75,104 | 68,880 |
| All\tother\tassets | 2,765 | 1,815 |
| Total\tassets | $81,605 | $79,785 |
| Liabilities |  |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\tvariable\tinterest\tentities | $41,879 | $52,320 |
| All\tother\tliabilities | 809 | 949 |
| Total\tliabilities | $42,688 | $53,269 |

The	assets	of	the	consolidated	VIEs	are	used	to	settle	the	liabilities	of	those	entities.	The	holders	of	the	beneficial	interests	do	not	have	recourse	to	the	general	credit	of	JPMorgan	Chase.	At	both December	31,	2015	and	2014,	the	Firm	provided limited	program-wide	credit	enhancement	of	$2.0	billion,	related	to	its	Firm-administered	multi-seller	conduits,	which	are	eliminated	in	consolidation.	For	further	discussion,	see	Note	16.

# Consolidated	statements	of	changes	in	stockholders'	equity

| Year	ended	December	31,	(in	millions,	except	per	share	data) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Preferred\tstock |  |  |  |
| Balance\tat\tJanuary\t1 | $20,063 | $11,158 | $9,058 |
| Issuance\tof\tpreferred\tstock | 6,005 | 8,905 | 3,900 |
| Redemption\tof\tpreferred\tstock | — | — | (1,800) |
| Balance\tat\tDecember\t31 | 26,068 | 20,063 | 11,158 |
| Common\tstock |  |  |  |
| Balance\tat\tJanuary\t1\tand\tDecember\t31 | 4,105 | 4,105 | 4,105 |
| Additional\tpaid-in\tcapital |  |  |  |
| Balance\tat\tJanuary\t1 | 93,270 | 93,828 | 94,604 |
| Shares\tissued\tand\tcommitments\tto\tissue\tcommon\tstock\tfor\temployee\tstock-based\tcompensation\tawards,\tand\trelated\ttax\teffects | (436) | (508) | (752) |
| Other | (334) | (50) | (24) |
| Balance\tat\tDecember\t31 | 92,500 | 93,270 | 93,828 |
| Retained\tearnings |  |  |  |
| Balance\tat\tJanuary\t1 | 129,977 | 115,435 | 104,223 |
| Cumulative\teffect\tof\tchange\tin\taccounting\tprinciple | — | — | (284) |
| Balance\tat\tbeginning\tof\tyear,\tadjusted | 129,977 | 115,435 | 103,939 |
| Net\tincome | 24,442 | 21,745 | 17,886 |
| Dividends\tdeclared: |  |  |  |
| Preferred\tstock | (1,515) | (1,125) | (805) |
|  | (6,484) | (6,078) | (5,585) |
| Balance\tat\tDecember\t31 | 146,420 | 129,977 | 115,435 |
| Accumulated\tother\tcomprehensive\tincome |  |  |  |
| Balance\tat\tJanuary\t1 | 2,189 | 1,199 | 4,102 |
| Other\tcomprehensive\tincome/(loss) | (1,997) | 990 | (2,903) |
| Balance\tat\tDecember\t31 | 192 | 2,189 | 1,199 |
| Shares\theld\tin\tRSU\tTrust,\tat\tcost |  |  |  |
| Balance\tat\tJanuary\t1\tand\tDecember\t31 | (21) | (21) | (21) |
| Treasury\tstock,\tat\tcost |  |  |  |
| Balance\tat\tJanuary\t1 | (17,856) | (14,847) | (12,002) |
| Purchase\tof\ttreasury\tstock | (5,616) | (4,760) | (4,789) |
| Reissuance\tfrom\ttreasury\tstock | 1,781 | 1,751 | 1,944 |
| Balance\tat\tDecember\t31 | (21,691) | (17,856) | (14,847) |
| Total\tstockholders'\tequity | $247,573 | $231,727 | $210,857 |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  | 179 |

# Consolidated	statements	of	cash	flows

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Operating\tactivities |  |  |  |
| Net\tincome | $24,442 | $21,745 | $17,886 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby/(used\tin)\toperating\tactivities: |  |  |  |
| Provision\tfor\tcredit\tlosses | 3,827 | 3,139 | 225 |
| Depreciation\tand\tamortization | 4,940 | 4,759 | 5,306 |
| Deferred\ttax\texpense | 1,333 | 4,362 | 8,139 |
| Other | 1,785 | 2,113 | 1,552 |
| Originations\tand\tpurchases\tof\tloans\theld-for-sale | (48,109) | (67,525) | (75,928) |
| Proceeds\tfrom\tsales,\tsecuritizations\tand\tpaydowns\tof\tloans\theld-for-sale | 49,363 | 71,407 | 73,566 |
| Net\tchange\tin: |  |  |  |
| Trading\tassets | 62,212 | (24,814) | 89,110 |
| Securities\tborrowed | 12,165 | 1,020 | 7,562 |
| Accrued\tinterest\tand\taccounts\treceivable | 22,664 | (3,637) | (2,340) |
| Other\tassets | (3,701) | (9,166) | 526 |
| Trading\tliabilities | (28,972) | 26,818 | (9,772) |
| Accounts\tpayable\tand\tother\tliabilities | (23,361) | 6,058 | (5,750) |
| Other\toperating\tadjustments | (5,122) | 314 | (2,129) |
| Net\tcash\tprovided\tby\toperating\tactivities | 73,466 | 36,593 | 107,953 |
| Investing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Deposits\twith\tbanks | 144,462 | (168,426) | (194,363) |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements | 3,190 | 30,848 | 47,726 |
| Held-to-maturity\tsecurities: |  |  |  |
| Proceeds\tfrom\tpaydowns\tand\tmaturities | 6,099 | 4,169 | 189 |
| Purchases | (6,204) | (10,345) | (24,214) |
| Available-for-sale\tsecurities: |  |  |  |
| Proceeds\tfrom\tpaydowns\tand\tmaturities | 76,448 | 90,664 | 89,631 |
| Proceeds\tfrom\tsales | 40,444 | 38,411 | 73,312 |
| Purchases | (70,804) | (121,504) | (130,266) |
| Proceeds\tfrom\tsales\tand\tsecuritizations\tof\tloans\theld-for-investment | 18,604 | 20,115 | 12,033 |
| Other\tchanges\tin\tloans,\tnet | (108,962) | (51,749) | (23,721) |
| All\tother\tinvesting\tactivities,\tnet | 3,703 | 2,181 | (828) |
| Net\tcash\tprovided\tby/(used\tin)\tinvesting\tactivities | 106,980 | (165,636) | (150,501) |
| Financing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Deposits | (88,678) | 89,346 | 81,476 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements | (39,415) | 10,905 | (58,867) |
| Commercial\tpaper\tand\tother\tborrowed\tfunds | (57,828) | 9,242 | 2,784 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tvariable\tinterest\tentities | (5,632) | (834) | (10,433) |
| Proceeds\tfrom\tlong-term\tborrowings | 79,611 | 78,515 | 83,546 |
| Payments\tof\tlong-term\tborrowings | (67,247) | (65,275) | (60,497) |
| Proceeds\tfrom\tissuance\tof\tpreferred\tstock | 5,893 | 8,847 | 3,873 |
| Redemption\tof\tpreferred\tstock | — | — | (1,800) |
| Treasury\tstock\tand\twarrants\trepurchased | (5,616) | (4,760) | (4,789) |
| Dividends\tpaid | (7,873) | (6,990) | (6,056) |
| All\tother\tfinancing\tactivities,\tnet | (726) | (768) | (913) |
| Net\tcash\tprovided\tby/(used\tin)\tfinancing\tactivities | (187,511) | 118,228 | 28,324 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tdue\tfrom\tbanks | (276) | (1,125) | 272 |
| Net\tdecrease\tin\tcash\tand\tdue\tfrom\tbanks | (7,341) | (11,940) | (13,952) |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tbeginning\tof\tthe\tperiod | 27,831 | 39,771 | 53,723 |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tend\tof\tthe\tperiod | $20,490 | $27,831 | $39,771 |
| Cash\tinterest\tpaid | $7,220 | $8,194 | $9,573 |
| Cash\tincome\ttaxes\tpaid,\tnet | 9,423 | 1,392 | 3,502 |

# Notes	to	consolidated	financial	statements

# Note	1	–	Basis	of	presentation

JPMorgan	Chase	&	Co.	("JPMorgan	Chase"	or	the	"Firm"),	a	financial	holding company	incorporated	under	Delaware	law	in	1968,	is	a	leading	global	financial services	firm	and	one	of	the	largest	banking	institutions	in	the	United	States	of America	("U.S."),	with	operations	worldwide.	The	Firm	is	a	leader	in	investment banking,	financial	services	for	consumers	and	small	business,	commercial banking,	financial	transaction	processing	and	asset	management.	For	a	discussion of	the	Firm's	business	segments,	see	Note	33.

The	accounting	and	financial	reporting	policies	of	JPMorgan	Chase	and	its subsidiaries	conform	to	accounting	principles	generally	accepted	in	the	U.S. ("U.S.	GAAP").	Additionally,	where	applicable,	the	policies	conform	to	the accounting	and	reporting	guidelines	prescribed	by	regulatory	authorities.

Certain	amounts	reported	in	prior	periods	have	been	reclassified	to	conform	with the	current	presentation.

# Consolidation

The	Consolidated	Financial	Statements	include	the	accounts	of	JPMorgan	Chase and	other	entities	in	which	the	Firm	has	a	controlling	financial	interest.	All material	intercompany	balances	and	transactions	have	been	eliminated.

Assets	held	for	clients	in	an	agency	or	fiduciary	capacity	by	the	Firm	are	not assets	of	JPMorgan	Chase	and	are	not	included	on	the	Consolidated	balance sheets.

The	Firm	determines	whether	it	has	a	controlling	financial	interest	in	an	entity	by first	evaluating	whether	the	entity	is	a	voting	interest	entity	or	a	variable	interest entity	("VIE").

# Voting	Interest	Entities

Voting	interest	entities	are	entities	that	have	sufficient	equity	and	provide	the equity	investors	voting	rights	that	enable	them	to	make	significant	decisions relating	to	the	entity's	operations.	For	these	types	of	entities,	the	Firm's determination	of	whether	it	has	a	controlling	interest	is	primarily	based	on	the amount	of	voting	equity	interests	held.	Entities	in	which	the	Firm	has	a controlling	financial	interest,	through	ownership	of	the	majority	of	the	entities' voting	equity	interests,	or	through	other	contractual	rights	that	give	the	Firm control,	are	consolidated	by	the	Firm.

Investments	in	companies	in	which	the	Firm	has	significant	influence	over operating	and	financing	decisions	(but	does	not	own	a	majority	of	the	voting equity	interests)	are	accounted	for	(i)	in	accordance	with	the	equity	method	of accounting	(which	requires	the	Firm	to	recognize	its	proportionate	share	of	the entity's	net	earnings),	or	(ii)	at	fair	value	if	the	fair	value	option	was	elected. These	investments	are	generally	included	in	other	assets,	with	income	or	loss included	in	other	income.

Certain	Firm-sponsored	asset	management	funds	are	structured	as	limited partnerships	or	limited	liability	companies.	For	many	of	these	entities,	the	Firm is	the	general	partner	or	managing	member,	but	the	non-affiliated

partners	or	members	have	the	ability	to	remove	the	Firm	as	the	general	partner	or managing	member	without	cause	(i.e.,	kick-out	rights),	based	on	a	simple majority	vote,	or	the	non-affiliated	partners	or	members	have	rights	to	participate in	important	decisions.	Accordingly,	the	Firm	does	not	consolidate	these	funds. In	the	limited	cases	where	the	nonaffiliated	partners	or	members	do	not	have substantive	kick-out	or	participating	rights,	the	Firm	consolidates	the	funds.

The	Firm's	investment	companies	have	investments	in	both	publicly-held	and privately-held	entities,	including	investments	in	buyouts,	growth	equity	and venture	opportunities.	These	investments	are	accounted	for	under	investment company	guidelines	and	accordingly,	irrespective	of	the	percentage	of	equity ownership	interests	held,	are	carried	on	the	Consolidated	balance	sheets	at	fair value,	and	are	recorded	in	other	assets.

# Variable	Interest	Entities

VIEs	are	entities	that,	by	design,	either	(1)	lack	sufficient	equity	to	permit	the entity	to	finance	its	activities	without	additional	subordinated	financial	support from	other	parties,	or	(2)	have	equity	investors	that	do	not	have	the	ability	to make	significant	decisions	relating	to	the	entity's	operations	through	voting rights,	or	do	not	have	the	obligation	to	absorb	the	expected	losses,	or	do	not	have the	right	to	receive	the	residual	returns	of	the	entity.

The	most	common	type	of	VIE	is	a	special	purpose	entity	("SPE").	SPEs	are commonly	used	in	securitization	transactions	in	order	to	isolate	certain	assets	and distribute	the	cash	flows	from	those	assets	to	investors.	The	basic	SPE	structure involves	a	company	selling	assets	to	the	SPE;	the	SPE	funds	the	purchase	of those	assets	by	issuing	securities	to	investors.	The	legal	documents	that	govern the	transaction	specify	how	the	cash	earned	on	the	assets	must	be	allocated	to	the SPE's	investors	and	other	parties	that	have	rights	to	those	cash	flows.	SPEs	are generally	structured	to	insulate	investors	from	claims	on	the	SPE's	assets	by creditors	of	other	entities,	including	the	creditors	of	the	seller	of	the	assets.

The	primary	beneficiary	of	a	VIE	(i.e.,	the	party	that	has	a	controlling	financial interest)	is	required	to	consolidate	the	assets	and	liabilities	of	the	VIE.	The primary	beneficiary	is	the	party	that	has	both	(1)	the	power	to	direct	the	activities of	the	VIE	that	most	significantly	impact	the	VIE's	economic	performance;	and (2)	through	its	interests	in	the	VIE,	the	obligation	to	absorb	losses	or	the	right	to receive	benefits	from	the	VIE	that	could	potentially	be	significant	to	the	VIE.

To	assess	whether	the	Firm	has	the	power	to	direct	the	activities	of	a	VIE	that most	significantly	impact	the	VIE's	economic	performance,	the	Firm	considers all	the	facts	and	circumstances,	including	its	role	in	establishing	the	VIE	and	its ongoing	rights	and	responsibilities.	This	assessment	includes,	first,	identifying the	activities	that	most	significantly	impact	the	VIE's	economic	performance; and	second,	identifying	which	party,	if	any,	has	power	over	those

activities.	In	general,	the	parties	that	make	the	most	significant	decisions affecting	the	VIE	(such	as	asset	managers,	collateral	managers,	servicers,	or owners	of	call	options	or	liquidation	rights	over	the	VIE's	assets)	or	have	the right	to	unilaterally	remove	those	decision-makers	are	deemed	to	have	the	power to	direct	the	activities	of	a	VIE.

To	assess	whether	the	Firm	has	the	obligation	to	absorb	losses	of	the	VIE	or	the right	to	receive	benefits	from	the	VIE	that	could	potentially	be	significant	to	the VIE,	the	Firm	considers	all	of	its	economic	interests,	including	debt	and	equity investments,	servicing	fees,	and	derivatives	or	other	arrangements	deemed	to	be variable	interests	in	the	VIE.	This	assessment	requires	that	the	Firm	apply judgment	in	determining	whether	these	interests,	in	the	aggregate,	are	considered potentially	significant	to	the	VIE.	Factors	considered	in	assessing	significance include:	the	design	of	the	VIE,	including	its	capitalization	structure; subordination	of	interests;	payment	priority;	relative	share	of	interests	held across	various	classes	within	the	VIE's	capital	structure;	and	the	reasons	why	the interests	are	held	by	the	Firm.

The	Firm	performs	on-going	reassessments	of:	(1)	whether	entities	previously evaluated	under	the	majority	voting-interest	framework	have	become	VIEs, based	on	certain	events,	and	therefore	subject	to	the	VIE	consolidation framework;	and	(2)	whether	changes	in	the	facts	and	circumstances	regarding	the Firm's	involvement	with	a	VIE	cause	the	Firm's	consolidation	conclusion	to change.

In	February	2010,	the	Financial	Accounting	Standards	Board	("FASB")	issued an	amendment	which	deferred	the	requirements	of	the	accounting	guidance	for VIEs	for	certain	investment	funds,	including	mutual	funds,	private	equity	funds and	hedge	funds.	For	the	funds	to	which	the	deferral	applies,	the	Firm	continues to	apply	other	existing	authoritative	accounting	guidance	to	determine	whether such	funds	should	be	consolidated.

# Use	of	estimates	in	the	preparation	of	consolidated	financial	statements

The	preparation	of	the	Consolidated	Financial	Statements	requires	management to	make	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets	and liabilities,	revenue	and	expense,	and	disclosures	of	contingent	assets	and liabilities.	Actual	results	could	be	different	from	these	estimates.

# Foreign	currency	translation

JPMorgan	Chase	revalues	assets,	liabilities,	revenue	and	expense	denominated	in non-U.S.	currencies	into	U.S.	dollars	using	applicable	exchange	rates.

Gains	and	losses	relating	to	translating	functional	currency	financial	statements for	U.S.	reporting	are	included	in	other	comprehensive	income/(loss)	("OCI") within	stockholders'	equity.	Gains	and	losses	relating	to	nonfunctional	currency transactions,	including	non-U.S.	operations	where	the	functional	currency	is	the U.S.	dollar,	are	reported	in	the	Consolidated	statements	of	income.

# Offsetting	assets	and	liabilities

U.S.	GAAP	permits	entities	to	present	derivative	receivables	and	derivative payables	with	the	same	counterparty	and	the	related	cash	collateral	receivables and	payables	on	a	net	basis	on	the	Consolidated	balance	sheets	when	a	legally enforceable	master	netting	agreement	exists.	U.S.	GAAP	also	permits	securities sold	and	purchased	under	repurchase	agreements	to	be	presented	net	when specified	conditions	are	met,	including	the	existence	of	a	legally	enforceable master	netting	agreement.	The	Firm	has	elected	to	net	such	balances	when	the specified	conditions	are	met.

The	Firm	uses	master	netting	agreements	to	mitigate	counterparty	credit	risk	in certain	transactions,	including	derivatives	transactions,	repurchase	and	reverse repurchase	agreements,	and	securities	borrowed	and	loaned	agreements.	A master	netting	agreement	is	a	single	contract	with	a	counterparty	that	permits multiple	transactions	governed	by	that	contract	to	be	terminated	and	settled through	a	single	payment	in	a	single	currency	in	the	event	of	a	default	(e.g., bankruptcy,	failure	to	make	a	required	payment	or	securities	transfer	or	deliver collateral	or	margin	when	due	after	expiration	of	any	grace	period).	Upon	the exercise	of	termination	rights	by	the	non-defaulting	party	(i)	all	transactions	are terminated,	(ii)	all	transactions	are	valued	and	the	positive	value	or	"in	the money"	transactions	are	netted	against	the	negative	value	or	"out	of	the	money" transactions	and	(iii)	the	only	remaining	payment	obligation	is	of	one	of	the parties	to	pay	the	netted	termination	amount.	Upon	exercise	of	repurchase agreement	and	securities	loan	default	rights	in	general	(i)	all	transactions	are terminated	and	accelerated,	(ii)	all	values	of	securities	or	cash	held	or	to	be delivered	are	calculated,	and	all	such	sums	are	netted	against	each	other	and	(iii) the	only	remaining	payment	obligation	is	of	one	of	the	parties	to	pay	the	netted termination	amount.

Typical	master	netting	agreements	for	these	types	of	transactions	also	often contain	a	collateral/margin	agreement	that	provides	for	a	security	interest	in,	or title	transfer	of,	securities	or	cash	collateral/margin	to	the	party	that	has	the	right to	demand	margin	(the	"demanding	party").	The	collateral/margin	agreement typically	requires	a	party	to	transfer	collateral/margin	to	the	demanding	party with	a	value	equal	to	the	amount	of	the	margin	deficit	on	a	net	basis	across	all transactions	governed	by	the	master	netting	agreement,	less	any	threshold.	The collateral/margin	agreement	grants	to	the	demanding	party,	upon	default	by	the counterparty,	the	right	to	set-off	any	amounts	payable	by	the	counterparty	against any	posted	collateral	or	the	cash	equivalent	of	any	posted	collateral/margin.	It also	grants	to	the	demanding	party	the	right	to	liquidate	collateral/margin	and	to apply	the	proceeds	to	an	amount	payable	by	the	counterparty.

For	further	discussion	of	the	Firm's	derivative	instruments,	see	Note	6.	For further	discussion	of	the	Firm's	repurchase	and	reverse	repurchase	agreements, and	securities	borrowing	and	lending	agreements,	see	Note	13.

# Simplifying	the	presentation	of	debt	issuance	costs

Effective	October	1,	2015,	the	Firm	early	adopted	new	accounting	guidance	that simplifies	the	presentation	of	debt	issuance	costs,	by	requiring	that	unamortized debt	issuance	costs	be	presented	as	a	reduction	of	the	applicable	liability	rather than	as	an	asset.	The	adoption	of	this	guidance	had	no	material	impact	on	the Firm's	Consolidated	balance	sheets,	and	no	impact	on	the	Firm's	consolidated results	of	operations.	The	guidance	was	required	to	be	applied	retrospectively, and	accordingly,	certain	prior	period	amounts	have	been	revised	to	conform	with the	current	period	presentation.

# Investments	in	qualified	affordable	housing	projects

Effective	January	1,	2015,	the	Firm	adopted	new	accounting	guidance	for investments	in	affordable	housing	projects	that	qualify	for	the	low-income housing	tax	credit,	which	impacted	the	Corporate	&	Investment	Bank	("CIB"). As	a	result	of	the	adoption	of	this	new	guidance,	the	Firm	made	an	accounting policy	election	to	amortize	the	initial	cost	of	its	qualifying	investments	in proportion	to	the	tax	credits	and	other	benefits	received,	and	to	present	the amortization	as	a	component	of	income	tax	expense;	previously	such	amounts were	predominantly	presented	in	other	income.	The	guidance	was	required	to	be applied	retrospectively,	and	accordingly,	certain	prior	period	amounts	have	been revised	to	conform	with	the	current	period	presentation.	The	cumulative	effect	on retained	earnings	was	a	reduction	of	$284	million	as	of	January	1,	2013.	The adoption	of	this	accounting	guidance	resulted	in	an	increase	of	$907	million	and $924	million	in	other	income	and	income	tax	expense,	respectively,	for	the	year ended	December	31,	2014	and	$761	million	and	$798	million,	respectively,	for the	year	ended	December	2013,	which	led	to	an	increase	of	approximately	2%	in the	effective	tax	rate	for	the	year	ended	December	31,	2014	and	2013.	The impact	on	net	income	and	earnings	per

share	in	the	periods	affected	was	not	material.	For	further	information,	see	Note 26.

# Statements	of	cash	flows

For	JPMorgan	Chase's	Consolidated	statements	of	cash	flows,	cash	is	defined	as those	amounts	included	in	cash	and	due	from	banks.

# Significant	accounting	policies

The	following	table	identifies	JPMorgan	Chase's	other	significant	accounting policies	and	the	Note	and	page	where	a	detailed	description	of	each	policy	can	be found.

# Note	2	–	Business	changes	and	developments

# Private	Equity	sale

As	part	of	the	Firm's	business	simplification	agenda,	the	sale	of	a	portion	of	the Private	Equity	Business	("Private	Equity	sale")	was	completed	on	January	9, 2015.	Concurrent	with	the	sale,	a	new	independent	management	company	was formed	by	the	former	One	Equity	Partners	investment	professionals.	The	new management	company	provides	investment	management	services	to	the	acquirer of	the	investments	sold	in	the	Private	Equity	sale	and	to	the	Firm	for	the	portion of	the	private	equity	investments	that	were	retained	by	the	Firm.	The	sale	of	the investments	did	not	have	a	material	impact	on	the	Firm's	Consolidated	balance sheets	or	its	results	of	operations.

# Note	3	–	Fair	value	measurement

JPMorgan	Chase	carries	a	portion	of	its	assets	and	liabilities	at	fair	value.	These assets	and	liabilities	are	predominantly	carried	at	fair	value	on	a	recurring	basis (i.e.,	assets	and	liabilities	that	are	measured	and	reported	at	fair	value	on	the Firm's	Consolidated	balance	sheets).	Certain	assets	(e.g.,	certain	mortgage, home	equity	and	other	loans	where	the	carrying	value	is	based	on	the	fair	value of	the	underlying	collateral),	liabilities	and	unfunded	lending-related commitments	are	measured	at	fair	value	on	a	nonrecurring	basis;	that	is,	they	are not	measured	at	fair	value	on	an	ongoing	basis	but	are	subject	to	fair	value adjustments	only	in	certain	circumstances	(for	example,	when	there	is	evidence of	impairment).

Fair	value	is	defined	as	the	price	that	would	be	received	to	sell	an	asset	or	paid	to transfer	a	liability	in	an	orderly	transaction	between	market	participants	at	the measurement	date.	Fair	value	is	based	on	quoted	market	prices,	where	available. If	listed	prices	or	quotes	are	not	available,	fair	value	is	based	on	models	that consider	relevant	transaction	characteristics	(such	as	maturity)	and	use	as	inputs observable	or	unobservable	market	parameters,	including	but	not	limited	to	yield curves,	interest	rates,	volatilities,	equity	or	debt	prices,	foreign	exchange	rates and	credit	curves.	Valuation	adjustments	may	be	made	to	ensure	that	financial instruments	are	recorded	at	fair	value,	as	described	below.

The	level	of	precision	in	estimating	unobservable	market	inputs	or	other	factors can	affect	the	amount	of	gain	or	loss	recorded	for	a	particular	position. Furthermore,	while	the	Firm	believes	its	valuation	methods	are	appropriate	and consistent	with	those	of	other	market	participants,	the	methods	and	assumptions used	reflect	management	judgment	and	may	vary	across	the	Firm's	businesses and	portfolios.

The	Firm	uses	various	methodologies	and	assumptions	in	the	determination	of fair	value.	The	use	of	different	methodologies	or	assumptions	by	other	market participants	compared	with	those	used	by	the	Firm	could	result	in	a	different estimate	of	fair	value	at	the	reporting	date.

# Valuation	process

Risk-taking	functions	are	responsible	for	providing	fair	value	estimates	for	assets and	liabilities	carried	on	the	Consolidated	balance	sheets	at	fair	value.	The Firm's	valuation	control	function,	which	is	part	of	the	Firm's	Finance	function and	independent	of	the	risk-taking	functions,	is	responsible	for	verifying	these estimates	and	determining	any	fair	value	adjustments	that	may	be	required	to ensure	that	the	Firm's	positions	are	recorded	at	fair	value.	In	addition,	the firmwide	Valuation	Governance	Forum	("VGF")	is	composed	of	senior	finance and	risk	executives	and	is	responsible	for	overseeing	the	management	of	risks arising	from	valuation	activities	conducted	across	the	Firm.	The	VGF	is	chaired by	the	Firmwide	head	of	the	valuation	control	function	(under	the	direction	of the	Firm's	Chief	Financial	Officer	("CFO")),	and

includes	sub-forums	covering	the	Corporate	&	Investment	Bank,	Consumer	& Community	Banking	("CCB"),	Commercial	Banking,	Asset	Management	and certain	corporate	functions	including	Treasury	and	Chief	Investment	Office ("CIO").

The	valuation	control	function	verifies	fair	value	estimates	provided	by	the	risk- taking	functions	by	leveraging	independently	derived	prices,	valuation	inputs and	other	market	data,	where	available.	Where	independent	prices	or	inputs	are not	available,	additional	review	is	performed	by	the	valuation	control	function	to ensure	the	reasonableness	of	the	estimates.	The	review	may	include	evaluating the	limited	market	activity	including	client	unwinds,	benchmarking	of	valuation inputs	to	those	for	similar	instruments,	decomposing	the	valuation	of	structured instruments	into	individual	components,	comparing	expected	to	actual	cash flows,	reviewing	profit	and	loss	trends,	and	reviewing	trends	in	collateral valuation.	There	are	also	additional	levels	of	management	review	for	more significant	or	complex	positions.

The	valuation	control	function	determines	any	valuation	adjustments	that	may	be required	to	the	estimates	provided	by	the	risk-taking	functions.	No	adjustments are	applied	to	the	quoted	market	price	for	instruments	classified	within	level	1	of the	fair	value	hierarchy	(see	below	for	further	information	on	the	fair	value hierarchy).	For	other	positions,	judgment	is	required	to	assess	the	need	for valuation	adjustments	to	appropriately	reflect	liquidity	considerations, unobservable	parameters,	and,	for	certain	portfolios	that	meet	specified	criteria, the	size	of	the	net	open	risk	position.	The	determination	of	such	adjustments follows	a	consistent	framework	across	the	Firm:

•Liquidity	valuation	adjustments	are	considered	where	an	observable	external price	or	valuation	parameter	exists	but	is	of	lower	reliability,	potentially	due to	lower	market	activity.	Liquidity	valuation	adjustments	are	applied	and determined	based	on	current	market	conditions.	Factors	that	may	be considered	in	determining	the	liquidity	adjustment	include	analysis	of:	(1)	the estimated	bid-offer	spread	for	the	instrument	being	traded;	(2)	alternative pricing	points	for	similar	instruments	in	active	markets;	and	(3)	the	range	of reasonable	values	that	the	price	or	parameter	could	take.

•The	Firm	manages	certain	portfolios	of	financial	instruments	on	the	basis	of net	open	risk	exposure	and,	as	permitted	by	U.S.	GAAP,	has	elected	to estimate	the	fair	value	of	such	portfolios	on	the	basis	of	a	transfer	of	the	entire net	open	risk	position	in	an	orderly	transaction.	Where	this	is	the	case, valuation	adjustments	may	be	necessary	to	reflect	the	cost	of	exiting	a	larger- than-normal	market-size	net	open	risk	position.	Where	applied,	such adjustments	are	based	on	factors	that	a	relevant	market	participant	would consider	in	the	transfer	of	the	net	open	risk	position,	including	the	size	of	the adverse	market	move	that	is	likely	to	occur	during	the	period	required	to reduce	the	net	open	risk	position	to	a	normal	market-size.

•Unobservable	parameter	valuation	adjustments	may	be	made	when	positions are	valued	using	prices	or	input	parameters	to	valuation	models	that	are unobservable	due	to	a	lack	of	market	activity	or	because	they	cannot	be implied	from	observable	market	data.	Such	prices	or	parameters	must	be estimated	and	are,	therefore,	subject	to	management	judgment.	Unobservable parameter	valuation	adjustments	are	applied	to	reflect	the	uncertainty inherent	in	the	resulting	valuation	estimate.

Where	appropriate,	the	Firm	also	applies	adjustments	to	its	estimates	of	fair value	in	order	to	appropriately	reflect	counterparty	credit	quality,	the	Firm's	own creditworthiness	and	the	impact	of	funding,	utilizing	a	consistent	framework across	the	Firm.	For	more	information	on	such	adjustments	see	Credit	and funding	adjustments	on	page	200	of	this	Note.

# Valuation	model	review	and	approval

If	prices	or	quotes	are	not	available	for	an	instrument	or	a	similar	instrument,	fair value	is	generally	determined	using	valuation	models	that	consider	relevant transaction	data	such	as	maturity	and	use	as	inputs	market-based	or independently	sourced	parameters.	Where	this	is	the	case	the	price	verification process	described	above	is	applied	to	the	inputs	to	those	models.

The	Model	Risk	function	is	independent	of	the	model	owners.	It	reviews	and approves	a	wide	range	of	models,	including	risk	management,	valuation	and regulatory	capital	models	used	by	the	Firm.	The	Model	Risk	review	and governance	functions	are	part	of	the	Firm's	Model	Risk	unit,	and	the	Firmwide Model	Risk	Executive	reports	to	the	Firm's	Chief	Risk	Officer	("CRO").	When reviewing	a	model,	the	Model	Risk	function	analyzes	and	challenges	the	model methodology,	and	the	reasonableness	of	model	assumptions	and	may	perform	or require	additional	testing,	including	back-testing	of	model	outcomes.

New	valuation	models,	as	well	as	material	changes	to	existing	valuation	models, are	reviewed	and	approved	prior	to	implementation	except	where	specified conditions	are	met,	including	the	approval	of	an	exception	granted	by	the	head	of the	Model	Risk	function.	The	Model	Risk	function	performs	an	annual	status assessment	that	considers	developments	in	the	product	or	market	to	determine whether	valuation	models	which	have	already	been	reviewed	need	to	be,	on	a full	or	partial	basis,	reviewed	and	approved	again.

# Valuation	hierarchy

A	three-level	valuation	hierarchy	has	been	established	under	U.S.	GAAP	for disclosure	of	fair	value	measurements.	The	valuation	hierarchy	is	based	on	the transparency	of	inputs	to	the	valuation	of	an	asset	or	liability	as	of	the measurement	date.	The	three	levels	are	defined	as	follows.

•Level	1	–	inputs	to	the	valuation	methodology	are	quoted	prices	(unadjusted) for	identical	assets	or	liabilities	in	active	markets.

•Level	2	–	inputs	to	the	valuation	methodology	include	quoted	prices	for similar	assets	and	liabilities	in	active	markets,	and	inputs	that	are	observable for	the	asset	or	liability,	either	directly	or	indirectly,	for	substantially	the	full term	of	the	financial	instrument.

•Level	3	–	one	or	more	inputs	to	the	valuation	methodology	are	unobservable and	significant	to	the	fair	value	measurement.

A	financial	instrument's	categorization	within	the	valuation	hierarchy	is	based	on the	lowest	level	of	input	that	is	significant	to	the	fair	value	measurement.

The	following	table	describes	the	valuation	methodologies	generally	used	by	the	Firm	to	measure	its	significant	products/instruments	at	fair	value,	including	the	general classification	of	such	instruments	pursuant	to	the	valuation	hierarchy.

transaction	basis	and	calibrated	to	liquid	benchmark	tranche	indices)

parameters

Certain	long-dated	equity	option	specific	inputs	include:

Certain	interest	rate	and	foreign	exchange	("FX")	exotic	options	specific	inputs	include:

Certain	commodity	derivatives	specific	inputs	include:

(a) Excludes	certain	investments	that	are	measured	at	fair	value	using	the	net	asset	value	per	share	(or	its	equivalent)	as	a	practical expedient.

The	following	table	presents	the	asset	and	liabilities	reported	at	fair	value	as	of	December	31,	2015	and	2014,	by	major	product	category	and	fair	value	hierarchy.

# Assets	and	liabilities	measured	at	fair	value	on	a	recurring	basis

| December	31,	2015	(in	millions) | Level	1 | Level	2 |  | Level	3 |  | Derivative	netting<br>adjustments | Total	fair	value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements | $— | $23,141 |  | $— |  | $— | $23,141 |
| Securities\tborrowed | — | 395 |  | — |  | — | 395 |
| Trading\tassets: |  |  |  |  |  |  |  |
| Debt\tinstruments: |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies(a) | 6 | 31,815 |  | 715 |  | — | 32,536 |
| Residential\t–\tnonagency | — | 1,299 |  | 194 |  | — | 1,493 |
| Commercial\t–\tnonagency | — | 1,080 |  | 115 |  | — | 1,195 |
| Total\tmortgage-backed\tsecurities | 6 | 34,194 |  | 1,024 |  | — | 35,224 |
| U.S.\tTreasury\tand\tgovernment\tagencies(a) | 12,036 | 6,985 |  | — |  | — | 19,021 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | — | 6,986 |  | 651 |  | — | 7,637 |
| Certificates\tof\tdeposit,\tbankers'\tacceptances\tand\tcommercial\tpaper | — | 1,042 |  | — |  | — | 1,042 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 27,974 | 25,064 |  | 74 |  | — | 53,112 |
| Corporate\tdebt\tsecurities | — | 22,807 |  | 736 |  | — | 23,543 |
| Loans(b) | — | 22,211 |  | 6,604 |  | — | 28,815 |
| Asset-backed\tsecurities | — | 2,392 |  | 1,832 |  | — | 4,224 |
| Total\tdebt\tinstruments | 40,016 | 121,681 |  | 10,921 |  | — | 172,618 |
| Equity\tsecurities | 94,059 | 606 |  | 265 |  | — | 94,930 |
| Physical\tcommodities(c) | 3,593 | 1,064 |  | — |  | — | 4,657 |
| Other | — | 11,152 |  | 744 |  | — | 11,896 |
| Total\tdebt\tand\tequity\tinstruments(d) | 137,668 | 134,503 |  | 11,930 |  | — | 284,101 |
| Derivative\treceivables: |  |  |  |  |  |  |  |
| Interest\trate | 354 | 666,491 |  | 2,766 |  | (643,248) | 26,363 |
| Credit | — | 48,850 |  | 2,618 |  | (50,045) | 1,423 |
| Foreign\texchange | 734 | 177,525 |  | 1,616 |  | (162,698) | 17,177 |
| Equity | — | 35,150 |  | 709 |  | (30,330) | 5,529 |
| Commodity | 108 | 24,720 |  | 237 |  | (15,880) | 9,185 |
| Total\tderivative\treceivables(e) | 1,196 | 952,736 |  | 7,946 |  | (902,201) | 59,677 |
| Total\ttrading\tassets | 138,864 | 1,087,239 |  | 19,876 |  | (902,201) | 343,778 |
| Available-for-sale\tsecurities: |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies(a) | — | 55,066 |  | — |  | — | 55,066 |
| Residential\t–\tnonagency | — | 27,618 |  | 1 |  | — | 27,619 |
| Commercial\t–\tnonagency | — | 22,897 |  | — |  | — | 22,897 |
| Total\tmortgage-backed\tsecurities | — | 105,581 |  | 1 |  | — | 105,582 |
| U.S.\tTreasury\tand\tgovernment\tagencies(a) | 10,998 | 38 |  | — |  | — | 11,036 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | — | 33,550 |  | — |  | — | 33,550 |
| Certificates\tof\tdeposit | — | 283 |  | — |  | — | 283 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 23,199 | 13,477 |  | — |  | — | 36,676 |
| Corporate\tdebt\tsecurities | — | 12,436 |  | — |  | — | 12,436 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | — | 30,248 |  | 759 |  | — | 31,007 |
| Other | — | 9,033 |  | 64 |  | — | 9,097 |
| Equity\tsecurities | 2,087 | — |  | — |  | — | 2,087 |
| Total\tavailable-for-sale\tsecurities | 36,284 | 204,646 |  | 824 |  | — | 241,754 |
| Loans | — | 1,343 |  | 1,518 |  | — | 2,861 |
| Mortgage\tservicing\trights | — | — |  | 6,608 |  | — | 6,608 |
| Other\tassets: |  |  |  |  |  |  |  |
| Private\tequity\tinvestments(f) | 102 | 101 |  | 1,657 |  | — | 1,860 |
| All\tother | 3,815 | 28 |  | 744 |  | — | 4,587 |
| Total\tother\tassets | 3,917 | 129 |  | 2,401 |  | — | 6,447 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\trecurring\tbasis | $179,065 | $1,316,893 | (g) | $31,227 | (g) | $(902,201) | $624,984 |
| Deposits | $— | $9,566 |  | $2,950 |  | $— | $12,516 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements | — | 3,526 |  | — |  | — | 3,526 |
| Other\tborrowed\tfunds | — | 9,272 |  | 639 |  | — | 9,911 |
| Trading\tliabilities: |  |  |  |  |  |  |  |
| Debt\tand\tequity\tinstruments(d) | 53,845 | 20,199 |  | 63 |  | — | 74,107 |
| Derivative\tpayables: |  |  |  |  |  |  |  |
| Interest\trate | 216 | 633,060 |  | 1,890 |  | (624,945) | 10,221 |
| Credit | — | 48,460 |  | 2,069 |  | (48,988) | 1,541 |
| Foreign\texchange | 669 | 187,890 |  | 2,341 |  | (171,131) | 19,769 |

| Equity | — | 36,440 | 2,223 | (29,480) | 9,183 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Commodity | 52 | 26,430 | 1,172 | (15,578) | 12,076 |
| Total\tderivative\tpayables(e) | 937 | 932,280 | 9,695 | (890,122) | 52,790 |
| Total\ttrading\tliabilities | 54,782 | 952,479 | 9,758 | (890,122) | 126,897 |
| Accounts\tpayable\tand\tother\tliabilities | 4,382 | — | 19 | — | 4,401 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs | — | 238 | 549 | — | 787 |
| Long-term\tdebt | — | 21,452 | 11,613 | — | 33,065 |
| Total\tliabilities\tmeasured\tat\tfair\tvalue\ton\ta\trecurring\tbasis | $59,164 | $996,533 | $25,528 | $(890,122) | $191,103 |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  | 189 |

| December	31,	2014	(in	millions) | Level	1 | Level	2 |  | Level	3 | Derivative	netting<br>adjustments |  | Total	fair	value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements | $— | $28,585 |  | $— | $— |  | $28,585 |
| Securities\tborrowed | — | 992 |  | — | — |  | 992 |
| Trading\tassets: |  |  |  |  |  |  |  |
| Debt\tinstruments: |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies(a) | 14 | 31,904 |  | 922 | — |  | 32,840 |
| Residential\t–\tnonagency | — | 1,381 |  | 663 | — |  | 2,044 |
| Commercial\t–\tnonagency | — | 927 |  | 306 | — |  | 1,233 |
| Total\tmortgage-backed\tsecurities | 14 | 34,212 |  | 1,891 | — |  | 36,117 |
| U.S.\tTreasury\tand\tgovernment\tagencies(a) | 17,816 | 8,460 |  | — | — |  | 26,276 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | — | 9,298 |  | 1,273 | — |  | 10,571 |
| Certificates\tof\tdeposit,\tbankers'\tacceptances\tand\tcommercial\tpaper | — | 1,429 |  | — | — |  | 1,429 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 25,854 | 27,294 |  | 302 | — |  | 53,450 |
| Corporate\tdebt\tsecurities | — | 28,099 |  | 2,989 | — |  | 31,088 |
| Loans(b) | — | 23,080 |  | 13,287 | — |  | 36,367 |
| Asset-backed\tsecurities | — | 3,088 |  | 1,264 | — |  | 4,352 |
| Total\tdebt\tinstruments | 43,684 | 134,960 |  | 21,006 | — |  | 199,650 |
| Equity\tsecurities | 104,890 | 624 |  | 431 | — |  | 105,945 |
| Physical\tcommodities(c) | 2,739 | 1,741 |  | 2 | — |  | 4,482 |
| Other | — | 8,762 |  | 1,050 | — |  | 9,812 |
| Total\tdebt\tand\tequity\tinstruments(d) | 151,313 | 146,087 |  | 22,489 | — |  | 319,889 |
| Derivative\treceivables: |  |  |  |  |  |  |  |
| Interest\trate | 473 | 945,635 | (g) | 4,149 | (916,532) | (g) | 33,725 |
| Credit | — | 73,853 |  | 2,989 | (75,004) |  | 1,838 |
| Foreign\texchange | 758 | 212,153 | (g) | 2,276 | (193,934) | (g) | 21,253 |
| Equity | — | 39,937 | (g) | 2,552 | (34,312) | (g) | 8,177 |
| Commodity | 247 | 42,807 |  | 599 | (29,671) |  | 13,982 |
| Total\tderivative\treceivables(e) | 1,478 | 1,314,385 | (g) | 12,565 | (1,249,453) | (g) | 78,975 |
| Total\ttrading\tassets | 152,791 | 1,460,472 | (g) | 35,054 | (1,249,453) | (g) | 398,864 |
| Available-for-sale\tsecurities: |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies(a) | — | 65,319 |  | — | — |  | 65,319 |
| Residential\t–\tnonagency | — | 50,865 |  | 30 | — |  | 50,895 |
| Commercial\t–\tnonagency | — | 21,009 |  | 99 | — |  | 21,108 |
| Total\tmortgage-backed\tsecurities | — | 137,193 |  | 129 | — |  | 137,322 |
| U.S.\tTreasury\tand\tgovernment\tagencies(a) | 13,591 | 54 |  | — | — |  | 13,645 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | — | 30,068 |  | — | — |  | 30,068 |
| Certificates\tof\tdeposit | — | 1,103 |  | — | — |  | 1,103 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 24,074 | 28,669 |  | — | — |  | 52,743 |
| Corporate\tdebt\tsecurities | — | 18,532 |  | — | — |  | 18,532 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | — | 29,402 |  | 792 | — |  | 30,194 |
| Other | — | 12,499 |  | 116 | — |  | 12,615 |
| Equity\tsecurities | 2,530 | — |  | — | — |  | 2,530 |
| Total\tavailable-for-sale\tsecurities | 40,195 | 257,520 |  | 1,037 | — |  | 298,752 |
| Loans | — | 70 |  | 2,541 | — |  | 2,611 |
| Mortgage\tservicing\trights | — | — |  | 7,436 | — |  | 7,436 |
| Other\tassets: |  |  |  |  |  |  |  |
| Private\tequity\tinvestments(f) | 648 | 2,624 |  | 2,225 | — |  | 5,497 |
| All\tother | 4,018 | 17 |  | 959 | — |  | 4,994 |
| Total\tother\tassets | 4,666 | 2,641 |  | 3,184 | — |  | 10,491 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\trecurring\tbasis | $197,652 | $1,750,280 | (g) | $49,252 | $(1,249,453) | (g) | $747,731 |
| Deposits | $— | $5,948 |  | $2,859 | $— |  | $8,807 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements | — | 2,979 |  | — | — |  | 2,979 |
| Other\tborrowed\tfunds | — | 13,286 |  | 1,453 | — |  | 14,739 |
| Trading\tliabilities: |  |  |  |  |  |  |  |
| Debt\tand\tequity\tinstruments(d) | 62,914 | 18,713 |  | 72 | — |  | 81,699 |
| Derivative\tpayables: |  |  |  |  |  |  |  |
| Interest\trate | 499 | 914,357 | (g) | 3,523 | (900,634) | (g) | 17,745 |
| Credit | — | 73,095 |  | 2,800 | (74,302) |  | 1,593 |
| Foreign\texchange | 746 | 221,066 | (g) | 2,802 | (201,644) | (g) | 22,970 |
| Equity | — | 41,925 | (g) | 4,337 | (34,522) | (g) | 11,740 |
| Commodity | 141 | 44,318 |  | 1,164 | (28,555) |  | 17,068 |

| Total	derivative	payables(e) | 1,386 | 1,294,761 | (g) | 14,626 | (1,239,657) | (g) | 71,116 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Total\ttrading\tliabilities | 64,300 | 1,313,474 | (g) | 14,698 | (1,239,657) | (g) | 152,815 |
| Accounts\tpayable\tand\tother\tliabilities\t(g) | 4,129 | — |  | 26 | — |  | 4,155 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs | — | 1,016 |  | 1,146 | — |  | 2,162 |
| Long-term\tdebt | — | 18,349 |  | 11,877 | — |  | 30,226 |
| Total\tliabilities\tmeasured\tat\tfair\tvalue\ton\ta\trecurring\tbasis | $68,429 | $1,355,052 | (g) | $32,059 | $(1,239,657) | (g) | $215,883 |

Note:	Effective	April	1,	2015,	the	Firm	adopted	new	accounting	guidance	for	investments	in	certain	entities	that	calculate	net	asset	value	per	share	(or	its	equivalent).	As	a	result	of	the	adoption	of	this	new	guidance,	certain	investments	that	are measured	at	fair	value	using	the	net	asset	value	per	share	(or	its	equivalent)	as	a	practical	expedient	are	not	required	to	be	classified	in	the	fair	value	hierarchy.	At	December	31,	2015	and	2014,	the	fair	values	of	these	investments,	which	include certain	hedge	funds,	private	equity	funds,	real	estate	and	other	funds,	were	$1.2	billion	and	$1.5	billion,	respectively,	of	which	$337	million	and	$1.2	billion	had	been	previously	classified	in	level	2	and	level	3,	respectively,	at	December	31, 2014.	Included	on	the	Firm's	balance	sheet	at	December	31,	2015	and	2014,	were	trading	assets	of	$61	million	and	$124	million,	respectively,	and	other	assets	of	$1.2	billion	and	$1.4	billion,	respectively.	The	guidance	was	required	to	be	applied retrospectively,	and	accordingly,	prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.

(a) At	December	31,	2015	and	2014,	included	total	U.S.	government-sponsored	enterprise	obligations	of	$67.0	billion	and	$84.1	billion,	respectively,	which	were	predominantly	mortgage-

related.

(b) At	December	31,	2015	and	2014,	included	within	trading	loans	were	$11.8	billion	and	$17.0	billion,	respectively,	of	residential	first-lien	mortgages,	and	$4.3	billion	and	$5.8	billion,	respectively,	of	commercial	first-lien	mortgages.

Residential	mortgage	loans	include	conforming	mortgage	loans	originated	with	the	intent	to	sell	to	U.S.	government	agencies	of	$5.3	billion	and	$7.7	billion,	respectively,	and	reverse	mortgages	of	$2.5	billion	and	$3.4	billion,	respectively.

(c) Physical	commodities	inventories	are	generally	accounted	for	at	the	lower	of	cost	or	market.	"Market"	is	a	term	defined	in	U.S.	GAAP	as	not	exceeding	fair	value	less	costs	to	sell	("transaction	costs").	Transaction	costs	for	the	Firm's physical	commodities	inventories	are	either	not	applicable	or	immaterial	to	the	value	of	the	inventory.	Therefore,	market	approximates	fair	value	for	the	Firm's	physical	commodities	inventories.	When	fair	value	hedging	has	been	applied (or	when	market	is	below	cost),	the	carrying	value	of	physical	commodities	approximates	fair	value,	because	under	fair	value	hedge	accounting,	the	cost	basis	is	adjusted	for	changes	in	fair	value.	For	a	further	discussion	of	the	Firm's	hedge accounting	relationships,	see	Note	6.	To	provide	consistent	fair	value	disclosure	information,	all	physical	commodities	inventories	have	been	included	in	each	period	presented.

(d) Balances	reflect	the	reduction	of	securities	owned	(long	positions)	by	the	amount	of	identical	securities	sold	but	not	yet	purchased	(short positions).

(e) As	permitted	under	U.S.	GAAP,	the	Firm	has	elected	to	net	derivative	receivables	and	derivative	payables	and	the	related	cash	collateral	received	and	paid	when	a	legally	enforceable	master	netting	agreement	exists.	For	purposes	of	the tables	above,	the	Firm	does	not	reduce	derivative	receivables	and	derivative	payables	balances	for	this	netting	adjustment,	either	within	or	across	the	levels	of	the	fair	value	hierarchy,	as	such	netting	is	not	relevant	to	a	presentation	based	on the	transparency	of	inputs	to	the	valuation	of	an	asset	or	liability.	However,	if	the	Firm	were	to	net	such	balances	within	level	3,	the	reduction	in	the	level	3	derivative	receivables	and	payables	balances	would	be	$546	million	and	$2.5	billion at	December	31,	2015	and	2014,	respectively;	this	is	exclusive	of	the	netting	benefit	associated	with	cash	collateral,	which	would	further	reduce	the	level	3	balances.

(f) Private	equity	instruments	represent	investments	within	the	Corporate	line	of	business.	The	cost	basis	of	the	private	equity	investment	portfolio	totaled	$3.5	billion	and	$6.0	billion	at	December	31,	2015	and	2014, respectively.

(g) Certain	prior	period	amounts	(including	the	corresponding	fair	value	parenthetical	disclosure	for	accounts	payable	and	other	liabilities	on	the	Consolidated	balance	sheets)	were	revised	to	conform	with	the	current	period presentation.

# Transfers	between	levels	for	instruments	carried	at	fair	value	on	a recurring	basis

For	the	years	ended	December	31,	2015	and	2014,	there	were	no	significant transfers	between	levels	1	and	2.

During	the	year	ended	December	31,	2015,	transfers	from	level	3	to	level	2	and from	level	2	to	level	3	included	the	following:

•$3.1	billion	of	long-term	debt	and	$1.0	billion	of	deposits	driven	by	an increase	in	observability	on	certain	structured	notes	with	embedded	interest rate	and	FX	derivatives	and	a	reduction	of	the	significance	in	the unobservable	inputs	for	certain	structured	notes	with	embedded	equity derivatives

•$2.1	billion	of	gross	equity	derivatives	for	both	receivables	and	payables	as	a result	of	an	increase	in	observability	and	a	decrease	in	the	significance	in unobservable	inputs;	partially	offset	by	transfers	into	level	3	resulting	in	net transfers	of	approximately	$1.2	billion	for	both	receivables	and	payables

•$2.8	billion	of	trading	loans	driven	by	an	increase	in	observability	of	certain collateralized	financing	transactions;	and	$2.4	billion	of	corporate	debt	driven by	a	decrease	in	the	significance	in	the	unobservable	inputs	and	an	increase	in observability	for	certain	structured	products

During	the	year	ended	December	31,	2014,	transfers	from	level	3	to	level	2 included	the	following:

•$4.3	billion	and	$4.4	billion	of	gross	equity	derivative	receivables	and payables,	respectively,	due	to	increased	observability	of	certain	equity	option valuation	inputs

•$2.7	billion	of	trading	loans,	$2.6	billion	of	margin	loans,	$2.3	billion	of private	equity	investments,	$2.0	billion	of	corporate	debt,	and	$1.3	billion	of long-term	debt,	based	on	increased	liquidity	and	price	transparency

Transfers	from	level	2	into	level	3	included	$1.1	billion	of	other	borrowed	funds, $1.1	billion	of	trading	loans	and	$1.0	billion	of	long-term	debt,	based	on	a decrease	in	observability	of	valuation	inputs	and	price	transparency.

•Certain	highly	rated	CLOs,	including	$27.4	billion	held	in	the	Firm's available-for-sale	("AFS")	securities	portfolio	and	$1.4	billion	held	in	the trading	portfolio,	based	on	increased	liquidity	and	price	transparency;

•$1.3	billion	of	long-term	debt,	largely	driven	by	an	increase	in	observability of	certain	equity	structured	notes.

Transfers	from	level	2	to	level	3	included	$1.4	billion	of	corporate	debt securities	in	the	trading	portfolio	largely	driven	by	a	decrease	in	observability	for certain	credit	instruments.

All	transfers	are	assumed	to	occur	at	the	beginning	of	the	quarterly	reporting period	in	which	they	occur.

# Level	3	valuations

The	Firm	has	established	well-documented	processes	for	determining	fair	value, including	for	instruments	where	fair	value	is	estimated	using	significant unobservable	inputs	(level	3).	For	further	information	on	the	Firm's	valuation process	and	a	detailed	discussion	of	the	determination	of	fair	value	for	individual financial	instruments,	see	pages	185–188	of	this	Note.

Estimating	fair	value	requires	the	application	of	judgment.	The	type	and	level	of judgment	required	is	largely	dependent	on	the	amount	of	observable	market information	available	to	the	Firm.	For	instruments	valued	using	internally developed	models	that	use	significant	unobservable	inputs	and	are	therefore classified	within	level	3	of	the	fair	value	hierarchy,	judgments	used	to	estimate fair	value	are	more	significant	than	those	required	when	estimating	the	fair	value of	instruments	classified	within	levels	1	and	2.

In	arriving	at	an	estimate	of	fair	value	for	an	instrument	within	level	3, management	must	first	determine	the	appropriate	model	to	use.	Second,	due	to the	lack	of	observability	of	significant	inputs,	management	must	assess	all relevant	empirical	data	in	deriving	valuation	inputs	including,	but	not	limited	to, transaction	details,	yield

curves,	interest	rates,	prepayment	speed,	default	rates,	volatilities,	correlations, equity	or	debt	prices,	valuations	of	comparable	instruments,	foreign	exchange rates	and	credit	curves.

The	following	table	presents	the	Firm's	primary	level	3	financial	instruments, the	valuation	techniques	used	to	measure	the	fair	value	of	those	financial instruments,	the	significant	unobservable	inputs,	the	range	of	values	for	those inputs	and,	for	certain	instruments,	the	weighted	averages	of	such	inputs.	While the	determination	to	classify	an	instrument	within	level	3	is	based	on	the significance	of	the	unobservable	inputs	to	the	overall	fair	value	measurement, level	3	financial	instruments	typically	include	observable	components	(that	is, components	that	are	actively	quoted	and	can	be	validated	to	external	sources)	in addition	to	the	unobservable	components.	The	level	1	and/or	level	2	inputs	are not	included	in	the	table.	In	addition,	the	Firm	manages	the	risk	of	the	observable components	of	level	3	financial	instruments	using	securities	and	derivative positions	that	are	classified	within	levels	1	or	2	of	the	fair	value	hierarchy.

The	range	of	values	presented	in	the	table	is	representative	of	the	highest	and lowest	level	input	used	to	value	the	significant	groups	of	instruments	within	a product/instrument	classification.	Where	provided,	the	weighted	averages	of	the input	values	presented	in	the	table	are	calculated	based	on	the	fair	value	of	the instruments	that	the	input	is	being	used	to	value.

In	the	Firm's	view,	the	input	range	and	the	weighted	average	value	do	not	reflect the	degree	of	input	uncertainty	or	an	assessment	of	the	reasonableness	of	the Firm's	estimates	and	assumptions.	Rather,	they	reflect	the	characteristics	of	the various	instruments	held	by	the	Firm	and	the	relative	distribution	of	instruments within	the	range	of	characteristics.	For	example,	two	option	contracts	may	have similar	levels	of	market	risk	exposure	and	valuation	uncertainty,	but	may	have significantly	different	implied	volatility	levels	because	the	option	contracts	have different	underlyings,	tenors,	or	strike	prices.	The	input	range	and	weighted average	values	will	therefore	vary	from	period-to-period	and	parameter-to- parameter	based	on	the	characteristics	of	the	instruments	held	by	the	Firm	at each	balance	sheet	date.

For	the	Firm's	derivatives	and	structured	notes	positions	classified	within	level	3 at	December	31,	2015,	interest	rate	correlation	inputs	used	in	estimating	fair value	were	concentrated	towards	the	upper	end	of	the	range	presented;	equities correlation	inputs	were	concentrated	at	the	lower	end	of	the	range;	the	credit correlation	inputs	were	distributed	across	the	range	presented;	and	the	foreign exchange	correlation	inputs	were	concentrated	at	the	top	end	of	the	range presented.	In	addition,	the	interest	rate	volatility	inputs	and	the	foreign	exchange correlation	inputs	used	in	estimating	fair	value	were	each	concentrated	at	the upper	end	of	the	range	presented.	The	equity	volatilities	are	concentrated	in	the lower	half	end	of	the	range.	The	forward	commodity	prices	used	in	estimating	the fair	value	of	commodity	derivatives	were	concentrated	within	the	lower	end	of the	range	presented.

# Level	3	inputs(a)

December	31,	2015	(in	millions,	except	for	ratios	and	basis	points)

| Product/Instrument | Fair	value | Principal	valuation	technique | Unobservable	inputs | Range	of	input	values | Range	of	input	values | Range	of	input	values | Weighted<br>average |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Residential\tmortgage-backed\tsecurities\tand | $5,212 | \t Discounted\tcash\tflows | Yield | 3% | - | 26% | 6% |
| loans |  |  | Prepayment\tspeed | 0% | - | 20% | 6% |
|  |  |  | Conditional\tdefault\trate | 0% | - | 33% | 2% |
|  |  |  | Loss\tseverity | 0% | - | 100% | 28% |
| Commercial\tmortgage-backed\tsecurities\tand | 2,844 | \t Discounted\tcash\tflows | Yield | 1% | - | 25% | 6% |
| loans(b) |  |  | Conditional\tdefault\trate | 0% | - | 91% | 29% |
|  |  |  | Loss\tseverity |  | 40% |  | 40% |
| Corporate\tdebt\tsecurities,\tobligations\tof\tU.S. | 3,277 | \t Discounted\tcash\tflows | Credit\tspread | 60\tbps | - | 225\tbps | 146\tbps |
| states\tand\tmunicipalities,\tand\tother(c) |  |  | Yield | 1% | - | 20% | 5% |
|  | 2,740 | \t Market\tcomparables | Price | $— | - | $168 | $89 |
| Net\tinterest\trate\tderivatives | 876 | \t Option\tpricing | Interest\trate\tcorrelation | (52)% | - | 99% |  |
|  |  |  | Interest\trate\tspread\tvolatility | 3% | - | 38% |  |
| Net\tcredit\tderivatives(b)(c) | 549 | \t Discounted\tcash\tflows | Credit\tcorrelation | 35% | - | 90% |  |
| Net\tforeign\texchange\tderivatives | (725) | \t Option\tpricing | Foreign\texchange\tcorrelation | 0% | - | 60% |  |
| Net\tequity\tderivatives | (1,514) | \t Option\tpricing | Equity\tvolatility | 20% | - | 65% |  |
| Net\tcommodity\tderivatives | (935) | \t Discounted\tcash\tflows | Forward\tcommodity\tprice | $22 | - | $46\tper\tbarrel |  |
| Collateralized\tloan\tobligations | 759 | \t Discounted\tcash\tflows | Credit\tspread | 354\tbps | - | 550\tbps | 396\tbps |
|  |  |  | Prepayment\tspeed |  | 20% |  | 20% |
|  |  |  | Conditional\tdefault\trate |  | 2% |  | 2% |
|  |  |  | Loss\tseverity |  | 40% |  | 40% |
|  | 180 | \t Market\tcomparables | Price | $— | - | $99 | $69 |
| Mortgage\tservicing\trights | 6,608 | \t Discounted\tcash\tflows | Refer\tto\tNote\t17 |  |  |  |  |
| Private\tequity\tinvestments | 1,657 | \t Market\tcomparables | EBITDA\tmultiple | 7.2x | - | 10.4x | 8.5x |
|  |  |  | Liquidity\tadjustment | 0% | - | 13% | 8% |
| Long-term\tdebt,\tother\tborrowed\tfunds,\tand | 14,707 | \t Option\tpricing | Interest\trate\tcorrelation | (52)% | - | 99% |  |
| deposits(d) |  |  | Interest\trate\tspread\tvolatility | 3% | - | 38% |  |
|  |  |  | Foreign\texchange\tcorrelation | 0% | - | 60% |  |
|  |  |  | Equity\tcorrelation | (50)% | - | 80% |  |
|  | 495 | \t Discounted\tcash\tflows | Credit\tcorrelation | 35% | - | 90% |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\nVIEs(e) | 549 | Discounted\tcash\tflows | Yield | 4% | - | 28% | 4% |
|  |  |  | Prepayment\tSpeed | 1% | - | 12% | 6% |
|  |  |  | Conditional\tdefault\trate | 2% | - | 15% | 2% |
|  |  |  | Loss\tseverity | 30% | - | 100% | 31% |

(a) The	categories	presented	in	the	table	have	been	aggregated	based	upon	the	product	type,	which	may	differ	from	their	classification	on	the	Consolidated	balance	sheets.

(b) The	unobservable	inputs	and	associated	input	ranges	for	approximately	 $349	million	of	credit	derivative	receivables	and	$310	million	of	credit	derivative	payables	with	underlying	commercial mortgage	risk	have	been	included	in	the	inputs	and	ranges	provided	for	commercial	mortgage-backed	securities	and	loans.

(c) The	unobservable	inputs	and	associated	input	ranges	for	approximately	 $434	million	of	credit	derivative	receivables	and	$401	million	of	credit	derivative	payables	with	underlying	asset-backed securities	risk	have	been	included	in	the	inputs	and	ranges	provided	for	corporate	debt	securities,	obligations	of	U.S.	states	and	municipalities	and	other.

(d) Long-term	debt,	other	borrowed	funds	and	deposits	include	structured	notes	issued	by	the	Firm	that	are	predominantly	financial	instruments	containing	embedded	derivatives.	The	estimation	of	the fair	value	of	structured	notes	is	predominantly	based	on	the	derivative	features	embedded	within	the	instruments.	The	significant	unobservable	inputs	are	broadly	consistent	with	those	presented for	derivative	receivables.

(e)	The	parameters	are	related	to	residential	mortgage-backed	securities.

# Changes	in	and	ranges	of	unobservable	inputs

The	following	discussion	provides	a	description	of	the	impact	on	a	fair	value measurement	of	a	change	in	each	unobservable	input	in	isolation,	and	the interrelationship	between	unobservable	inputs,	where	relevant	and	significant. The	impact	of	changes	in	inputs	may	not	be	independent	as	a	change	in	one unobservable	input	may	give	rise	to	a	change	in	another	unobservable	input; where	relationships	exist	between	two	unobservable	inputs,	those	relationships are	discussed	below.	Relationships	may	also	exist	between	observable	and unobservable	inputs	(for	example,	as	observable	interest	rates	rise,	unobservable prepayment	rates	decline);	such	relationships	have	not	been	included	in	the discussion	below.	In	addition,	for	each	of	the	individual	relationships	described below,	the	inverse	relationship	would	also	generally	apply.

In	addition,	the	following	discussion	provides	a	description	of	attributes	of	the underlying	instruments	and	external	market	factors	that	affect	the	range	of	inputs used	in	the	valuation	of	the	Firm's	positions.

Yield	–	The	yield	of	an	asset	is	the	interest	rate	used	to	discount	future	cash	flows in	a	discounted	cash	flow	calculation.	An	increase	in	the	yield,	in	isolation, would	result	in	a	decrease	in	a	fair	value	measurement.

Credit	spread	–	The	credit	spread	is	the	amount	of	additional	annualized	return over	the	market	interest	rate	that	a	market	participant	would	demand	for	taking exposure	to	the	credit	risk	of	an	instrument.	The	credit	spread	for	an	instrument forms	part	of	the	discount	rate	used	in	a	discounted	cash	flow	calculation. Generally,	an	increase	in	the	credit	spread	would	result	in	a	decrease	in	a	fair value	measurement.

The	yield	and	the	credit	spread	of	a	particular	mortgage-backed	security primarily	reflect	the	risk	inherent	in	the	instrument.	The	yield	is	also	impacted	by the	absolute	level	of	the	coupon	paid	by	the	instrument	(which	may	not correspond	directly	to	the	level	of	inherent	risk).	Therefore,	the	range	of	yield and	credit	spreads	reflects	the	range	of	risk	inherent	in	various	instruments owned	by	the	Firm.	The	risk	inherent	in	mortgage-backed	securities	is	driven	by the	subordination	of	the	security	being	valued	and	the	characteristics	of	the underlying	mortgages	within	the	collateralized	pool,	including	borrower	FICO scores,	loan-to-value	ratios	for	residential	mortgages	and	the	nature	of	the property	and/or	any	tenants	for	commercial	mortgages.	For	corporate	debt securities,	obligations	of	U.S.	states	and	municipalities	and	other	similar instruments,	credit	spreads	reflect	the	credit	quality	of	the	obligor	and	the	tenor of	the	obligation.

Prepayment	speed	–	The	prepayment	speed	is	a	measure	of	the	voluntary unscheduled	principal	repayments	of	a	prepayable	obligation	in	a	collateralized pool.	Prepayment	speeds	generally	decline	as	borrower	delinquencies	rise.	An increase	in	prepayment	speeds,	in	isolation,	would	result	in	a	decrease	in	a	fair value	measurement	of	assets	valued	at	a	premium	to	par	and	an	increase	in	a	fair value	measurement	of	assets	valued	at	a	discount	to	par.

Prepayment	speeds	may	vary	from	collateral	pool	to	collateral	pool,	and	are driven	by	the	type	and	location	of	the	underlying	borrower,	the	remaining	tenor of	the	obligation	as	well	as	the	level	and	type	(e.g.,	fixed	or	floating)	of	interest rate	being	paid	by	the	borrower.	Typically	collateral	pools	with	higher	borrower credit	quality	have	a	higher	prepayment	rate	than	those	with	lower	borrower credit	quality,	all	other	factors	being	equal.

Conditional	default	rate	–	The	conditional	default	rate	is	a	measure	of	the reduction	in	the	outstanding	collateral	balance	underlying	a	collateralized obligation	as	a	result	of	defaults.	While	there	is	typically	no	direct	relationship between	conditional	default	rates	and	prepayment	speeds,	collateralized obligations	for	which	the	underlying	collateral	has	high	prepayment	speeds	will tend	to	have	lower	conditional	default	rates.	An	increase	in	conditional	default rates	would	generally	be	accompanied	by	an	increase	in	loss	severity	and	an increase	in	credit	spreads.	An	increase	in	the	conditional	default	rate,	in	isolation, would	result	in	a	decrease	in	a	fair	value	measurement.	Conditional	default	rates reflect	the	quality	of	the	collateral	underlying	a	securitization	and	the	structure	of the	securitization	itself.	Based	on	the	types	of	securities	owned	in	the	Firm's market-making	portfolios,	conditional	default	rates	are	most	typically	at	the lower	end	of	the	range	presented.

Loss	severity	–	The	loss	severity	(the	inverse	concept	is	the	recovery	rate)	is	the expected	amount	of	future	realized	losses	resulting	from	the	ultimate	liquidation of	a	particular	loan,	expressed	as	the	net	amount	of	loss	relative	to	the outstanding	loan	balance.	An	increase	in	loss	severity	is	generally	accompanied by	an	increase	in	conditional	default	rates.	An	increase	in	the	loss	severity,	in isolation,	would	result	in	a	decrease	in	a	fair	value	measurement.

The	loss	severity	applied	in	valuing	a	mortgage-backed	security	investment depends	on	factors	relating	to	the	underlying	mortgages,	including	the	loan-to- value	ratio,	the	nature	of	the	lender's	lien	on	the	property	and	other	instrument- specific	factors.

Correlation	–	Correlation	is	a	measure	of	the	relationship	between	the movements	of	two	variables	(e.g.,	how	the	change	in	one	variable	influences	the change	in	the	other).	Correlation	is	a	pricing	input	for	a	derivative	product	where the	payoff	is	driven	by	one	or	more	underlying	risks.	Correlation	inputs	are related	to	the	type	of	derivative	(e.g.,	interest	rate,	credit,	equity	and	foreign exchange)	due	to	the	nature	of	the	underlying	risks.	When	parameters	are positively	correlated,	an	increase	in	one	parameter	will	result	in	an	increase	in	the other	parameter.	When	parameters	are	negatively	correlated,	an	increase	in	one parameter	will	result	in	a	decrease	in	the	other	parameter.	An	increase	in correlation	can	result	in	an	increase	or	a	decrease	in	a	fair	value	measurement. Given	a	short	correlation	position,	an	increase	in	correlation,	in	isolation,	would generally	result	in	a	decrease	in	a	fair	value	measurement.	The	range	of correlation	inputs	between	risks	within	the	same	asset	class	are	generally narrower	than	those	between	underlying	risks	across	asset	classes.	In	addition, the	ranges	of	credit	correlation	inputs	tend	to	be	narrower	than	those	affecting other	asset	classes.

The	level	of	correlation	used	in	the	valuation	of	derivatives	with	multiple underlying	risks	depends	on	a	number	of	factors	including	the	nature	of	those risks.	For	example,	the	correlation	between	two	credit	risk	exposures	would	be different	than	that	between	two	interest	rate	risk	exposures.	Similarly,	the	tenor of	the	transaction	may	also	impact	the	correlation	input	as	the	relationship between	the	underlying	risks	may	be	different	over	different	time	periods. Furthermore,	correlation	levels	are	very	much	dependent	on	market	conditions and	could	have	a	relatively	wide	range	of	levels	within	or	across	asset	classes over	time,	particularly	in	volatile	market	conditions.

Volatility	–	Volatility	is	a	measure	of	the	variability	in	possible	returns	for	an instrument,	parameter	or	market	index	given	how	much	the	particular	instrument, parameter	or	index	changes	in	value	over	time.	Volatility	is	a	pricing	input	for options,	including	equity	options,	commodity	options,	and	interest	rate	options. Generally,	the	higher	the	volatility	of	the	underlying,	the	riskier	the	instrument. Given	a	long	position	in	an	option,	an	increase	in	volatility,	in	isolation,	would generally	result	in	an	increase	in	a	fair	value	measurement.

The	level	of	volatility	used	in	the	valuation	of	a	particular	option-based derivative	depends	on	a	number	of	factors,	including	the	nature	of	the	risk underlying	the	option	(e.g.,	the	volatility	of	a	particular	equity	security	may	be significantly	different	from	that	of	a	particular	commodity	index),	the	tenor	of the	derivative	as	well	as	the	strike	price	of	the	option.

EBITDA	multiple	–	EBITDA	multiples	refer	to	the	input	(often	derived	from	the value	of	a	comparable	company)	that	is	multiplied	by	the	historic	and/or expected	earnings	before	interest,	taxes,	depreciation	and	amortization ("EBITDA")	of	a	company	in	order	to	estimate	the	company's	value.	An increase	in	the	EBITDA	multiple,	in	isolation,	net	of	adjustments,	would	result	in an	increase	in	a	fair	value	measurement.

# Changes	in	level	3	recurring	fair	value	measurements

The	following	tables	include	a	rollforward	of	the	Consolidated	balance	sheets amounts	(including	changes	in	fair	value)	for	financial	instruments	classified	by the	Firm	within	level	3	of	the	fair	value	hierarchy	for	the	years	ended December	31,	2015,	2014	and	2013.	When	a	determination	is	made	to	classify	a financial	instrument	within	level	3,	the	determination	is	based	on	the	significance of	the	unobservable	parameters	to	the	overall	fair	value	measurement.	However, level	3	financial	instruments	typically	include,	in	addition	to	the	unobservable	or level	3	components,	observable	components	(that	is,	components	that	are actively	quoted	and	can	be	validated	to	external	sources);	accordingly,	the	gains and	losses	in	the	table	below	include	changes	in	fair	value	due	in	part	to observable	factors	that	are	part	of	the	valuation	methodology.	Also,	the	Firm risk-manages	the	observable	components	of	level	3	financial	instruments	using securities	and	derivative	positions	that	are	classified	within	level	1	or	2	of	the	fair value	hierarchy;	as	these	level	1	and	level	2	risk	management	instruments	are not	included	below,	the	gains	or	losses	in	the	following	tables	do	not	reflect	the effect	of	the	Firm's	risk	management	activities	related	to	such	level	3 instruments.

# Fair	value	measurements	using	significant	unobservable	inputs

|  |  |  |  |  |  |  |  | Change	in	unrealized | Change	in	unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended |  | Total |  |  |  |  |  | gains/(losses)\trelated\tto | gains/(losses)\trelated\tto |
| December\t31,\t2015\n(in\tmillions) | Fair\tvalue\tat\nJanuary\t1,\t2015 | realized/unrealized\ngains/(losses) | Purchases(g) | Sales | Settlements(h) | Transfers\tinto\tand/or\nout\tof\tlevel\t3(i) | Fair\tvalue\tat\nDec.\t31,\t2015 | financial\tinstruments\theld\nat\tDec.\t31,\t2015 | financial\tinstruments\theld\nat\tDec.\t31,\t2015 |
| Assets: |  |  |  |  |  |  |  |  |  |
| Trading\tassets: |  |  |  |  |  |  |  |  |  |
| Debt\tinstruments: |  |  |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies | $922 | $(28) | $327 | $(303) | $(132) | $(71) | $715 | $(27) |  |
| Residential\t–\tnonagency | 663 | 130 | 253 | (611) | (23) | (218) | 194 | 4 |  |
| Commercial\t–\tnonagency | 306 | (14) | 246 | (262) | (22) | (139) | 115 | (5) |  |
| Total\tmortgage-backed\tsecurities | 1,891 | 88 | 826 | (1,176) | (177) | (428) | 1,024 | (28) |  |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 1,273 | 14 | 352 | (133) | (27) | (828) | 651 | (1) |  |
| Non-U.S.\tgovernment\tdebt\tsecurities | 302 | 9 | 205 | (123) | (64) | (255) | 74 | (16) |  |
| Corporate\tdebt\tsecurities | 2,989 | (77) | 1,171 | (1,038) | (125) | (2,184) | 736 | 2 |  |
| Loans | 13,287 | (174) | 3,532 | (4,661) | (3,112) | (2,268) | 6,604 | (181) |  |
| Asset-backed\tsecurities | 1,264 | (41) | 1,920 | (1,229) | (35) | (47) | 1,832 | (32) |  |
| Total\tdebt\tinstruments | 21,006 | (181) | 8,006 | (8,360) | (3,540) | (6,010) | 10,921 | (256) |  |
| Equity\tsecurities | 431 | 96 | 89 | (193) | (26) | (132) | 265 | 82 |  |
| Physical\tcommodities | 2 | (2) | — | — | — | — | — | — |  |
| Other | 1,050 | 119 | 1,581 | (1,313) | 192 | (885) | 744 | 85 |  |
| Total\ttrading\tassets\t–\tdebt\tand\tequity\tinstruments | 22,489 | (c)\n32 | 9,676 | (9,866) | (3,374) | (7,027) | 11,930 | (89) | (c) |
| Net\tderivative\treceivables:(a) |  |  |  |  |  |  |  |  |  |
| Interest\trate | 626 | 962 | 513 | (173) | (732) | (320) | 876 | 263 |  |
| Credit | 189 | 118 | 129 | (136) | 165 | 84 | 549 | 260 |  |
| Foreign\texchange | (526) | 657 | 19 | (149) | (296) | (430) | (725) | 49 |  |
| Equity | (1,785) | 731 | 890 | (1,262) | (158) | 70 | (1,514) | 5 |  |
| Commodity | (565) | (856) | 1 | (24) | 512 | (3) | (935) | (41) |  |
| Total\tnet\tderivative\treceivables | (2,061) | (c)\n1,612 | 1,552 | (1,744) | (509) | (599) | (1,749) | 536 | (c) |
| Available-for-sale\tsecurities: |  |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | 908 | (32) | 51 | (43) | (61) | — | 823 | (28) |  |
| Other | 129 | — | — | — | (29) | (99) | 1 | — |  |
| Total\tavailable-for-sale\tsecurities | 1,037 | (d)\n(32) | 51 | (43) | (90) | (99) | 824 | (28) | (d) |
| Loans | 2,541 | (c)\n(133) | 1,290 | (92) | (1,241) | (847) | 1,518 | (32) | (c) |
| Mortgage\tservicing\trights | 7,436 | (e)\n(405) | 985 | (486) | (922) | — | 6,608 | (405) | (e) |
| Other\tassets: |  |  |  |  |  |  |  |  |  |
| Private\tequity\tinvestments | 2,225 | (c)\n(120) | 281 | (362) | (187) | (180) | 1,657 | (304) | (c) |
| All\tother | 959 | (f)\n91 | 65 | (147) | (224) | — | 744 | 15 | (f) |

|  |  |  |  |  |  |  |  |  |  | Change	in	unrealized | Change	in	unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended |  | Total |  |  |  |  |  |  |  | (gains)/losses\trelated\tto | (gains)/losses\trelated\tto |
| December\t31,\t2015\n(in\tmillions) | Fair\tvalue\tat\nJanuary\t1,\t2015 | realized/unrealized\n(gains)/losses | realized/unrealized\n(gains)/losses | Purchases(g) | Sales | Issuances | Settlements(h) | Transfers\tinto\tand/or\nout\tof\tlevel\t3(i) | Fair\tvalue\tat\nDec.\t31,\t2015 | financial\tinstruments\theld\nat\tDec.\t31,\t2015 | financial\tinstruments\theld\nat\tDec.\t31,\t2015 |
| Liabilities:(b) |  |  |  |  |  |  |  |  |  |  |  |
| Deposits | $2,859 | $(39) | (c) | $— | $— | $1,993 | $(850) | $(1,013) | $2,950 | $(29) | (c) |
| Other\tborrowed\tfunds | 1,453 | (697) | (c) | — | — | 3,334 | (2,963) | (488) | 639 | (57) | (c) |
| Trading\tliabilities\t–\tdebt\tand\tequity\tinstruments | 72 | 15 | (c) | (163) | 160 | — | (17) | (4) | 63 | (4) | (c) |
| Accounts\tpayable\tand\tother\tliabilities | 26 | — |  | — | — | — | (7) | — | 19 | — |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs | 1,146 | (82) | (c) | — | — | 286 | (574) | (227) | 549 | (63) | (c) |
| Long-term\tdebt | 11,877 | (480) | (c) | (58) | — | 9,359 | (6,299) | (2,786) | 11,613 | 385 | (c) |

|  |  |  |  |  |  |  |  |  | Change	in	unrealized | Change	in	unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended |  | Total |  |  |  |  |  |  | gains/(losses)\trelated\tto | gains/(losses)\trelated\tto |
| December\t31,\t2014\n(in\tmillions) | Fair\tvalue\tat\nJanuary\t1,\t2014 | realized/unrealized\ngains/(losses) | realized/unrealized\ngains/(losses) | Purchases(g) | Sales | Settlements(h) | Transfers\tinto\tand/or\nout\tof\tlevel\t3(i) | Fair\tvalue\tat\nDec.\t31,\t2014 | financial\tinstruments\theld\nat\tDec.\t31,\t2014 | financial\tinstruments\theld\nat\tDec.\t31,\t2014 |
| Assets: |  |  |  |  |  |  |  |  |  |  |
| Trading\tassets: |  |  |  |  |  |  |  |  |  |  |
| Debt\tinstruments: |  |  |  |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies | $1,005 | $(97) |  | $351 | $(186) | $(121) | $(30) | $922 | $(92) |  |
| Residential\t–\tnonagency | 726 | 66 |  | 827 | (761) | (41) | (154) | 663 | (15) |  |
| Commercial\t–\tnonagency | 432 | 17 |  | 980 | (914) | (60) | (149) | 306 | (12) |  |
| Total\tmortgage-backed\tsecurities | 2,163 | (14) |  | 2,158 | (1,861) | (222) | (333) | 1,891 | (119) |  |
| Obligations\tof\tU.S.\tstates\tand\nmunicipalities | 1,382 | 90 |  | 298 | (358) | (139) | — | 1,273 | (27) |  |
| Non-U.S.\tgovernment\tdebt\tsecurities | 143 | 24 |  | 719 | (617) | (3) | 36 | 302 | 10 |  |
| Corporate\tdebt\tsecurities | 5,920 | 210 |  | 5,854 | (3,372) | (4,531) | (1,092) | 2,989 | 379 |  |
| Loans | 13,455 | 387 |  | 13,551 | (7,917) | (4,623) | (1,566) | 13,287 | 123 |  |
| Asset-backed\tsecurities | 1,272 | 19 |  | 2,240 | (2,126) | (283) | 142 | 1,264 | (30) |  |
| Total\tdebt\tinstruments | 24,335 | 716 |  | 24,820 | (16,251) | (9,801) | (2,813) | 21,006 | 336 |  |
| Equity\tsecurities | 867 | 113 |  | 248 | (259) | (286) | (252) | 431 | 46 |  |
| Physical\tcommodities | 4 | (1) |  | — | — | (1) | — | 2 | — |  |
| Other | 2,000 | 239 |  | 1,426 | (276) | (201) | (2,138) | 1,050 | 329 |  |
| Total\ttrading\tassets\t–\tdebt\tand\tequity\ninstruments | 27,206 | 1,067 | (c) | 26,494 | (16,786) | (10,289) | (5,203) | 22,489 | 711 | (c) |
| Net\tderivative\treceivables:(a) |  |  |  |  |  |  |  |  |  |  |
| Interest\trate | 2,379 | 184 |  | 198 | (256) | (1,771) | (108) | 626 | (853) |  |
| Credit | 95 | (149) |  | 272 | (47) | 92 | (74) | 189 | (107) |  |
| Foreign\texchange | (1,200) | (137) |  | 139 | (27) | 668 | 31 | (526) | (62) |  |
| Equity | (1,063) | 154 |  | 2,044 | (2,863) | 10 | (67) | (1,785) | 583 |  |
| Commodity | 115 | (465) |  | 1 | (113) | (109) | 6 | (565) | (186) |  |
| Total\tnet\tderivative\treceivables | 326 | (413) | (c) | 2,654 | (3,306) | (1,110) | (212) | (2,061) | (625) | (c) |
| Available-for-sale\tsecurities: |  |  |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | 1,088 | (41) |  | 275 | (2) | (101) | (311) | 908 | (40) |  |
| Other | 1,234 | (19) |  | 122 | — | (223) | (985) | 129 | (2) |  |
| Total\tavailable-for-sale\tsecurities | 2,322 | (60) | (d) | 397 | (2) | (324) | (1,296) | 1,037 | (42) | (d) |
| Loans | 1,931 | (254) | (c) | 3,258 | (845) | (1,549) | — | 2,541 | (234) | (c) |
| Mortgage\tservicing\trights | 9,614 | (1,826) | (e) | 768 | (209) | (911) | — | 7,436 | (1,826) | (e) |
| Other\tassets: |  |  |  |  |  |  |  |  |  |  |
| Private\tequity\tinvestments | 5,816 | 400 | (c) | 145 | (1,967) | (197) | (1,972) | 2,225 | 33 | (c) |
| All\tother | 1,382 | 83 | (f) | 10 | (357) | (159) | — | 959 | 59 | (f) |

|  |  |  |  |  |  |  |  |  | Change	in	unrealized | Change	in	unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended |  | Total |  |  |  |  | Transfers\tinto |  | gains/(losses)\trelated\tto | gains/(losses)\trelated\tto |
| December\t31,\t2013 | Fair\tvalue\tat | realized/unrealized | realized/unrealized |  |  |  | and/or\tout\tof\tlevel | Fair\tvalue\tat | financial\tinstruments | financial\tinstruments |
| (in\tmillions) | January\t1,\t2013 | gains/(losses) | gains/(losses) | Purchases(g) | Sales | Settlements(h) | 3(i) | Dec.\t31,\t2013 | held\tat\tDec.\t31,\t2013 | held\tat\tDec.\t31,\t2013 |
| Assets: |  |  |  |  |  |  |  |  |  |  |
| Trading\tassets: |  |  |  |  |  |  |  |  |  |  |
| Debt\tinstruments: |  |  |  |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies | $498 | $169 |  | $819 | $(381) | $(100) | $— | $1,005 | $200 |  |
| Residential\t–\tnonagency | 663 | 407 |  | 780 | (1,028) | (91) | (5) | 726 | 205 |  |
| Commercial\t–\tnonagency | 1,207 | 114 |  | 841 | (1,522) | (208) | — | 432 | (4) |  |
| Total\tmortgage-backed\tsecurities | 2,368 | 690 |  | 2,440 | (2,931) | (399) | (5) | 2,163 | 401 |  |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 1,436 | 71 |  | 472 | (251) | (346) | — | 1,382 | 18 |  |
| Non-U.S.\tgovernment\tdebt\tsecurities | 67 | 4 |  | 1,449 | (1,479) | (8) | 110 | 143 | (1) |  |
| Corporate\tdebt\tsecurities | 5,308 | 103 |  | 7,602 | (5,975) | (1,882) | 764 | 5,920 | 466 |  |
| Loans | 10,787 | 665 |  | 10,411 | (7,431) | (685) | (292) | 13,455 | 315 |  |
| Asset-backed\tsecurities | 3,696 | 191 |  | 1,912 | (2,379) | (292) | (1,856) | 1,272 | 105 |  |
| Total\tdebt\tinstruments | 23,662 | 1,724 |  | 24,286 | (20,446) | (3,612) | (1,279) | 24,335 | 1,304 |  |
| Equity\tsecurities | 1,092 | (37) |  | 328 | (266) | (135) | (115) | 867 | 46 |  |
| Physical\tcommodities | — | (4) |  | — | (8) | — | 16 | 4 | (4) |  |
| Other | 863 | 558 |  | 659 | (95) | (120) | 135 | 2,000 | 1,074 |  |
| Total\ttrading\tassets\t–\tdebt\tand\tequity\ninstruments | 25,617 | 2,241 | (c) | 25,273 | (20,815) | (3,867) | (1,243) | 27,206 | 2,420 | (c) |
| Net\tderivative\treceivables:(a) |  |  |  |  |  |  |  |  |  |  |
| Interest\trate | 3,322 | 1,358 |  | 344 | (220) | (2,391) | (34) | 2,379 | 107 |  |
| Credit | 1,873 | (1,697) |  | 115 | (12) | (357) | 173 | 95 | (1,449) |  |
| Foreign\texchange | (1,750) | (101) |  | 3 | (4) | 683 | (31) | (1,200) | (110) |  |
| Equity | (1,806) | 2,528 |  | 1,305 | (2,111) | (1,353) | 374 | (1,063) | 872 |  |
| Commodity | 254 | 816 |  | 105 | (3) | (1,107) | 50 | 115 | 410 |  |
| Total\tnet\tderivative\treceivables | 1,893 | 2,904 | (c) | 1,872 | (2,350) | (4,525) | 532 | 326 | (170) | (c) |
| Available-for-sale\tsecurities: |  |  |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | 28,024 | 4 |  | 579 | (57) | (57) | (27,405) | 1,088 | 4 |  |
| Other | 892 | 26 |  | 508 | (216) | (6) | 30 | 1,234 | 25 |  |
| Total\tavailable-for-sale\tsecurities | 28,916 | 30 | (d) | 1,087 | (273) | (63) | (27,375) | 2,322 | 29 | (d) |
| Loans | 2,282 | 81 | (c) | 1,065 | (191) | (1,306) | — | 1,931 | (21) | (c) |
| Mortgage\tservicing\trights | 7,614 | 1,612 | (e) | 2,215 | (725) | (1,102) | — | 9,614 | 1,612 | (e) |
| Other\tassets: |  |  |  |  |  |  |  |  |  |  |
| Private\tequity\tinvestments | 5,590 | 824 | (c) | 537 | (1,080) | 140 | (195) | 5,816 | 42 | (c) |
| All\tother | 2,122 | (17) | (f) | 49 | (427) | (345) | — | 1,382 | (64) | (f) |

|  |  |  |  |  |  |  |  |  |  | Change	in	unrealized | Change	in	unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended |  | Total |  |  |  |  |  | Transfers\tinto |  | (gains)/losses\trelated\tto | (gains)/losses\trelated\tto |
| December\t31,\t2013 | Fair\tvalue\tat | realized/unrealized | realized/unrealized |  |  |  |  | and/or\tout\tof\tlevel | Fair\tvalue\tat\tDec. | financial\tinstruments | financial\tinstruments |
| (in\tmillions) | January\t1,\t2013 | (gains)/losses | (gains)/losses | Purchases(g) | Sales | Issuances | Settlements(h) | 3(i) | 31,\t2013 | held\tat\tDec.\t31,\t2013 | held\tat\tDec.\t31,\t2013 |
| Liabilities:(b) |  |  |  |  |  |  |  |  |  |  |  |
| Deposits | $1,983 | $(82) | (c) | $— | $— | $1,248 | $(222) | $(672) | $2,255 | $(88) | (c) |
| Other\tborrowed\tfunds | 1,619 | (177) | (c) | — | — | 7,108 | (6,845) | 369 | 2,074 | 291 | (c) |
| Trading\tliabilities\t–\tdebt\tand\tequity\tinstruments | 205 | (83) | (c) | (2,418) | 2,594 | — | (54) | (131) | 113 | (100) | (c) |
| Accounts\tpayable\tand\tother\tliabilities | — | — |  | — | — | — | — | — | — | — |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs | 925 | 174 | (c) | — | — | 353 | (212) | — | 1,240 | 167 | (c) |
| Long-term\tdebt | 8,476 | (435) | (c) | — | — | 6,830 | (4,362) | (501) | 10,008 | (85) | (c) |

Note:	Effective	April	1,	2015,	the	Firm	adopted	new	accounting	guidance	for	certain	investments	where	the	Firm	measures	fair	value	using	the	net	asset	value	per	share	(or	its	equivalent)	as	a	practical	expedient	and	excluded	such	investments from	the	fair	value	hierarchy.	The	guidance	was	required	to	be	applied	retrospectively,	and	accordingly,	prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.	For	further	information,	see	page	190.

(a) All	level	3	derivatives	are	presented	on	a	net	basis,	irrespective	of	underlying counterparty.

(b) Level	3	liabilities	as	a	percentage	of	total	Firm	liabilities	accounted	for	at	fair	value	(including	liabilities	measured	at	fair	value	on	a	nonrecurring	basis)	were 13%,	15%	and	18%	at	December	31,	2015,	2014	and	2013, respectively.

(c) Predominantly	reported	in	principal	transactions	revenue,	except	for	changes	in	fair	value	for	CCB	mortgage	loans,	lending-related	commitments	originated	with	the	intent	to	sell,	and	mortgage	loan	purchase	commitments,	which	are	reported in	mortgage	fees	and	related	income.

(d) Realized	gains/(losses)	on	AFS	securities,	as	well	as	other-than-temporary	impairment	losses	that	are	recorded	in	earnings,	are	reported	in	securities	gains.	Unrealized	gains/(losses)	are	reported	in	OCI.	Realized	gains/(losses)	and	foreign exchange	remeasurement	adjustments	recorded	in	income	on	AFS	securities	were	$(7)	million,	$(43)	million,	and	$17	million	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.	Unrealized	gains/(losses)	recorded	on	AFS securities	in	OCI	were	$(25)	million,	$(16)	million	and	$13	million	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.

(e) Changes	in	fair	value	for	CCB	MSRs	are	reported	in	mortgage	fees	and	related income.

(f) Predominantly	reported	in	other income.

(g) Loan	originations	are	included	in	purchases.

(h) Includes	financial	assets	and	liabilities	that	have	matured,	been	partially	or	fully	repaid,	impacts	of	modifications,	and	deconsolidations	associated	with	beneficial	interests	in VIEs.

(i) All	transfers	into	and/or	out	of	level	3	are	assumed	to	occur	at	the	beginning	of	the	quarterly	reporting	period	in	which	they occur.

# Level	3	analysis

# Consolidated	balance	sheets	changes

Level	3	assets	(including	assets	measured	at	fair	value	on	a	nonrecurring	basis) were	1.4%	of	total	Firm	assets	at	December	31,	2015.	The	following	describes significant	changes	to	level	3	assets	since	December	31,	2014,	for	those	items measured	at	fair	value	on	a	recurring	basis.	For	further	information	on	changes impacting	items	measured	at	fair	value	on	a	nonrecurring	basis,	see	Assets	and liabilities	measured	at	fair	value	on	a	nonrecurring	basis	on	pages	200–201.

Level	3	assets	were	$31.2	billion	at	December	31,	2015,	reflecting	a	decrease	of $18.0	billion	from	December	31,	2014.	This	decrease	was	driven	by	settlements (including	repayments	and	restructurings)	and	transfers	to	Level	2	due	to	an increase	in	observability	and	a	decrease	in	the	significance	of	unobservable inputs.	In	particular:

•$10.6	billion	decrease	in	trading	assets	—	debt	and	equity	instruments	was driven	by	a	decrease	of	$6.7	billion	in	trading	loans	due	to	sales,	maturities and	transfers	from	level	3	to	level	2	as	a	result	of	an	increase	in	observability of	certain	valuation	inputs	and	a	$2.3	billion	decrease	in	corporate	debt securities	due	to	transfers	from	level	3	to	level	2	as	a	result	of	an	increase	in observability	of	certain	valuation	inputs

•$4.6	billion	decrease	in	gross	derivative	receivables	was	driven	by	a	$3.9 billion	decrease	in	equity,	interest	rate	and	foreign	exchange	derivative receivables	due	to	market	movements	and	transfers	from	level	3	to	level	2	as a	result	of	an	increase	in	observability	of	certain	valuation	inputs

# Gains	and	losses

The	following	describes	significant	components	of	total	realized/unrealized gains/(losses)	for	instruments	measured	at	fair	value	on	a	recurring	basis	for	the years	ended	December	31,	2015,	2014	and	2013.	For	further	information	on these	instruments,	see	Changes	in	level	3	recurring	fair	value	measurements rollforward	tables	on	pages	195–199.

•$1.6	billion	of	net	gains	in	interest	rate,	foreign	exchange	and	equity derivative	receivables	largely	due	to	market	movements;	partially	offset	by loss	in	commodity	derivatives	due	to	market	movements

•$1.3	billion	of	net	gains	in	liabilities	due	to	market

movements

•$1.8	billion	of	losses	on	MSRs.	For	further	discussion	of	the	change,	refer	to Note	17

•$1.1	billion	of	net	gains	on	trading	assets	—	debt	and	equity	instruments, largely	driven	by	market	movements	and	client-driven	financing	transactions

•$2.9	billion	of	net	gains	on	derivatives,	largely	driven	by	$2.5	billion	of	gains on	equity	derivatives,	primarily	related	to	client-driven	market-making activity	and	a	rise	in	equity	markets;	and	$1.4	billion	of	gains,	predominantly on	interest	rate	lock	and	mortgage	loan	purchase	commitments;	partially offset	by	$1.7	billion	of	losses	on	credit	derivatives	from	the	impact	of tightening	reference	entity	credit	spreads

•$2.2	billion	of	net	gains	on	trading	assets	—	debt	and	equity	instruments, largely	driven	by	market	making	and	credit	spread	tightening	in	nonagency mortgage-backed	securities	and	trading	loans,	and	the	impact	of	market movements	on	client-driven	financing	transactions

•$1.6	billion	of	net	gains	on	MSRs.	For	further	discussion	of	the	change,	refer to	Note	17

# Credit	and	funding	adjustments

When	determining	the	fair	value	of	an	instrument,	it	may	be	necessary	to	record adjustments	to	the	Firm's	estimates	of	fair	value	in	order	to	reflect	counterparty credit	quality,	the	Firm's	own	creditworthiness,	and	the	impact	of	funding:

•CVA	is	taken	to	reflect	the	credit	quality	of	a	counterparty	in	the	valuation	of derivatives.	Derivatives	are	generally	valued	using	models	that	use	as	their basis	observable	market	parameters.	These	market	parameters	may	not consider	counterparty	non-performance	risk.	Therefore,	an	adjustment	may be	necessary	to	reflect	the	credit	quality	of	each	derivative	counterparty	to arrive	at	fair	value.

The	Firm	estimates	derivatives	CVA	using	a	scenario	analysis	to	estimate	the expected	credit	exposure	across	all	of	the	Firm's	positions	with	each counterparty,	and	then	estimates	losses	as	a	result	of	a	counterparty	credit event.	The	key	inputs	to	this	methodology	are	(i)	the	expected	positive exposure	to	each	counterparty	based	on	a	simulation	that	assumes	the	current population	of	existing	derivatives	with	each	counterparty	remains	unchanged and	considers	contractual	factors	designed	to	mitigate	the	Firm's	credit exposure,	such	as	collateral	and	legal	rights	of	offset;	(ii)	the	probability	of	a default	event	occurring	for	each	counterparty,	as	derived	from	observed	or estimated	CDS	spreads;	and	(iii)	estimated	recovery	rates	implied	by	CDS, adjusted	to	consider	the	differences	in	recovery	rates	as	a	derivative	creditor relative	to	those	reflected	in	CDS	spreads,	which	generally	reflect	senior unsecured	creditor	risk.	As	such,	the	Firm	estimates	derivatives	CVA	relative to	the	relevant	benchmark	interest	rate.

•DVA	is	taken	to	reflect	the	credit	quality	of	the	Firm	in	the	valuation	of liabilities	measured	at	fair	value.	The	DVA	calculation	methodology	is generally	consistent	with	the	CVA	methodology	described	above	and incorporates	JPMorgan	Chase's	credit	spreads	as	observed	through	the	CDS market	to	estimate	the	probability	of	default	and	loss	given	default	as	a	result of	a	systemic	event	affecting	the	Firm.	Structured	notes	DVA	is	estimated using	the	current	fair	value	of	the	structured	note	as	the	exposure	amount,	and is	otherwise	consistent	with	the	derivative	DVA	methodology.

•FVA	is	taken	to	incorporate	the	impact	of	funding	in	the	Firm's	valuation estimates	where	there	is	evidence	that	a	market	participant	in	the	principal market	would	incorporate	it	in	a	transfer	of	the	instrument.	For	collateralized derivatives,	the	fair	value	is	estimated	by	discounting	expected	future	cash flows	at	the	relevant	overnight	indexed	swap	("OIS")	rate	given	the underlying	collateral	agreement	with	the	counterparty.	For	uncollateralized (including	partially	collateralized)	over-the-counter	("OTC")	derivatives	and structured	notes,	effective	in	2013,	the	Firm	implemented	a	FVA	framework to	incorporate	the	impact	of	funding	into	its

valuation	estimates.	The	Firm's	FVA	framework	leverages	its	existing	CVA and	DVA	calculation	methodologies,	and	considers	the	fact	that	the	Firm's own	credit	risk	is	a	significant	component	of	funding	costs.	The	key	inputs	to FVA	are:	(i)	the	expected	funding	requirements	arising	from	the	Firm's positions	with	each	counterparty	and	collateral	arrangements;	(ii)	for	assets, the	estimated	market	funding	cost	in	the	principal	market;	and	(iii)	for liabilities,	the	hypothetical	market	funding	cost	for	a	transfer	to	a	market participant	with	a	similar	credit	standing	as	the	Firm.

Upon	the	implementation	of	the	FVA	framework	in	2013,	the	Firm	recorded	a one-time	$1.5	billion	loss	in	principal	transactions	revenue	that	was	recorded	in the	CIB.	While	the	FVA	framework	applies	to	both	assets	and	liabilities,	the	loss on	implementation	largely	related	to	uncollateralized	derivative	receivables given	that	the	impact	of	the	Firm's	own	credit	risk,	which	is	a	significant component	of	funding	costs,	was	already	incorporated	in	the	valuation	of liabilities	through	the	application	of	DVA.

The	following	table	provides	the	impact	of	credit	and	funding	adjustments	on principal	transactions	revenue	in	the	respective	periods,	excluding	the	effect	of any	associated	hedging	activities.	The	DVA	and	FVA	reported	below	include	the impact	of	the	Firm's	own	credit	quality	on	the	inception	value	of	liabilities	as well	as	the	impact	of	changes	in	the	Firm's	own	credit	quality	over	time.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Credit\tadjustments: |  |  |  |
| Derivatives\tCVA | $620 | $(322) | $1,886 |
| Derivatives\tDVA\tand\tFVA(a) | 73 | (58) | (1,152) |
| Structured\tnotes\tDVA\tand\tFVA(b) | 754 | 200 | (760) |

# Assets	and	liabilities	measured	at	fair	value	on	a	nonrecurring	basis

At	December	31,	2015	and	2014,	assets	measured	at	fair	value	on	a	nonrecurring basis	were	$1.7	billion	and	$4.5	billion,	respectively,	consisting	predominantly	of loans	that	had	fair	value	adjustments	for	the	years	ended	December	31,	2015	and 2014.	At	December	31,	2015,	$696	million	and	$959	million	of	these	assets	were classified	in	levels	2	and	3	of	the	fair	value	hierarchy,	respectively.	At	December 31,	2014,	$1.3	billion	and	$3.2	billion	of	these	assets	were	classified	in	levels	2 and	3	of	the	fair	value	hierarchy,	respectively.	Liabilities	measured	at	fair	value on	a	nonrecurring	basis	were	not	significant	at	December	31,	2015	and	2014.	For the	years	ended	December	31,	2015,	2014	and	2013,	there	were	no	significant transfers	between	levels	1,	2	and	3	related	to	assets	held	at	the	balance	sheet date.

Of	the	$959	million	in	level	3	assets	measured	at	fair	value	on	a	nonrecurring basis	as	of	December	31,	2015:

•$556	million	related	to	residential	real	estate	loans	carried	at	the	net realizable	value	of	the	underlying	collateral	(i.e.,	collateral-dependent	loans and	other	loans	charged	off	in	accordance	with	regulatory	guidance).	These amounts	are	classified	as	level	3,	as	they	are	valued	using	a	broker's	price opinion	and	discounted	based	upon	the	Firm's	experience	with	actual liquidation	values.	These	discounts	to	the	broker	price	opinions	ranged	from 4%	to	59%,	with	a	weighted	average	of	22%.

The	total	change	in	the	recorded	value	of	assets	and	liabilities	for	which	a	fair value	adjustment	has	been	included	in	the	Consolidated	statements	of	income	for the	years	ended	December	31,	2015,	2014	and	2013,	related	to	financial instruments	held	at	those	dates,	were	losses	of	$294	million,	$992	million	and $789	million,	respectively;	these	reductions	were	predominantly	associated	with loans.

For	further	information	about	the	measurement	of	impaired	collateral-dependent loans,	and	other	loans	where	the	carrying	value	is	based	on	the	fair	value	of	the underlying	collateral	(e.g.,	residential	mortgage	loans	charged	off	in	accordance with	regulatory	guidance),	see	Note	14.

# Additional	disclosures	about	the	fair	value	of	financial	instruments	that	are not	carried	on	the	Consolidated	balance	sheets	at	fair	value

U.S.	GAAP	requires	disclosure	of	the	estimated	fair	value	of	certain	financial instruments,	and	the	methods	and	significant	assumptions	used	to	estimate	their fair	value.	Financial	instruments	within	the	scope	of	these	disclosure requirements	are	included	in	the	following	table.	However,	certain	financial instruments	and	all	nonfinancial	instruments	are	excluded	from	the	scope	of these	disclosure	requirements.	Accordingly,	the	fair	value	disclosures	provided	in the	following	table	include	only	a	partial	estimate	of	the	fair	value	of	JPMorgan Chase's	assets	and	liabilities.	For	example,	the	Firm	has	developed	long-term relationships	with	its	customers	through	its	deposit	base	and	credit	card accounts,	commonly	referred	to	as	core	deposit	intangibles	and	credit	card relationships.	In	the	opinion	of	management,	these	items,	in	the	aggregate,	add significant	value	to	JPMorgan	Chase,	but	their	fair	value	is	not	disclosed	in	this Note.

# Financial	instruments	for	which	carrying	value	approximates	fair	value

Certain	financial	instruments	that	are	not	carried	at	fair	value	on	the Consolidated	balance	sheets	are	carried	at	amounts	that	approximate	fair	value, due	to	their	short-term	nature	and	generally	negligible	credit	risk.	These instruments	include	cash	and	due	from	banks,	deposits	with	banks,	federal	funds sold,	securities	purchased	under	resale	agreements	and	securities	borrowed, short-term	receivables	and	accrued	interest	receivable,	commercial	paper,	federal funds	purchased,	securities	loaned	and	sold	under	repurchase	agreements,	other borrowed	funds,	accounts	payable,	and	accrued	liabilities.	In	addition,	U.S. GAAP	requires	that	the	fair	value	of	deposit	liabilities	with	no	stated	maturity (i.e.,	demand,	savings	and	certain	money	market	deposits)	be	equal	to	their carrying	value;	recognition	of	the	inherent	funding	value	of	these	instruments	is not	permitted.

The	following	table	presents	by	fair	value	hierarchy	classification	the	carrying	values	and	estimated	fair	values	at	December	31,	2015	and	2014,	of	financial	assets	and liabilities,	excluding	financial	instruments	which	are	carried	at	fair	value	on	a	recurring	basis.	For	additional	information	regarding	the	financial	instruments	within	the scope	of	this	disclosure,	and	the	methods	and	significant	assumptions	used	to	estimate	their	fair	value,	see	pages	185–188	of	this	Note.

|  |  | December	31,	2015 | December	31,	2015 | December	31,	2015 |  |  | December	31,	2014 | December	31,	2014 | December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Estimated\tfair\tvalue\thierarchy | Estimated\tfair\tvalue\thierarchy |  |  |  | Estimated\tfair\tvalue\thierarchy | Estimated\tfair\tvalue\thierarchy |  |  |
| (in\tbillions) | Carrying\nvalue | Level\t1 | Level\t2 | Level\t3 | Total\nestimated\nfair\tvalue | Carrying\nvalue | Level\t1 | Level\t2 | Level\t3 | Total\nestimated\nfair\tvalue |
| Financial\tassets |  |  |  |  |  |  |  |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | $20.5 | $20.5 | $— | $— | $20.5 | $27.8 | $27.8 | $— | $— | $27.8 |
| Deposits\twith\tbanks | 340.0 | 335.9 | 4.1 | — | 340.0 | 484.5 | 480.4 | 4.1 | — | 484.5 |
| Accrued\tinterest\tand\taccounts\nreceivable | 46.6 | — | 46.4 | 0.2 | 46.6 | 70.1 | — | 70.0 | 0.1 | 70.1 |
| Federal\tfunds\tsold\tand\tsecurities\npurchased\tunder\tresale\tagreements | 189.5 | — | 189.5 | — | 189.5 | 187.2 | — | 187.2 | — | 187.2 |
| Securities\tborrowed | 98.3 | — | 98.3 | — | 98.3 | 109.4 | — | 109.4 | — | 109.4 |
| Securities,\theld-to-maturity(a) | 49.1 | — | 50.6 | — | 50.6 | 49.3 | — | 51.2 | — | 51.2 |
| Loans,\tnet\tof\tallowance\tfor\tloan\nlosses(b) | 820.8 | — | 25.4 | 802.7 | 828.1 | 740.5 | — | 21.8 | 723.1 | 744.9 |
| Other | 66.0 | 0.1 | 56.3 | 14.3 | 70.7 | 64.7 | — | 55.7 | 13.3 | 69.0 |
| Financial\tliabilities |  |  |  |  |  |  |  |  |  |  |
| Deposits | $1,267.2 | $— | $1,266.1 | $1.2 | $1,267.3 | $1,354.6 | $— | $1,353.6 | $1.2 | $1,354.8 |
| Federal\tfunds\tpurchased\tand |  |  |  |  |  |  |  |  |  |  |
| securities\tloaned\tor\tsold\tunder |  |  |  |  |  |  |  |  |  |  |
| repurchase\tagreements | 149.2 | — | 149.2 | — | 149.2 | 189.1 | — | 189.1 | — | 189.1 |
| Commercial\tpaper | 15.6 | — | 15.6 | — | 15.6 | 66.3 | — | 66.3 | — | 66.3 |
| Other\tborrowed\tfunds | 11.2 | — | 11.2 | — | 11.2 | 15.5 |  | 15.5 | — | 15.5 |
| Accounts\tpayable\tand\tother\nliabilities(c) | 144.6 | — | 141.7 | 2.8 | 144.5 | 172.6 | — | 169.6 | 2.9 | 172.5 |
| Beneficial\tinterests\tissued\tby\nconsolidated\tVIEs(d) | 41.1 | — | 40.2 | 0.9 | 41.1 | 50.2 | — | 48.2 | 2.0 | 50.2 |
| Long-term\tdebt\tand\tjunior |  |  |  |  |  |  |  |  |  |  |
| subordinated\tdeferrable\tinterest |  |  |  |  |  |  |  |  |  |  |
| debentures(e) | 255.6 | — | 257.4 | 4.3 | 261.7 | 246.2 | — | 251.2 | 3.8 | 255.0 |

(a) Carrying	value	reflects	unamortized	discount	or	premium.

(b) Fair	value	is	typically	estimated	using	a	discounted	cash	flow	model	that	incorporates	the	characteristics	of	the	underlying	loans	(including	principal,	contractual	interest	rate	and	contractual	fees) and	other	key	inputs,	including	expected	lifetime	credit	losses,	interest	rates,	prepayment	rates,	and	primary	origination	or	secondary	market	spreads.	For	certain	loans,	the	fair	value	is	measured based	on	the	value	of	the	underlying	collateral.	The	difference	between	the	estimated	fair	value	and	carrying	value	of	a	financial	asset	or	liability	is	the	result	of	the	different	methodologies	used to	determine	fair	value	as	compared	with	carrying	value.	For	example,	credit	losses	are	estimated	for	a	financial	asset's	remaining	life	in	a	fair	value	calculation	but	are	estimated	for	a	loss emergence	period	in	the	allowance	for	loan	loss	calculation;	future	loan	income	(interest	and	fees)	is	incorporated	in	a	fair	value	calculation	but	is	generally	not	considered	in	the	allowance	for loan	losses.	For	a	further	discussion	of	the	Firm's	methodologies	for	estimating	the	fair	value	of	loans	and	lending-related	commitments,	see	Valuation	hierarchy	on	pages	185–188.

(c) Certain	prior	period	amounts	have	been	revised	to	conform	with	the	current	presentation.

(d) Carrying	value	reflects	unamortized	issuance	costs.

(e) Carrying	value	reflects	unamortized	premiums	and	discounts,	issuance	costs,	and	other	valuation	adjustments.

The	majority	of	the	Firm's	lending-related	commitments	are	not	carried	at	fair	value	on	a	recurring	basis	on	the	Consolidated	balance	sheets,	nor	are	they	actively	traded.

The	carrying	value	of	the	allowance	and	the	estimated	fair	value	of	the	Firm's	wholesale	lending-related	commitments	were	as	follows	for	the	periods	indicated.

|  | December	31,	2015 | December	31,	2015 | December	31,	2015 |  |  | December	31,	2014 | December	31,	2014 | December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Carrying\nvalue(a) | Level\t1 | Estimated\tfair\tvalue\thierarchy\nLevel\t2 | Level\t3 | Total\testimated\nfair\tvalue | Carrying\nvalue(a) | Level\t1 | Estimated\tfair\tvalue\thierarchy\nLevel\t2 | Level\t3 | Total\testimated\nfair\tvalue |
| $0.8 | $— | $— | $3.0 | $3.0 | $0.6 | $— $— | $— $— | $1.6 | $1.6 |

(a) Excludes	the	current	carrying	values	of	the	guarantee	liability	and	the	offsetting	asset,	each	of	which	are	recognized	at	fair	value	at	the	inception	of	guarantees.

The	Firm	does	not	estimate	the	fair	value	of	consumer	lending-related	commitments.	In	many	cases,	the	Firm	can	reduce	or	cancel	these	commitments	by	providing	the borrower	notice	or,	in	some	cases	as	permitted	by	law,	without	notice.	For	a	further	discussion	of	the	valuation	of	lending-related	commitments,	see	page	186	of	this Note.

# Note	4	–	Fair	value	option

The	fair	value	option	provides	an	option	to	elect	fair	value	as	an	alternative measurement	for	selected	financial	assets,	financial	liabilities,	unrecognized	firm commitments,	and	written	loan	commitments.

The	Firm	has	elected	to	measure	certain	instruments	at	fair	value	in	order	to:

•Mitigate	income	statement	volatility	caused	by	the	differences	in	the measurement	basis	of	elected	instruments	(e.g.	certain	instruments	elected were	previously	accounted	for	on	an	accrual	basis)	while	the	associated	risk management	arrangements	are	accounted	for	on	a	fair	value	basis;

•Eliminate	the	complexities	of	applying	certain	accounting	models	(e.g., hedge	accounting	or	bifurcation	accounting	for	hybrid	instruments);	and/or •Better	reflect	those	instruments	that	are	managed	on	a	fair	value basis.

The	Firm's	election	of	fair	value	includes	the	following	instruments: •Loans	purchased	or	originated	as	part	of	securitization	warehousing	activity, subject	to	bifurcation	accounting,	or	managed	on	a	fair	value	basis.

•Certain	securities	financing	arrangements	with	an	embedded	derivative	and/or a	maturity	of	greater	than	one	year.

•Owned	beneficial	interests	in	securitized	financial	assets	that	contain embedded	credit	derivatives,	which	would	otherwise	be	required	to	be separately	accounted	for	as	a	derivative	instrument.

•Certain	investments	that	receive	tax	credits	and	other	equity	investments acquired	as	part	of	the	Washington	Mutual	transaction.

•Structured	notes	issued	as	part	of	CIB's	client-driven	activities.	(Structured notes	are	predominantly	financial	instruments	that	contain	embedded derivatives.)

•Certain	long-term	beneficial	interests	issued	by	CIB's	consolidated securitization	trusts	where	the	underlying	assets	are	carried	at	fair	value.

# Changes	in	fair	value	under	the	fair	value	option	election

The	following	table	presents	the	changes	in	fair	value	included	in	the	Consolidated	statements	of	income	for	the	years	ended	December	31,	2015,	2014	and	2013,	for items	for	which	the	fair	value	option	was	elected.	The	profit	and	loss	information	presented	below	only	includes	the	financial	instruments	that	were	elected	to	be measured	at	fair	value;	related	risk	management	instruments,	which	are	required	to	be	measured	at	fair	value,	are	not	included	in	the	table.

|  |  | 2015 |  |  | 2014 |  |  |  | 2013 | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Total\tchanges |  |  |  | Total\tchanges |  |  |  | Total\tchanges |
| December\t31,\t(in\tmillions) | Principal\ntransactions | All\tother\tincome | in\tfair\tvalue\nrecorded | Principal\ntransactions | All\tother\nincome |  | in\tfair\tvalue\nrecorded | Principal\ntransactions | All\tother\tincome | All\tother\tincome | in\tfair\tvalue\nrecorded |
| Federal\tfunds\tsold\tand\tsecurities\npurchased\tunder\tresale\tagreements | $(38) | $— | $(38) | $(15) | $— |  | $(15) | $(454) | $— |  | $(454) |
| Securities\tborrowed | (6) | — | (6) | (10) | — |  | (10) | 10 | — |  | 10 |
| Trading\tassets: |  |  |  |  |  |  |  |  |  |  |  |
| Debt\tand\tequity\tinstruments,\nexcluding\tloans | 756 | (d)\n(10) | 746 | 639 | — |  | 639 | 582 | 7 | (c) | 589 |
| Loans\treported\tas\ttrading\tassets: |  |  |  |  |  |  |  |  |  |  |  |
| Changes\tin\tinstrument-specific\ncredit\trisk | 138 | (c)\n41 | 179 | 885 | 29 | (c) | 914 | 1,161 | 23 | (c) | 1,184 |
| Other\tchanges\tin\tfair\tvalue | 232 | (c)\n818 | 1,050 | 352 | 1,353 | (c) | 1,705 | (133) | 1,833 | (c) | 1,700 |
| Loans: |  |  |  |  |  |  |  |  |  |  |  |
| Changes\tin\tinstrument-specific\tcredit\nrisk | 35 | — | 35 | 40 | — |  | 40 | 36 | — |  | 36 |
| Other\tchanges\tin\tfair\tvalue | 4 | — | 4 | 34 | — |  | 34 | 17 | — |  | 17 |
| Other\tassets | 79 | (d)\n(1) | 78 | 24 | 6 | (d) | 30 | 32 | 86 | (d) | 118 |
| Deposits(a) | 93 | — | 93 | (287) | — |  | (287) | 260 | — |  | 260 |
| Federal\tfunds\tpurchased\tand\tsecurities |  |  |  |  |  |  |  |  |  |  |  |
| loaned\tor\tsold\tunder\trepurchase |  |  |  |  |  |  |  |  |  |  |  |
| agreements | 8 | — | 8 | (33) | — |  | (33) | 73 | — |  | 73 |
| Other\tborrowed\tfunds(a) | 1,996 | — | 1,996 | (891) | — |  | (891) | (399) | — |  | (399) |
| Trading\tliabilities | (20) | — | (20) | (17) | — |  | (17) | (46) | — |  | (46) |
| Beneficial\tinterests\tissued\tby\nconsolidated\tVIEs | 49 | — | 49 | (233) | — |  | (233) | (278) | — |  | (278) |
| Other\tliabilities | — | — | — | (27) | — |  | (27) | — | — |  | — |
| Long-term\tdebt: |  |  |  |  |  |  |  |  |  |  |  |
| Changes\tin\tinstrument-specific\tcredit\nrisk(a) | 300 | — | 300 | 101 | — |  | 101 | (271) | — |  | (271) |
| Other\tchanges\tin\tfair\tvalue(b) | 1,088 | — | 1,088 | (615) | — |  | (615) | 1,280 | — |  | 1,280 |

(a) Total	changes	in	instrument-specific	credit	risk	(DVA)	related	to	structured	notes	were $171	million,	$20	million	and	$(337)	million	for	the	years	ended	 December	31,	2015,	2014	and	2013,	respectively.	These	totals include	such	changes	for	structured	notes	classified	within	deposits	and	other	borrowed	funds,	as	well	as	long-term	debt.

(b) Structured	notes	are	predominantly	financial	instruments	containing	embedded	derivatives.	Where	present,	the	embedded	derivative	is	the	primary	driver	of	risk.	Although	the	risk	associated	with	the	structured	notes is	actively	managed,	the	gains/(losses)	reported	in	this	table	do	not	include	the	income	statement	impact	of	the	risk	management	instruments	used	to	manage	such	risk.

(c) Reported	in	mortgage	fees	and	related	income.

(d) Reported	in	other	income.

# Determination	of	instrument-specific	credit	risk	for	items	for	which	a	fair value	election	was	made

The	following	describes	how	the	gains	and	losses	included	in	earnings	that	are attributable	to	changes	in	instrument-specific	credit	risk,	were	determined. •Loans	and	lending-related	commitments:	For	floating-rate	instruments,	all changes	in	value	are	attributed	to	instrument-specific	credit	risk.	For	fixed- rate	instruments,	an	allocation	of	the	changes	in	value	for	the	period	is	made between	those	changes	in	value	that	are	interest	rate-related	and	changes	in value	that	are	credit-related.	Allocations	are	generally	based	on	an	analysis	of borrower-specific	credit	spread	and	recovery	information,	where	available,	or benchmarking	to	similar	entities	or	industries.

•Long-term	debt:	Changes	in	value	attributable	to	instrument-specific	credit risk	were	derived	principally	from	observable	changes	in	the	Firm's	credit spread.

•Resale	and	repurchase	agreements,	securities	borrowed	agreements	and securities	lending	agreements:	Generally,	for	these	types	of	agreements,	there is	a	requirement	that	collateral	be	maintained	with	a	market	value	equal	to	or in	excess	of	the	principal	amount	loaned;	as	a	result,	there	would	be	no adjustment	or	an	immaterial	adjustment	for	instrument-specific	credit	risk related	to	these	agreements.

# Difference	between	aggregate	fair	value	and	aggregate	remaining	contractual	principal	balance	outstanding

The	following	table	reflects	the	difference	between	the	aggregate	fair	value	and	the	aggregate	remaining	contractual	principal	balance	outstanding	as	of	December	31, 2015	and	2014,	for	loans,	long-term	debt	and	long-term	beneficial	interests	for	which	the	fair	value	option	has	been	elected.

|  |  |  | 2015 |  |  |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Contractual\nprincipal\noutstanding |  | Fair\tvalue | Fair\tvalue\nover/(under)\ncontractual\nprincipal\noutstanding | Contractual\nprincipal\noutstanding |  | Fair\tvalue | Fair\tvalue\nover/(under)\ncontractual\nprincipal\noutstanding |
| Loans(a) |  |  |  |  |  |  |  |  |
| Nonaccrual\tloans |  |  |  |  |  |  |  |  |
| Loans\treported\tas\ttrading\tassets | $3,484 |  | $631 | $(2,853) | $3,847 |  | $905 | $(2,942) |
| Loans | 7 |  | 7 | — | 7 |  | 7 | — |
| Subtotal | 3,491 |  | 638 | (2,853) | 3,854 |  | 912 | (2,942) |
| All\tother\tperforming\tloans |  |  |  |  |  |  |  |  |
| Loans\treported\tas\ttrading\tassets | 30,780 |  | 28,184 | (2,596) | 37,608 |  | 35,462 | (2,146) |
| Loans | 2,771 |  | 2,752 | (19) | 2,397 |  | 2,389 | (8) |
| Total\tloans | $37,042 |  | $31,574 | $(5,468) | $43,859 |  | $38,763 | $(5,096) |
| Long-term\tdebt |  |  |  |  |  |  |  |  |
| Principal-protected\tdebt | $17,910 | (c) | $16,611 | $(1,299) | $14,660 | (c) | $15,484 | $824 |
| Nonprincipal-protected\tdebt(b) | NA |  | 16,454 | NA | NA |  | 14,742 | NA |
| Total\tlong-term\tdebt | NA |  | $33,065 | NA | NA |  | $30,226 | NA |
| Long-term\tbeneficial\tinterests |  |  |  |  |  |  |  |  |
| Nonprincipal-protected\tdebt | NA |  | $787 | NA | NA |  | $2,162 | NA |
| Total\tlong-term\tbeneficial\tinterests | NA |  | $787 | NA | NA |  | $2,162 | NA |

(a) There	were	no	performing	loans	that	were	ninety	days	or	more	past	due	as	of	December	31,	2015	and	2014,	respectively.

(b) Remaining	contractual	principal	is	not	applicable	to	nonprincipal-protected	notes.	Unlike	principal-protected	structured	notes,	for	which	the	Firm	is	obligated	to	return	a	stated	amount	of	principal at	the	maturity	of	the	note,	nonprincipal-protected	structured	notes	do	not	obligate	the	Firm	to	return	a	stated	amount	of	principal	at	maturity,	but	to	return	an	amount	based	on	the	performance	of an	underlying	variable	or	derivative	feature	embedded	in	the	note.	However,	investors	are	exposed	to	the	credit	risk	of	the	Firm	as	issuer	for	both	nonprincipal-protected	and	principal	protected notes.

(c) Where	the	Firm	issues	principal-protected	zero-coupon	or	discount	notes,	the	balance	reflects	the	contractual	principal	payment	at	maturity	or,	if	applicable,	the	contractual	principal	payment	at	the Firm's	next	call	date.

At	December	31,	2015	and	2014,	the	contractual	amount	of	letters	of	credit	for	which	the	fair	value	option	was	elected	was	$4.6	billion	and	$4.5	billion,	respectively,	with a	corresponding	fair	value	of	$(94)	million	and	$(147)	million,	respectively.	For	further	information	regarding	off-balance	sheet	lending-related	financial	instruments, see	Note	29.

# Structured	note	products	by	balance	sheet	classification	and	risk	component

The	table	below	presents	the	fair	value	of	the	structured	notes	issued	by	the	Firm,	by	balance	sheet	classification	and	the	primary	risk	to	which	the	structured	notes' embedded	derivative	relates.

|  |  | December	31,	2015 | December	31,	2015 |  |  | December	31,	2014 | December	31,	2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Long-term\ndebt | Other\nborrowed\tfunds | Deposits | Total | Long-term\ndebt | Other\nborrowed\nfunds | Deposits | Total |
| Risk\texposure |  |  |  |  |  |  |  |  |
| Interest\trate | $12,531 | $58 | $3,340 | $15,929 | $10,858 | $460 | $2,119 | $13,437 |
| Credit | 3,195 | 547 | — | 3,742 | 4,023 | 450 | — | 4,473 |
| Foreign\texchange | 1,765 | 77 | 11 | 1,853 | 2,150 | 211 | 17 | 2,378 |
| Equity | 14,293 | 8,447 | 4,993 | 27,733 | 12,348 | 12,412 | 4,415 | 29,175 |
| Commodity | 640 | 50 | 1,981 | 2,671 | 710 | 644 | 2,012 | 3,366 |
| Total\tstructured\tnotes | $32,424 | $9,179 | $10,325 | $51,928 | $30,089 | $14,177 | $8,563 | $52,829 |

# Note	5	–	Credit	risk	concentrations

Concentrations	of	credit	risk	arise	when	a	number	of	customers	are	engaged	in similar	business	activities	or	activities	in	the	same	geographic	region,	or	when they	have	similar	economic	features	that	would	cause	their	ability	to	meet contractual	obligations	to	be	similarly	affected	by	changes	in	economic conditions.

JPMorgan	Chase	regularly	monitors	various	segments	of	its	credit	portfolios	to assess	potential	credit	risk	concentrations	and	to	obtain	collateral	when	deemed necessary.	Senior	management	is	significantly	involved	in	the	credit	approval and	review	process,	and	risk	levels	are	adjusted	as	needed	to	reflect	the	Firm's risk	appetite.

In	the	Firm's	consumer	portfolio,	concentrations	are	evaluated	primarily	by product	and	by	U.S.	geographic	region,	with	a	key	focus	on	trends	and concentrations	at	the	portfolio	level,	where	potential	credit	risk	concentrations can	be	remedied	through	changes	in	underwriting	policies

and	portfolio	guidelines.	In	the	wholesale	portfolio,	credit	risk	concentrations	are evaluated	primarily	by	industry	and	monitored	regularly	on	both	an	aggregate portfolio	level	and	on	an	individual	customer	basis.	The	Firm's	wholesale exposure	is	managed	through	loan	syndications	and	participations,	loan	sales, securitizations,	credit	derivatives,	master	netting	agreements,	and	collateral	and other	risk-reduction	techniques.	For	additional	information	on	loans,	see	Note 14.

The	Firm	does	not	believe	that	its	exposure	to	any	particular	loan	product	(e.g., option	adjustable	rate	mortgages	("ARMs")),	or	industry	segment	(e.g., commercial	real	estate),	or	its	exposure	to	residential	real	estate	loans	with	high loan-to-value	ratios,	results	in	a	significant	concentration	of	credit	risk.	Terms	of loan	products	and	collateral	coverage	are	included	in	the	Firm's	assessment	when extending	credit	and	establishing	its	allowance	for	loan	losses.

The	table	below	presents	both	on–balance	sheet	and	off–balance	sheet	consumer	and	wholesale-related	credit	exposure	by	the	Firm's	three	credit	portfolio	segments	as of	December	31,	2015	and	2014.

|  |  |  |  |  |  |  |  | Off-balance	sheet(f) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Credit\texposure | Loans | Derivatives | Off-balance\tsheet(f) | Credit\texposure | Loans | Derivatives | (g) |
| Total\tconsumer,\texcluding\tcredit\tcard | $403,424 | $344,821 | $— | $58,478 | $353,635 | $295,374 | $— | $58,153 |
| Total\tcredit\tcard | 646,981 | 131,463 | — | 515,518 | 657,011 | 131,048 | — | 525,963 |
| Total\tconsumer | 1,050,405 | 476,284 | — | 573,996 | 1,010,646 | 426,422 | — | 584,116 |
| Wholesale-related(a) |  |  |  |  |  |  |  |  |
| Real\tEstate | 116,857 | 92,820 | 312 | 23,725 | 105,975 | 79,113 | 327 | 26,535 |
| Consumer\t&amp;\tRetail | 85,460 | 27,175 | 1,573 | 56,712 | 83,663 | 25,094 | 1,845 | 56,724 |
| Technology,\tMedia\t&amp;\tTelecommunications | 57,382 | 11,079 | 1,032 | 45,271 | 46,655 | 11,362 | 2,190 | 33,103 |
| Industrials | 54,386 | 16,791 | 1,428 | 36,167 | 47,859 | 16,040 | 1,303 | 30,516 |
| Healthcare | 46,053 | 16,965 | 2,751 | 26,337 | 56,516 | 13,794 | 4,542 | 38,180 |
| Banks\t&amp;\tFinance\tCos | 43,398 | 20,401 | 10,218 | 12,779 | 55,098 | 23,367 | 15,706 | 16,025 |
| Oil\t&amp;\tGas | 42,077 | 13,343 | 1,902 | 26,832 | 43,148 | 15,616 | 1,836 | 25,696 |
| Utilities | 30,853 | 5,294 | 1,689 | 23,870 | 27,441 | 4,844 | 2,272 | 20,325 |
| State\t&amp;\tMunicipal\tGovt | 29,114 | 9,626 | 3,287 | 16,201 | 31,068 | 7,593 | 4,002 | 19,473 |
| Asset\tManagers | 23,815 | 6,703 | 7,733 | 9,379 | 27,488 | 8,043 | 9,386 | 10,059 |
| Transportation | 19,227 | 9,157 | 1,575 | 8,495 | 20,619 | 10,381 | 2,247 | 7,991 |
| Central\tGovt | 17,968 | 2,000 | 13,240 | 2,728 | 19,881 | 1,103 | 15,527 | 3,251 |
| Chemicals\t&amp;\tPlastics | 15,232 | 4,033 | 369 | 10,830 | 12,612 | 3,087 | 410 | 9,115 |
| Metals\t&amp;\tMining | 14,049 | 4,622 | 607 | 8,820 | 14,969 | 5,628 | 589 | 8,752 |
| Automotive | 13,864 | 4,473 | 1,350 | 8,041 | 12,754 | 3,779 | 766 | 8,209 |
| Insurance | 11,889 | 1,094 | 1,992 | 8,803 | 13,350 | 1,175 | 3,474 | 8,701 |
| Financial\tMarkets\tInfrastructure | 7,973 | 724 | 2,602 | 4,647 | 11,986 | 928 | 6,789 | 4,269 |
| Securities\tFirms | 4,412 | 861 | 1,424 | 2,127 | 4,801 | 1,025 | 1,351 | 2,425 |
| All\tother(b) | 149,117 | 109,889 | 4,593 | 34,635 | 134,475 | 92,530 | 4,413 | 37,532 |
| Subtotal | 783,126 | 357,050 | 59,677 | 366,399 | 770,358 | 324,502 | 78,975 | 366,881 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\tvalue | 3,965 | 3,965 | — | — | 6,412 | 6,412 | — | — |
| Receivables\tfrom\tcustomers\tand\tother(c) | 13,372 | — | — | — | 28,972 | — | — | — |
| Total\twholesale-related | 800,463 | 361,015 | 59,677 | 366,399 | 805,742 | 330,914 | 78,975 | 366,881 |
| Total\texposure(d)(e) | $1,850,868 | $837,299 | $59,677 | $940,395 | $1,816,388 | $757,336 | $78,975 | $950,997 |

(a) Effective	in	the	fourth	quarter	2015,	the	Firm	realigned	its	wholesale	industry	divisions	in	order	to	better	monitor	and	manage	industry	concentrations.	Prior	period	amounts	have	been	revised	to	conform	with	current	period	presentation.	For additional	information,	see	Wholesale	credit	portfolio	on	pages	122–129.

(b) All	other	includes:	individuals;	SPEs;	holding	companies;	and	private	education	and	civic	organizations.	For	more	information	on	exposures	to	SPEs,	see	Note

(c) Primarily	consists	of	margin	loans	to	prime	brokerage	customers	that	are	generally	over-collateralized	through	a	pledge	of	assets	maintained	in	clients'	brokerage	accounts	and	are	subject	to	daily	minimum	collateral	requirements.	As	a	result of	the	Firm's	credit	risk	mitigation	practices,	the	Firm	did	not	hold	any	reserves	for	credit	impairment	on	these	receivables.

(d) For	further	information	regarding	on–balance	sheet	credit	concentrations	by	major	product	and/or	geography,	see	Note	6	and	Note	14.	For	information	regarding	concentrations	of	off–balance	sheet	lending-related	financial	instruments	by major	product,	see	Note	29.

(e) Excludes	cash	placed	with	banks	of	$351.0	billion	 and	$501.5	billion,	 at	December	31,	2015	 and	2014,	respectively,	placed	with	various	central	banks,	predominantly	Federal	Reserve Banks.

(f) Represents lending-related financial instruments.

(g) Effective	January	1,	2015,	the	Firm	no	longer	includes	within	its	disclosure	of	wholesale	lending-related	commitments	the	unused	amount	of	advised	uncommitted	lines	of	credit	as	it	is	within	the	Firm's	discretion	whether	or	not	to	make	a loan	under	these	lines,	and	the	Firm's	approval	is	generally	required	prior	to	funding.	Prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.

# Note	6	–	Derivative	instruments

Derivative	instruments	enable	end-users	to	modify	or	mitigate	exposure	to	credit or	market	risks.	Counterparties	to	a	derivative	contract	seek	to	obtain	risks	and rewards	similar	to	those	that	could	be	obtained	from	purchasing	or	selling	a related	cash	instrument	without	having	to	exchange	upfront	the	full	purchase	or sales	price.	JPMorgan	Chase	makes	markets	in	derivatives	for	clients	and	also uses	derivatives	to	hedge	or	manage	its	own	risk	exposures.	Predominantly	all	of the	Firm's	derivatives	are	entered	into	for	market-making	or	risk	management purposes.

# Market-making	derivatives

The	majority	of	the	Firm's	derivatives	are	entered	into	for	market-making purposes.	Clients	use	derivatives	to	mitigate	or	modify	interest	rate,	credit, foreign	exchange,	equity	and	commodity	risks.	The	Firm	actively	manages	the risks	from	its	exposure	to	these	derivatives	by	entering	into	other	derivative transactions	or	by	purchasing	or	selling	other	financial	instruments	that	partially or	fully	offset	the	exposure	from	client	derivatives.	The	Firm	also	seeks	to	earn	a spread	between	the	client	derivatives	and	offsetting	positions,	and	from	the remaining	open	risk	positions.

# Risk	management	derivatives

The	Firm	manages	its	market	risk	exposures	using	various	derivative instruments.

Interest	rate	contracts	are	used	to	minimize	fluctuations	in	earnings	that	are caused	by	changes	in	interest	rates.	Fixed-rate	assets	and	liabilities	appreciate	or depreciate	in	market	value	as	interest	rates	change.	Similarly,	interest	income	and expense	increases	or	decreases	as	a	result	of	variable-rate	assets	and	liabilities resetting	to	current	market	rates,	and	as	a	result	of	the	repayment	and	subsequent origination	or	issuance	of	fixed-rate	assets	and	liabilities	at	current	market	rates. Gains	or	losses	on	the	derivative	instruments	that	are	related	to	such	assets	and liabilities	are	expected	to	substantially	offset	this	variability	in	earnings.	The Firm	generally	uses	interest	rate	swaps,	forwards	and	futures	to	manage	the impact	of	interest	rate	fluctuations	on	earnings.

Foreign	currency	forward	contracts	are	used	to	manage	the	foreign	exchange	risk associated	with	certain	foreign	currency–denominated	(i.e.,	non-U.S.	dollar) assets	and	liabilities	and	forecasted	transactions,	as	well	as	the	Firm's	net investments	in	certain	non-U.S.	subsidiaries	or	branches	whose	functional currencies	are	not	the	U.S.	dollar.	As	a	result	of	fluctuations	in	foreign currencies,	the	U.S.	dollar–equivalent	values	of	the	foreign	currency– denominated	assets	and	liabilities	or	the	forecasted	revenues	or	expenses increase	or	decrease.	Gains	or	losses	on	the	derivative	instruments	related	to these	foreign	currency–denominated	assets	or	liabilities,	or	forecasted transactions,	are	expected	to	substantially	offset	this	variability.

Commodities	contracts	are	used	to	manage	the	price	risk	of	certain	commodities inventories.	Gains	or	losses	on	these	derivative	instruments	are	expected	to substantially	offset	the	depreciation	or	appreciation	of	the	related	inventory.

Credit	derivatives	are	used	to	manage	the	counterparty	credit	risk	associated	with loans	and	lending-related	commitments.	Credit	derivatives	compensate	the purchaser	when	the	entity	referenced	in	the	contract	experiences	a	credit	event, such	as	bankruptcy	or	a	failure	to	pay	an	obligation	when	due.	Credit	derivatives primarily	consist	of	credit	default	swaps.	For	a	further	discussion	of	credit derivatives,	see	the	discussion	in	the	Credit	derivatives	section	on	pages	218–220 of	this	Note.

For	more	information	about	risk	management	derivatives,	see	the	risk management	derivatives	gains	and	losses	table	on	page	218	of	this	Note,	and	the hedge	accounting	gains	and	losses	tables	on	pages	216–218	of	this	Note.

# Derivative	counterparties	and	settlement	types

The	Firm	enters	into	OTC	derivatives,	which	are	negotiated	and	settled bilaterally	with	the	derivative	counterparty.	The	Firm	also	enters	into,	as principal,	certain	exchange-traded	derivatives	("ETD")	such	as	futures	and options,	and	"cleared"	over-the-counter	("OTC-cleared")	derivative	contracts with	central	counterparties	("CCPs").	ETD	contracts	are	generally	standardized contracts	traded	on	an	exchange	and	cleared	by	the	CCP,	which	is	the counterparty	from	the	inception	of	the	transactions.	OTC-cleared	derivatives	are traded	on	a	bilateral	basis	and	then	novated	to	the	CCP	for	clearing.

# Derivative	Clearing	Services

The	Firm	provides	clearing	services	for	clients	where	the	Firm	acts	as	a	clearing member	with	respect	to	certain	derivative	exchanges	and	clearing	houses.	The Firm	does	not	reflect	the	clients'	derivative	contracts	in	its	Consolidated Financial	Statements.	For	further	information	on	the	Firm's	clearing	services,	see Note	29.

# Accounting	for	derivatives

All	free-standing	derivatives	that	the	Firm	executes	for	its	own	account	are required	to	be	recorded	on	the	Consolidated	balance	sheets	at	fair	value.

As	permitted	under	U.S.	GAAP,	the	Firm	nets	derivative	assets	and	liabilities, and	the	related	cash	collateral	receivables	and	payables,	when	a	legally enforceable	master	netting	agreement	exists	between	the	Firm	and	the	derivative counterparty.	For	further	discussion	of	the	offsetting	of	assets	and	liabilities,	see Note	1.	The	accounting	for	changes	in	value	of	a	derivative	depends	on	whether or	not	the	transaction	has	been	designated	and	qualifies	for	hedge	accounting. Derivatives	that	are	not	designated	as	hedges	are	reported	and	measured	at	fair value	through	earnings.	The	tabular	disclosures	on	pages	212–218	of	this	Note provide	additional	information	on	the	amount	of,	and	reporting	for,	derivative assets,	liabilities,	gains	and	losses.	For	further	discussion	of	derivatives embedded	in	structured	notes,	see	Notes	3	and	4.

# Derivatives	designated	as	hedges

The	Firm	applies	hedge	accounting	to	certain	derivatives	executed	for	risk management	purposes	–	generally	interest	rate,	foreign	exchange	and	commodity derivatives.	However,	JPMorgan	Chase	does	not	seek	to	apply	hedge	accounting to	all	of	the	derivatives	involved	in	the	Firm's	risk	management	activities.	For example,	the	Firm	does	not	apply	hedge	accounting	to	purchased	credit	default swaps	used	to	manage	the	credit	risk	of	loans	and	lending-related	commitments, because	of	the	difficulties	in	qualifying	such	contracts	as	hedges.	For	the	same reason,	the	Firm	does	not	apply	hedge	accounting	to	certain	interest	rate,	foreign exchange,	and	commodity	derivatives	used	for	risk	management	purposes.

To	qualify	for	hedge	accounting,	a	derivative	must	be	highly	effective	at reducing	the	risk	associated	with	the	exposure	being	hedged.	In	addition,	for	a derivative	to	be	designated	as	a	hedge,	the	risk	management	objective	and strategy	must	be	documented.	Hedge	documentation	must	identify	the	derivative hedging	instrument,	the	asset	or	liability	or	forecasted	transaction	and	type	of risk	to	be	hedged,	and	how	the	effectiveness	of	the	derivative	is	assessed prospectively	and	retrospectively.	To	assess	effectiveness,	the	Firm	uses statistical	methods	such	as	regression	analysis,	as	well	as	nonstatistical	methods including	dollar-value	comparisons	of	the	change	in	the	fair	value	of	the derivative	to	the	change	in	the	fair	value	or	cash	flows	of	the	hedged	item.	The extent	to	which	a	derivative	has	been,	and	is	expected	to	continue	to	be,	effective at	offsetting	changes	in	the	fair	value	or	cash	flows	of	the	hedged	item	must	be assessed	and	documented	at	least	quarterly.	Any	hedge	ineffectiveness	(i.e.,	the amount	by	which	the	gain	or	loss	on	the	designated	derivative	instrument	does not	exactly	offset	the	change	in	the	hedged	item	attributable	to	the	hedged	risk) must	be	reported	in	current-period	earnings.	If	it	is	determined	that	a	derivative is	not	highly	effective	at	hedging	the	designated	exposure,	hedge	accounting	is discontinued.

There	are	three	types	of	hedge	accounting	designations:	fair	value	hedges,	cash flow	hedges	and	net	investment	hedges.	JPMorgan	Chase	uses	fair	value	hedges primarily	to	hedge	fixed-rate	long-term	debt,	AFS	securities	and	certain commodities	inventories.	For	qualifying	fair	value	hedges,	the	changes	in	the	fair value	of	the	derivative,	and	in	the	value	of	the	hedged	item	for	the	risk	being hedged,	are	recognized	in	earnings.	If	the	hedge	relationship	is	terminated,	then the	adjustment	to	the	hedged	item	continues	to	be	reported	as	part	of	the	basis	of the	hedged	item,	and	for	benchmark	interest	rate	hedges	is	amortized	to	earnings as	a	yield	adjustment.	Derivative	amounts	affecting	earnings	are	recognized consistent	with	the	classification	of	the	hedged	item	–	primarily	net	interest income	and	principal	transactions	revenue.

JPMorgan	Chase	uses	cash	flow	hedges	primarily	to	hedge	the	exposure	to variability	in	forecasted	cash	flows	from	floating-rate	assets	and	liabilities	and foreign	currency–denominated	revenue	and	expense.	For	qualifying	cash	flow hedges,	the	effective	portion	of	the	change	in	the	fair	value	of	the	derivative	is recorded	in	OCI	and	recognized	in	the	Consolidated	statements	of	income	when the	hedged	cash	flows	affect	earnings.	Derivative	amounts	affecting	earnings	are recognized	consistent	with	the	classification	of	the	hedged	item	–	primarily interest	income,	interest	expense,	noninterest	revenue	and	compensation	expense. The	ineffective	portions	of	cash	flow	hedges	are	immediately	recognized	in earnings.	If	the	hedge	relationship	is	terminated,	then	the	value	of	the	derivative recorded	in	accumulated	other	comprehensive	income/(loss)	("AOCI")	is recognized	in	earnings	when	the	cash	flows	that	were	hedged	affect	earnings.	For hedge	relationships	that	are	discontinued	because	a	forecasted	transaction	is	not expected	to	occur	according	to	the	original	hedge	forecast,	any	related	derivative values	recorded	in	AOCI	are	immediately	recognized	in	earnings.

JPMorgan	Chase	uses	foreign	currency	hedges	to	protect	the	value	of	the	Firm's net	investments	in	certain	non-U.S.	subsidiaries	or	branches	whose	functional currencies	are	not	the	U.S.	dollar.	For	foreign	currency	qualifying	net	investment hedges,	changes	in	the	fair	value	of	the	derivatives	are	recorded	in	the	translation adjustments	account	within	AOCI.

The	following	table	outlines	the	Firm's	primary	uses	of	derivatives	and	the	related	hedge	accounting	designation	or	disclosure	category.

| ◦	Interest	rate | Hedge	fixed	rate	assets	and	liabilities | Fair	value	hedge | Corporate | 216 |
| :--- | :--- | :--- | :--- | :--- |
| ◦\tInterest\trate | Hedge\tfloating-rate\tassets\tand\tliabilities | Cash\tflow\thedge | Corporate | 217 |
| ◦Hedge\tforeign\tcurrency-denominated\tassets\tand\tliabilities | ◦Hedge\tforeign\tcurrency-denominated\tassets\tand\tliabilities | Fair\tvalue\thedge | Corporate | 216 |
| ◦Hedge\tforecasted\trevenue\tand\texpense | ◦Hedge\tforecasted\trevenue\tand\texpense | Cash\tflow\thedge | Corporate | 217 |
| ◦Hedge\tthe\tvalue\tof\tthe\tFirm's\tinvestments\tin\tnon-U.S.\tsubsidiaries | ◦Hedge\tthe\tvalue\tof\tthe\tFirm's\tinvestments\tin\tnon-U.S.\tsubsidiaries | Net\tinvestment\thedge | Corporate | 218 |
| ◦Hedge\tcommodity\tinventory | ◦Hedge\tcommodity\tinventory | Fair\tvalue\thedge | CIB | 216 |
| Manage\tspecifically\tidentified\trisk\texposures\tnot\tdesignated\tin\tqualifying\thedge\taccounting\trelationships: |  |  |  |  |
| ◦Manage\tthe\trisk\tof\tthe\tmortgage\tpipeline,\twarehouse\tloans\tand\tMSRs | ◦Manage\tthe\trisk\tof\tthe\tmortgage\tpipeline,\twarehouse\tloans\tand\tMSRs | Specified\trisk\tmanagement | CCB | 218 |
| ◦Manage\tthe\tcredit\trisk\tof\twholesale\tlending\texposures | ◦Manage\tthe\tcredit\trisk\tof\twholesale\tlending\texposures | Specified\trisk\tmanagement | CIB | 218 |
| ◦Manage\tthe\trisk\tof\tcertain\tcommodities-related\tcontracts\tand\tinvestments | ◦Manage\tthe\trisk\tof\tcertain\tcommodities-related\tcontracts\tand\tinvestments | Specified\trisk\tmanagement | CIB | 218 |
| ◦\tInterest\trate\tand\nforeign\texchange | Manage\tthe\trisk\tof\tcertain\tother\tspecified\tassets\tand\tliabilities | Specified\trisk\tmanagement | Corporate | 218 |
| Market-making\tderivatives\tand\tother\tactivities: |  |  |  |  |
| •Market-making\tand\trelated\trisk\tmanagement | •Market-making\tand\trelated\trisk\tmanagement | Market-making\tand\tother | CIB | 218 |
| •Other\tderivatives | •Other\tderivatives | Market-making\tand\tother | CIB,\tCorporate | 218 |

# Notional	amount	of	derivative	contracts

The	following	table	summarizes	the	notional	amount	of	derivative	contracts outstanding	as	of	December	31,	2015	and	2014.

| December	31,	(in	billions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Interest\trate\tcontracts |  |  |
| Swaps | $24,162 | $29,734 |
| Futures\tand\tforwards | 5,167 | 10,189 |
| Written\toptions | 3,506 | 3,903 |
| Purchased\toptions | 3,896 | 4,259 |
| Total\tinterest\trate\tcontracts | 36,731 | 48,085 |
| Credit\tderivatives(a) | 2,900 | 4,249 |
| Foreign\texchange\tcontracts |  |  |
| Cross-currency\tswaps | 3,199 | 3,346 |
| Spot,\tfutures\tand\tforwards | 5,028 | 4,669 |
| Written\toptions | 690 | 790 |
| Purchased\toptions | 706 | 780 |
| Total\tforeign\texchange\tcontracts | 9,623 | 9,585 |
| Equity\tcontracts |  |  |
| Swaps | 232 | 206 |
| Futures\tand\tforwards | 43 | 50 |
| Written\toptions | 395 | 432 |
| Purchased\toptions | 326 | 375 |
| Total\tequity\tcontracts | 996 | 1,063 |
| Commodity\tcontracts |  |  |
| Swaps | 83 | 126 |
| Spot,\tfutures\tand\tforwards | 99 | 193 |
| Written\toptions | 115 | 181 |
| Purchased\toptions | 112 | 180 |
| Total\tcommodity\tcontracts | 409 | 680 |
| Total\tderivative\tnotional\tamounts | $50,659 | $63,662 |

(a) For	more	information	on	volumes	and	types	of	credit	derivative	contracts,	see	the	Credit derivatives	discussion	on	pages	218–220	of	this	Note.

(b) Represents	the	sum	of	gross	long	and	gross	short	third-party	notional	derivative	contracts.

While	the	notional	amounts	disclosed	above	give	an	indication	of	the	volume	of the	Firm's	derivatives	activity,	the	notional	amounts	significantly	exceed,	in	the Firm's	view,	the	possible	losses	that	could	arise	from	such	transactions.	For most	derivative	transactions,	the	notional	amount	is	not	exchanged;	it	is	used simply	as	a	reference	to	calculate	payments.

# Impact	of	derivatives	on	the	Consolidated	balance	sheets

The	following	table	summarizes	information	on	derivative	receivables	and	payables	(before	and	after	netting	adjustments)	that	are	reflected	on	the	Firm's	Consolidated balance	sheets	as	of	December	31,	2015	and	2014,	by	accounting	designation	(e.g.,	whether	the	derivatives	were	designated	in	qualifying	hedge	accounting	relationships or	not)	and	contract	type.

# Free-standing	derivative	receivables	and	payables(a)

|  |  | Gross	derivative	receivables |  |  |  | Gross	derivative	payables |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2015\n(in\tmillions) | Not\tdesignated\nas\thedges | Designated\tas\nhedges | Total\tderivative\nreceivables | Net\tderivative\nreceivables(b) | Not\tdesignated\nas\thedges | Designated\tas Total\tderivative\nhedges | payables | Net\tderivative\npayables(b) |
| Trading\tassets\tand\tliabilities |  |  |  |  |  |  |  |  |
| Interest\trate | $665,531 | $4,080 | $669,611 | $26,363 | $632,928 | $2,238 | $635,166 | $10,221 |
| Credit | 51,468 | — | 51,468 | 1,423 | 50,529 | — | 50,529 | 1,541 |
| Foreign\texchange | 179,072 | 803 | 179,875 | 17,177 | 189,397 | 1,503 | 190,900 | 19,769 |
| Equity | 35,859 | — | 35,859 | 5,529 | 38,663 | — | 38,663 | 9,183 |
| Commodity | 23,713 | 1,352 | 25,065 | 9,185 | 27,653 | 1 | 27,654 | 12,076 |
| Total\tfair\tvalue\tof\ttrading\tassets\tand\nliabilities | $955,643 | $6,235 | $961,878 | $59,677 | $939,170 | $3,742 | $942,912 | $52,790 |

|  |  | Gross	derivative	receivables | Gross	derivative	receivables |  |  |  |  | Gross	derivative	payables | Gross	derivative	payables |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2014\n(in\tmillions) | Not\tdesignated\nas\thedges |  | Designated\tas\nhedges | Total\tderivative\nreceivables |  | Net\tderivative\nreceivables(b) | Not\tdesignated\nas\thedges |  | Designated\tas Total\tderivative\nhedges | payables |  | Net\tderivative\npayables(b) |
| Trading\tassets\tand\tliabilities |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest\trate | $944,885 | (c) | $5,372 | $950,257 | (c) | $33,725 | $915,368 | (c) | $3,011 | $918,379 | (c) | $17,745 |
| Credit | 76,842 |  | — | 76,842 |  | 1,838 | 75,895 |  | — | 75,895 |  | 1,593 |
| Foreign\texchange | 211,537 | (c) | 3,650 | 215,187 | (c) | 21,253 | 223,988 | (c) | 626 | 224,614 | (c) | 22,970 |
| Equity | 42,489 | (c) | — | 42,489 | (c) | 8,177 | 46,262 | (c) | — | 46,262 | (c) | 11,740 |
| Commodity | 43,151 |  | 502 | 43,653 |  | 13,982 | 45,455 |  | 168 | 45,623 |  | 17,068 |
| Total\tfair\tvalue\tof\ttrading\tassets\tand\nliabilities | $1,318,904 | (c) | $9,524 | $1,328,428 | (c) | $78,975 | $1,306,968 | (c) | $3,805 | $1,310,773 | (c) | $71,116 |

(a) Balances	exclude	structured	notes	for	which	the	fair	value	option	has	been	elected.	See	Note	4	for	further	information.

(b) As	permitted	under	U.S.	GAAP,	the	Firm	has	elected	to	net	derivative	receivables	and	derivative	payables	and	the	related	cash	collateral	receivables	and	payables	when	a	legally	enforceable master	netting	agreement	exists.

(c) The	prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.	These	revisions	had	no	impact	on	Firm's	Consolidated	balance	sheets	or	its	results	of	operations.

The	following	table	presents,	as	of	December	31,	2015	and	2014,	the	gross	and	net	derivative	receivables	by	contract	and	settlement	type.	Derivative	receivables	have been	netted	on	the	Consolidated	balance	sheets	against	derivative	payables	and	cash	collateral	payables	to	the	same	counterparty	with	respect	to	derivative	contracts	for which	the	Firm	has	obtained	an	appropriate	legal	opinion	with	respect	to	the	master	netting	agreement.	Where	such	a	legal	opinion	has	not	been	either	sought	or obtained,	the	receivables	are	not	eligible	under	U.S.	GAAP	for	netting	on	the	Consolidated	balance	sheets,	and	are	shown	separately	in	the	table	below.

|  |  | 2015 |  |  |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tderivative\nreceivables | Amounts\tnetted\ton\nthe\tConsolidated\nbalance\tsheets | Net\tderivative\nreceivables | Gross\tderivative\nreceivables |  | Amounts\tnetted\ton\tthe\nConsolidated\tbalance\nsheets | Net\tderivative\nreceivables |
| U.S.\tGAAP\tnettable\tderivative\treceivables |  |  |  |  |  |  |  |
| Interest\trate\tcontracts: |  |  |  |  |  |  |  |
| OTC | $417,386 | $(396,506) | $20,880 | $542,107 | (c) | (c)\n$(514,914) | $27,193 |
| OTC–cleared | 246,750 | (246,742) | 8 | 401,656 |  | (401,618) | 38 |
| Exchange-traded(a) | — | — | — | — |  | — | — |
| Total\tinterest\trate\tcontracts | 664,136 | (643,248) | 20,888 | 943,763 | (c) | (c)\n(916,532) | 27,231 |
| Credit\tcontracts: |  |  |  |  |  |  |  |
| OTC | 44,082 | (43,182) | 900 | 66,636 |  | (65,720) | 916 |
| OTC–cleared | 6,866 | (6,863) | 3 | 9,320 |  | (9,284) | 36 |
| Total\tcredit\tcontracts | 50,948 | (50,045) | 903 | 75,956 |  | (75,004) | 952 |
| Foreign\texchange\tcontracts: |  |  |  |  |  |  |  |
| OTC | 175,060 | (162,377) | 12,683 | 208,803 | (c) | (c)\n(193,900) | 14,903 |
| OTC–cleared | 323 | (321) | 2 | 36 |  | (34) | 2 |
| Exchange-traded(a) | — | — | — | — |  | — | — |
| Total\tforeign\texchange\tcontracts | 175,383 | (162,698) | 12,685 | 208,839 | (c) | (c)\n(193,934) | 14,905 |
| Equity\tcontracts: |  |  |  |  |  |  |  |
| OTC | 20,690 | (20,439) | 251 | 23,258 |  | (22,826) | 432 |
| OTC–cleared | — | — | — | — |  | — | — |
| Exchange-traded(a) | 12,285 | (9,891) | 2,394 | 13,840 | (c) | (c)\n(11,486) | 2,354 |
| Total\tequity\tcontracts | 32,975 | (30,330) | 2,645 | 37,098 | (c) | (c)\n(34,312) | 2,786 |
| Commodity\tcontracts: |  |  |  |  |  |  |  |
| OTC | 15,001 | (6,772) | 8,229 | 22,555 |  | (14,327) | 8,228 |
| OTC–cleared | — | — | — | — |  | — | — |
| Exchange-traded(a) | 9,199 | (9,108) | 91 | 19,500 |  | (15,344) | 4,156 |
| Total\tcommodity\tcontracts | 24,200 | (15,880) | 8,320 | 42,055 |  | (29,671) | 12,384 |
| Derivative\treceivables\twith\tappropriate\tlegal\topinion | $947,642 | (b)\n$(902,201) | $45,441 | $1,307,711 | (c) | (b)(c)\n$(1,249,453) | $58,258 |
| Derivative\treceivables\twhere\tan\tappropriate\tlegal\topinion\thas\tnot\nbeen\teither\tsought\tor\tobtained | 14,236 |  | 14,236 | 20,717 |  |  | 20,717 |
| Total\tderivative\treceivables\trecognized\ton\tthe\tConsolidated\nbalance\tsheets | $961,878 |  | $59,677 | $1,328,428 | (c) |  | $78,975 |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  |  |  | 213 |

(a) Exchange-traded	derivative	amounts	that	relate	to	futures	contracts	are	settled	daily.

The	following	table	presents,	as	of	December	31,	2015	and	2014,	the	gross	and	net	derivative	payables	by	contract	and	settlement	type.	Derivative	payables	have	been netted	on	the	Consolidated	balance	sheets	against	derivative	receivables	and	cash	collateral	receivables	from	the	same	counterparty	with	respect	to	derivative	contracts for	which	the	Firm	has	obtained	an	appropriate	legal	opinion	with	respect	to	the	master	netting	agreement.	Where	such	a	legal	opinion	has	not	been	either	sought	or obtained,	the	payables	are	not	eligible	under	U.S.	GAAP	for	netting	on	the	Consolidated	balance	sheets,	and	are	shown	separately	in	the	table	below.

|  |  | 2015 |  |  |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tderivative\npayables | Amounts\tnetted\ton\nthe\tConsolidated\nbalance\tsheets | Net\tderivative\npayables | Gross\tderivative\npayables |  | Amounts\tnetted\ton\tthe\nConsolidated\tbalance\nsheets | Net\tderivative\npayables |
| U.S.\tGAAP\tnettable\tderivative\tpayables |  |  |  |  |  |  |  |
| Interest\trate\tcontracts: |  |  |  |  |  |  |  |
| OTC | $393,709 | $(384,576) | $9,133 | $515,904 | (c) | (c)\n$(503,384) | $12,520 |
| OTC–cleared | 240,398 | (240,369) | 29 | 398,518 |  | (397,250) | 1,268 |
| Exchange-traded(a) | — | — | — | — |  | — | — |
| Total\tinterest\trate\tcontracts | 634,107 | (624,945) | 9,162 | 914,422 | (c) | (c)\n(900,634) | 13,788 |
| Credit\tcontracts: |  |  |  |  |  |  |  |
| OTC | 44,379 | (43,019) | 1,360 | 65,432 |  | (64,904) | 528 |
| OTC–cleared | 5,969 | (5,969) | — | 9,398 |  | (9,398) | — |
| Total\tcredit\tcontracts | 50,348 | (48,988) | 1,360 | 74,830 |  | (74,302) | 528 |
| Foreign\texchange\tcontracts: |  |  |  |  |  |  |  |
| OTC | 185,178 | (170,830) | 14,348 | 217,998 | (c) | (c)\n(201,578) | 16,420 |
| OTC–cleared | 301 | (301) | — | 66 |  | (66) | — |
| Exchange-traded(a) | — | — | — | — |  | — | — |
| Total\tforeign\texchange\tcontracts | 185,479 | (171,131) | 14,348 | 218,064 | (c) | (c)\n(201,644) | 16,420 |
| Equity\tcontracts: |  |  |  |  |  |  |  |
| OTC | 23,458 | (19,589) | 3,869 | 27,908 |  | (23,036) | 4,872 |
| OTC–cleared | — | — | — | — |  | — | — |
| Exchange-traded(a) | 10,998 | (9,891) | 1,107 | 12,864 | (c) | (c)\n(11,486) | 1,378 |
| Total\tequity\tcontracts | 34,456 | (29,480) | 4,976 | 40,772 | (c) | (c)\n(34,522) | 6,250 |
| Commodity\tcontracts: |  |  |  |  |  |  |  |
| OTC | 16,953 | (6,256) | 10,697 | 25,129 |  | (13,211) | 11,918 |
| OTC–cleared | — | — | — | — |  | — | — |
| Exchange-traded(a) | 9,374 | (9,322) | 52 | 18,486 |  | (15,344) | 3,142 |
| Total\tcommodity\tcontracts | 26,327 | (15,578) | 10,749 | 43,615 |  | (28,555) | 15,060 |
| Derivative\tpayables\twith\tappropriate\tlegal\topinions | $930,717 | (b)\n$(890,122) | $40,595 | $1,291,703 | (c) | (b)(c)\n$(1,239,657) | $52,046 |
| Derivative\tpayables\twhere\tan\tappropriate\tlegal\topinion\thas\tnot\nbeen\teither\tsought\tor\tobtained | 12,195 |  | 12,195 | 19,070 |  |  | 19,070 |
| Total\tderivative\tpayables\trecognized\ton\tthe\tConsolidated\tbalance\nsheets | $942,912 |  | $52,790 | $1,310,773 | (c) |  | $71,116 |

(a) Exchange-traded	derivative	balances	that	relate	to	futures	contracts	are	settled	daily.

(b) Included	cash	collateral	netted	of	$61.6	billion	and	$64.2	billion	related	to	OTC	and	OTC-cleared	derivatives	at	December	31,	2015,	and	2014,	respectively.

In	addition	to	the	cash	collateral	received	and	transferred	that	is	presented	on	a net	basis	with	net	derivative	receivables	and	payables,	the	Firm	receives	and transfers	additional	collateral	(financial	instruments	and	cash).	These	amounts mitigate	counterparty	credit	risk	associated	with	the	Firm's	derivative instruments	but	are	not	eligible	for	net	presentation,	because	(a)	the	collateral consists	of	non-cash	financial	instruments	(generally	U.S.	government	and

agency	securities	and	other	Group	of	Seven	Nations	("G7")	government	bonds), (b)	the	amount	of	collateral	held	or	transferred	exceeds	the	fair	value	exposure,	at the	individual	counterparty	level,	as	of	the	date	presented,	or	(c)	the	collateral relates	to	derivative	receivables	or	payables	where	an	appropriate	legal	opinion has	not	been	either	sought	or	obtained.

The	following	tables	present	information	regarding	certain	financial	instrument	collateral	received	and	transferred	as	of	December	31,	2015	and	2014,	that	is	not	eligible for	net	presentation	under	U.S.	GAAP.	The	collateral	included	in	these	tables	relates	only	to	the	derivative	instruments	for	which	appropriate	legal	opinions	have	been obtained;	excluded	are	(i)	additional	collateral	that	exceeds	the	fair	value	exposure	and	(ii)	all	collateral	related	to	derivative	instruments	where	an	appropriate	legal opinion	has	not	been	either	sought	or	obtained.

# Derivative	receivable	collateral

(a) Represents	liquid	security	collateral	as	well	as	cash	collateral	held	at	third	party	custodians.	For	some	counterparties,	the	collateral	amounts	of	financial	instruments	may	exceed	the	derivative receivables	and	derivative	payables	balances.	Where	this	is	the	case,	the	total	amount	reported	is	limited	to	the	net	derivative	receivables	and	net	derivative	payables	balances	with	that	counterparty. (b) Derivative	payables	collateral	relates	only	to	OTC	and	OTC-cleared	derivative	instruments.	Amounts	exclude	collateral	transferred	related	to	exchange-traded	derivative	instruments. (c) Net	amount	represents	exposure	of	counterparties	to	the	Firm.

# Liquidity	risk	and	credit-related	contingent	features

In	addition	to	the	specific	market	risks	introduced	by	each	derivative	contract type,	derivatives	expose	JPMorgan	Chase	to	credit	risk	—	the	risk	that	derivative counterparties	may	fail	to	meet	their	payment	obligations	under	the	derivative contracts	and	the	collateral,	if	any,	held	by	the	Firm	proves	to	be	of	insufficient value	to	cover	the	payment	obligation.	It	is	the	policy	of	JPMorgan	Chase	to actively	pursue,	where	possible,	the	use	of	legally	enforceable	master	netting arrangements	and	collateral	agreements	to	mitigate	derivative	counterparty	credit risk.	The	amount	of	derivative	receivables	reported	on	the	Consolidated	balance sheets	is	the	fair	value	of	the	derivative	contracts	after	giving	effect	to	legally enforceable	master	netting	agreements	and	cash	collateral	held	by	the	Firm.

While	derivative	receivables	expose	the	Firm	to	credit	risk,	derivative	payables expose	the	Firm	to	liquidity	risk,	as	the	derivative	contracts	typically	require	the Firm	to	post	cash	or	securities	collateral	with	counterparties	as	the	fair	value	of the	contracts	moves	in	the	counterparties'	favor	or	upon	specified	downgrades	in the	Firm's	and	its	subsidiaries'	respective	credit	ratings.	Certain	derivative contracts	also	provide	for	termination	of	the	contract,	generally	upon	a downgrade	of	either	the	Firm	or	the	counterparty,	at	the	fair	value	of	the derivative	contracts.	The	following	table	shows	the	aggregate	fair	value	of	net derivative	payables	related	to	OTC	and	OTC-cleared	derivatives	that	contain contingent	collateral	or	termination	features	that	may	be	triggered	upon	a	ratings downgrade,	and	the	associated	collateral	the	Firm	has	posted	in	the	normal course	of	business,	at	December	31,	2015	and	2014.

# OTC	and	OTC-cleared	derivative	payables	containing	downgrade	triggers

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Aggregate\tfair\tvalue\tof\tnet\tderivative\tpayables | $22,328 | $32,303 |
| Collateral\tposted | 18,942 | 27,585 |

The	following	table	shows	the	impact	of	a	single-notch	and	two-notch downgrade	of	the	long-term	issuer	ratings	of	JPMorgan	Chase	&	Co.	and	its subsidiaries,	predominantly	JPMorgan	Chase	Bank,	National	Association ("JPMorgan	Chase	Bank,	N.A."),	at	December	31,	2015	and	2014,	related	to OTC	and	OTC-cleared	derivative	contracts	with	contingent	collateral	or termination	features	that	may	be	triggered	upon	a	ratings	downgrade.	Derivatives contracts	generally	require	additional	collateral	to	be	posted	or	terminations	to	be triggered	when	the	predefined	threshold	rating	is	breached.	A	downgrade	by	a single	rating	agency	that	does	not	result	in	a	rating	lower	than	a	preexisting corresponding	rating	provided	by	another	major	rating	agency	will	generally	not result	in	additional	collateral	(except	in	certain	instances	in	which	additional initial	margin	may	be	required	upon	a	ratings	downgrade),	nor	in	termination payments	requirements.	The	liquidity	impact	in	the	table	is	calculated	based upon	a	downgrade	below	the	lowest	current	rating	by	the	rating	agencies	referred to	in	the	derivative	contract.

# Liquidity	impact	of	downgrade	triggers	on	OTC	and	OTC-cleared	derivatives

|  |  | 2015 |  |  | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions)\nAmount\tof\tadditional\tcollateral\tto\tbe\tposted\tupon\tdowngrade (a) |  | Single-notch\ndowngrade | Two-notch\ndowngrade | Single-notch\ndowngrade | Two-notch\ndowngrade |
|  |  | $807 | $3,028 | $1,046 | $3,331 |
| Amount\trequired\tto\tsettle\tcontracts\twith\ttermination\ttriggers\tupon\tdowngrade | (b) |  |  |  |  |
|  |  | 271 | 1,093 | 366 | 1,388 |

(a) Includes	the	additional	collateral	to	be	posted	for	initial	margin.

(b) Amounts	represent	fair	values	of	derivative	payables,	and	do	not	reflect	collateral	posted.

# Derivatives	executed	in	contemplation	of	a	sale	of	the	underlying	financial	asset

In	certain	instances	the	Firm	enters	into	transactions	in	which	it	transfers	financial	assets	but	maintains	the	economic	exposure	to	the	transferred	assets	by	entering	into	a derivative	with	the	same	counterparty	in	contemplation	of	the	initial	transfer.	The	Firm	generally	accounts	for	such	transfers	as	collateralized	financing	transactions	as described	in	Note	13,	but	in	limited	circumstances	they	may	qualify	to	be	accounted	for	as	a	sale	and	a	derivative	under	U.S.	GAAP.	The	amount	of	such	transfers accounted	for	as	a	sale	where	the	associated	derivative	was	outstanding	at	December	31,	2015	was	not	material.

# Impact	of	derivatives	on	the	Consolidated	statements	of	income

The	following	tables	provide	information	related	to	gains	and	losses	recorded	on	derivatives	based	on	their	hedge	accounting designation	or	purpose.

# Fair	value	hedge	gains	and	losses

The	following	tables	present	derivative	instruments,	by	contract	type,	used	in	fair	value	hedge	accounting	relationships,	as	well	as	pretax	gains/(losses)	recorded	on	such derivatives	and	the	related	hedged	items	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.	The	Firm	includes	gains/(losses)	on	the	hedging	derivative and	the	related	hedged	item	in	the	same	line	item	in	the	Consolidated	statements	of	income.

|  |  | Gains/(losses)	recorded	in	income |  | Income	statement	impact	due	to: | Income	statement	impact	due	to: |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2015\t(in\tmillions) | Derivatives | Hedged\titems | Total\tincome\nstatement\nimpact | Hedge\tineffectiveness(d) | Excluded\ncomponents(e) |
| Contract\ttype |  |  |  |  |  |
| Interest\trate(a) | $38 | $911 | $949 | $3 | $946 |
| Foreign\texchange(b) | 6,030 | (6,006) | 24 | — | 24 |
| Commodity(c) | 1,153 | (1,142) | 11 | (13) | 24 |
| Total | $7,221 | $(6,237) | $984 | $(10) | $994 |

|  |  | Gains/(losses)	recorded	in	income |  | Income	statement	impact	due	to: | Income	statement	impact	due	to: |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2014\t(in\tmillions) | Derivatives Hedged\titems | Derivatives Hedged\titems | Total\tincome\nstatement\nimpact | Hedge\tineffectiveness(d) | Excluded\ncomponents(e) |
| Contract\ttype |  |  |  |  |  |
| Interest\trate(a) | $2,106 | $(801) | $1,305 | $131 | $1,174 |
| Foreign\texchange(b) | 8,279 | (8,532) | (253) | — | (253) |
| Commodity(c) | 49 | 145 | 194 | 42 | 152 |
| Total | $10,434 | $(9,188) | $1,246 | $173 | $1,073 |

|  |  | Gains/(losses)	recorded	in	income |  | Income	statement	impact	due	to: | Income	statement	impact	due	to: |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2013\t(in\tmillions) | Derivatives Hedged\titems | Derivatives Hedged\titems | Total\tincome\nstatement\nimpact | Hedge\tineffectiveness(d) | Excluded\ncomponents(e) |
| Contract\ttype |  |  |  |  |  |
| Interest\trate(a) | $(3,469) | $4,851 | $1,382 | $(132) | $1,514 |
| Foreign\texchange(b) | (1,096) | 864 | (232) | — | (232) |
| Commodity(c) | 485 | (1,304) | (819) | 38 | (857) |
| Total | $(4,080) | $4,411 | $331 | $(94) | $425 |

(a) Primarily	consists	of	hedges	of	the	benchmark	(e.g.,	London	Interbank	Offered	Rate	("LIBOR"))	interest	rate	risk	of	fixed-rate	long-term	debt	and	AFS	securities.	Gains	and	losses	were	recorded in	net	interest	income.

(b) Primarily	consists	of	hedges	of	the	foreign	currency	risk	of	long-term	debt	and	AFS	securities	for	changes	in	spot	foreign	currency	rates.	Gains	and	losses	related	to	the	derivatives	and	the	hedged items,	due	to	changes	in	foreign	currency	rates,	were	recorded	primarily	in	principal	transactions	revenue	and	net	interest	income.

(c) Consists	of	overall	fair	value	hedges	of	physical	commodities	inventories	that	are	generally	carried	at	the	lower	of	cost	or	market	(market	approximates	fair	value).	Gains	and	losses	were	recorded in	principal	transactions	revenue.

(d) Hedge	ineffectiveness	is	the	amount	by	which	the	gain	or	loss	on	the	designated	derivative	instrument	does	not	exactly	offset	the	gain	or	loss	on	the	hedged	item	attributable	to	the	hedged	risk. (e) The	assessment	of	hedge	effectiveness	excludes	certain	components	of	the	changes	in	fair	values	of	the	derivatives	and	hedged	items	such	as	forward	points	on	foreign	exchange	forward	contracts and	time	values.

# Cash	flow	hedge	gains	and	losses

The	following	tables	present	derivative	instruments,	by	contract	type,	used	in	cash	flow	hedge	accounting	relationships,	and	the	pretax	gains/(losses)	recorded	on	such derivatives,	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.	The	Firm	includes	the	gain/(loss)	on	the	hedging	derivative	and	the	change	in	cash flows	on	the	hedged	item	in	the	same	line	item	in	the	Consolidated	statements	of	income.

Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss)

| Year	ended	December	31,	2015<br>(in	millions) | Derivatives	–	effective<br>portion	reclassified	from<br>AOCI	to	income | Hedge	ineffectiveness<br>recorded	directly	in	income(c) | Total	income	statement<br>impact | Derivatives	–	effective<br>portion	recorded	in<br>OCI | Total	change<br>in	OCI<br>for	period |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Contract\ttype |  |  |  |  |  |
| Interest\trate(a) | $(99) | $— | $(99) | $(44) | $55 |
| Foreign\texchange(b) | (81) | — | (81) | (53) | 28 |
| Total | $(180) | $— | $(180) | $(97) | $83 |

|  |  | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss) | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss) | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss) |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2014\n(in\tmillions) | Derivatives\t–\teffective\nportion\treclassified\nfrom\tAOCI\tto\tincome | Hedge\tineffectiveness\nrecorded\tdirectly\tin\nincome(c) | Total\tincome\tstatement\nimpact | Derivatives\t–\neffective\tportion\nrecorded\tin\tOCI | Total\tchange\nin\tOCI\nfor\tperiod |
| Contract\ttype |  |  |  |  |  |
| Interest\trate(a) | $(54) | $— | $(54) | $189 | $243 |
| Foreign\texchange(b) | 78 | — | 78 | (91) | (169) |
| Total | $24 | $— | $24 | $98 | $74 |

|  |  | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss) | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss) | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss) |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2013\n(in\tmillions) | Derivatives\t–\teffective\nportion\treclassified\nfrom\tAOCI\tto\tincome | Hedge\tineffectiveness\nrecorded\tdirectly\tin\nincome(c) | Total\tincome\tstatement\nimpact | Derivatives\t–\neffective\tportion\nrecorded\tin\tOCI | Total\tchange\nin\tOCI\nfor\tperiod |
| Contract\ttype |  |  |  |  |  |
| Interest\trate(a) | $(108) | $— | $(108) | $(565) | $(457) |
| Foreign\texchange(b) | 7 | — | 7 | 40 | 33 |
| Total | $(101) | $— | $(101) | $(525) | $(424) |

(a) Primarily	consists	of	benchmark	interest	rate	hedges	of	LIBOR-indexed	floating-rate	assets	and	floating-rate	liabilities.	Gains	and	losses	were	recorded	in	net	interest	income,	and	for	the forecasted	transactions	that	the	Firm	determined	during	the	year	ended	December	31,	2015,	were	probable	of	not	occurring,	in	other	income.

(b) Primarily	consists	of	hedges	of	the	foreign	currency	risk	of	non-U.S.	dollar-denominated	revenue	and	expense.	The	income	statement	classification	of	gains	and	losses	follows	the	hedged	item	– primarily	noninterest	revenue	and	compensation	expense.

(c) Hedge	ineffectiveness	is	the	amount	by	which	the	cumulative	gain	or	loss	on	the	designated	derivative	instrument	exceeds	the	present	value	of	the	cumulative	expected	change	in	cash	flows	on the	hedged	item	attributable	to	the	hedged	risk.

In	2015,	the	Firm	reclassified	approximately	$150	million	of	net	losses	from	AOCI	to	other	income	because	the	Firm	determined	that	it	was	probable	that	the	forecasted interest	payment	cash	flows	would	not	occur	as	a	result	of	the	planned	reduction	in	wholesale	non-operating	deposits.	The	Firm	did	not	experience	any	forecasted transactions	that	failed	to	occur	for	the	years	ended	December	31,	2014	or	2013.

Over	the	next	12	months,	the	Firm	expects	that	approximately	$95	million	(after-tax)	of	net	losses	recorded	in	AOCI	at	December	31,	2015,	related	to	cash	flow	hedges, will	be	recognized	in	income.	For	terminated	cash	flow	hedges,	the	maximum	length	of	time	over	which	forecasted	transactions	are	remaining	is	approximately	7	years. For	open	cash	flow	hedges,	the	maximum	length	of	time	over	which	forecasted	transactions	are	hedged	is	approximately	2	years.	The	Firm's	longer-dated	forecasted transactions	relate	to	core	lending	and	borrowing	activities.

# Net	investment	hedge	gains	and	losses

The	following	table	presents	hedging	instruments,	by	contract	type,	that	were	used	in	net	investment	hedge	accounting	relationships,	and	the	pretax	gains/(losses) recorded	on	such	instruments	for	the	years	ended	December	31,	2015,	2014	and	2013.

|  | 2015 | 2015 | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss)<br>2014 | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss)<br>2014 | 2013 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\n(in\tmillions) | Excluded\ncomponents\trecorded\ndirectly\tin\tincome(a) | Effective\tportion\nrecorded\tin\tOCI | Excluded\ncomponents\nrecorded\tdirectly\tin\nincome(a) | Effective\tportion\nrecorded\tin\tOCI | Excluded\ncomponents\nrecorded\tdirectly\tin\nincome(a) | Effective\tportion\nrecorded\tin\tOCI |
| Foreign\texchange\tderivatives | $(379) | $1,885 | $(448) | $1,698 | $(383) | $773 |

(a) Certain	components	of	hedging	derivatives	are	permitted	to	be	excluded	from	the	assessment	of	hedge	effectiveness,	such	as	forward	points	on	foreign	exchange	forward	contracts.	Amounts related	to	excluded	components	are	recorded	in	other	income.	The	Firm	measures	the	ineffectiveness	of	net	investment	hedge	accounting	relationships	based	on	changes	in	spot	foreign	currency rates	and,	therefore,	there	was	no	significant	ineffectiveness	for	net	investment	hedge	accounting	relationships	during	2015,	2014	and	2013.

Gains	and	losses	on	derivatives	used	for	specified	risk	management	purposes The	following	table	presents	pretax	gains/(losses)	recorded	on	a	limited	number of	derivatives,	not	designated	in	hedge	accounting	relationships,	that	are	used	to manage	risks	associated	with	certain	specified	assets	and	liabilities,	including certain	risks	arising	from	the	mortgage	pipeline,	warehouse	loans,	MSRs, wholesale	lending	exposures,	AFS	securities,	foreign	currency-denominated assets	and	liabilities,	and	commodities-related	contracts	and	investments.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Contract\ttype |  |  |  |
| Interest\trate(a) | $853 | $2,308 | $617 |
| Credit(b) | 70 | (58) | (142) |
| Foreign\texchange(c) | 25 | (7) | 1 |
| Commodity(d) | (12) | 156 | 178 |
| Total | $936 | $2,399 | $654 |

(a) Primarily	represents	interest	rate	derivatives	used	to	hedge	the	interest	rate	risk	inherent	in the	mortgage	pipeline,	warehouse	loans	and	MSRs,	as	well	as	written	commitments	to originate	warehouse	loans.	Gains	and	losses	were	recorded	predominantly	in	mortgage	fees and	related	income.

(b) Relates	to	credit	derivatives	used	to	mitigate	credit	risk	associated	with	lending	exposures in	the	Firm's	wholesale	businesses.	These	derivatives	do	not	include	credit	derivatives	used to	mitigate	counterparty	credit	risk	arising	from	derivative	receivables,	which	is	included	in gains	and	losses	on	derivatives	related	to	market-making	activities	and	other	derivatives. Gains	and	losses	were	recorded	in	principal	transactions	revenue.

(c) Primarily	relates	to	hedges	of	the	foreign	exchange	risk	of	specified	foreign	currency- denominated	assets	and	liabilities.	Gains	and	losses	were	recorded	in	principal	transactions revenue.

(d) Primarily	relates	to	commodity	derivatives	used	to	mitigate	energy	price	risk	associated with	energy-related	contracts	and	investments.	Gains	and	losses	were	recorded	in	principal transactions	revenue.

Gains	and	losses	on	derivatives	related	to	market-making	activities	and	other derivatives

The	Firm	makes	markets	in	derivatives	in	order	to	meet	the	needs	of	customers and	uses	derivatives	to	manage	certain	risks	associated	with	net	open	risk positions	from	the	Firm's	market-making	activities,	including	the	counterparty credit	risk	arising	from	derivative	receivables.	All	derivatives	not	included	in	the hedge	accounting	or	specified	risk	management	categories	above	are	included	in this	category.	Gains	and	losses	on	these	derivatives	are	primarily	recorded	in principal	transactions	revenue.	See	Note	7	for	information	on	principal transactions	revenue.

Credit	derivatives	are	financial	instruments	whose	value	is	derived	from	the credit	risk	associated	with	the	debt	of	a	third-party	issuer	(the	reference	entity) and	which	allow	one	party	(the	protection	purchaser)	to	transfer	that	risk	to another	party	(the	protection	seller).	Credit	derivatives	expose	the	protection purchaser	to	the	creditworthiness	of	the	protection	seller,	as	the	protection	seller is	required	to	make	payments	under	the	contract	when	the	reference	entity experiences	a	credit	event,	such	as	a	bankruptcy,	a	failure	to	pay	its	obligation	or a	restructuring.	The	seller	of	credit	protection	receives	a	premium	for	providing protection	but	has	the	risk	that	the	underlying	instrument	referenced	in	the contract	will	be	subject	to	a	credit	event.

The	Firm	is	both	a	purchaser	and	seller	of	protection	in	the	credit	derivatives market	and	uses	these	derivatives	for	two	primary	purposes.	First,	in	its	capacity as	a	market-maker,	the	Firm	actively	manages	a	portfolio	of	credit	derivatives	by purchasing	and	selling	credit	protection,	predominantly	on	corporate	debt obligations,	to	meet	the	needs	of	customers.	Second,	as	an	end-user,	the	Firm uses	credit	derivatives	to	manage	credit	risk	associated	with	lending	exposures (loans	and	unfunded	commitments)	and	derivatives	counterparty	exposures	in	the Firm's	wholesale	businesses,	and	to	manage	the	credit	risk	arising	from	certain financial	instruments	in	the	Firm's	market-making	businesses.	Following	is	a summary	of	various	types	of	credit	derivatives.

# Credit	default	swaps

Credit	derivatives	may	reference	the	credit	of	either	a	single	reference	entity ("single-name")	or	a	broad-based	index.	The	Firm	purchases	and	sells	protection on	both	single-	name	and	index-reference	obligations.	Single-name	CDS	and index	CDS	contracts	are	either	OTC	or	OTC-cleared	derivative	contracts. Single-name	CDS	are	used	to	manage	the	default	risk	of	a	single	reference entity,	while	index	CDS	contracts	are	used	to	manage	the	credit	risk	associated with	the	broader	credit	markets	or	credit	market	segments.	Like	the	S&P	500	and other	market	indices,	a	CDS	index	consists	of	a	portfolio	of	CDS	across	many reference	entities.	New	series	of	CDS	indices	are	periodically	established	with	a new	underlying	portfolio	of	reference	entities	to	reflect	changes	in	the	credit markets.	If	one	of	the	reference	entities	in	the	index	experiences	a	credit	event, then	the	reference	entity	that	defaulted	is	removed	from	the	index.	CDS	can	also be	referenced	against	specific	portfolios	of	reference	names	or	against customized	exposure	levels	based	on	specific	client	demands:	for	example,	to provide	protection	against	the	first	$1	million	of	realized	credit	losses	in	a	$10 million	portfolio	of	exposure.	Such	structures	are	commonly	known	as	tranche CDS.

For	both	single-name	CDS	contracts	and	index	CDS	contracts,	upon	the occurrence	of	a	credit	event,	under	the	terms	of	a	CDS	contract	neither	party	to the	CDS	contract	has	recourse	to	the	reference	entity.	The	protection	purchaser has	recourse	to	the	protection	seller	for	the	difference	between	the	face	value	of the	CDS	contract	and	the	fair	value	of	the	reference	obligation	at	settlement	of the	credit	derivative	contract,	also	known	as	the	recovery	value.	The	protection purchaser	does	not	need	to	hold	the	debt	instrument	of	the	underlying	reference entity	in	order	to	receive	amounts	due	under	the	CDS	contract	when	a	credit event	occurs.

# Credit-related	notes

A	credit-related	note	is	a	funded	credit	derivative	where	the	issuer	of	the	credit- related	note	purchases	from	the	note	investor	credit	protection	on	a	reference entity	or	an	index.	Under	the	contract,	the	investor	pays	the	issuer	the	par	value of	the	note	at	the	inception	of	the	transaction,	and	in	return,	the	issuer	pays periodic	payments	to	the	investor,	based	on	the	credit	risk	of	the	referenced entity.	The	issuer	also	repays	the	investor	the	par	value	of	the	note	at	maturity unless	the	reference	entity	(or	one	of	the	entities	that	makes	up	a	reference	index) experiences	a	specified	credit	event.	If	a	credit	event	occurs,	the	issuer	is	not obligated	to	repay	the	par	value	of	the	note,	but	rather,	the	issuer	pays	the investor	the	difference	between	the	par	value	of	the	note	and	the	fair	value	of	the defaulted	reference	obligation	at	the	time	of	settlement.	Neither	party	to	the credit-related	note	has	recourse	to	the	defaulting	reference	entity.

The	following	tables	present	a	summary	of	the	notional	amounts	of	credit derivatives	and	credit-related	notes	the	Firm	sold	and	purchased	as	of December	31,	2015	and	2014.	Upon	a	credit	event,	the	Firm	as	a	seller	of protection	would	typically	pay	out	only	a	percentage	of	the	full	notional	amount of	net	protection	sold,	as	the	amount	actually	required	to	be	paid	on	the	contracts takes	into	account	the	recovery	value	of	the	reference	obligation	at	the	time	of settlement.	The	Firm	manages	the	credit	risk	on	contracts	to	sell	protection	by purchasing	protection	with	identical	or	similar	underlying	reference	entities. Other	purchased	protection	referenced	in	the	following	tables	includes	credit derivatives	bought	on	related,	but	not	identical,	reference	positions	(including indices,	portfolio	coverage	and	other	reference	points)	as	well	as	protection purchased	through	credit-related	notes.

The	Firm	does	not	use	notional	amounts	of	credit	derivatives	as	the	primary	measure	of	risk	management	for	such	derivatives,	because	the	notional	amount	does	not	take into	account	the	probability	of	the	occurrence	of	a	credit	event,	the	recovery	value	of	the	reference	obligation,	or	related	cash	instruments	and	economic	hedges,	each	of which	reduces,	in	the	Firm's	view,	the	risks	associated	with	such	derivatives.

# Total	credit	derivatives	and	credit-related	notes

| December	31,	2015	(in	millions) | Protection	sold | Protection	purchased	with<br>identical	underlyings(b) | Net	protection<br>(sold)/purchased(c) | Other	protection<br>purchased(d) |
| :--- | :--- | :--- | :--- | :--- |
| Credit\tderivatives |  |  |  |  |
| Credit\tdefault\tswaps | $(1,386,071) | $1,402,201 | $16,130 | $12,011 |
| Other\tcredit\tderivatives(a) | (42,738) | 38,158 | (4,580) | 18,792 |
| Total\tcredit\tderivatives | (1,428,809) | 1,440,359 | 11,550 | 30,803 |
| Credit-related\tnotes | (30) | — | (30) | 4,715 |
| Total | $(1,428,839) | $1,440,359 | $11,520 | $35,518 |

| December	31,	2014	(in	millions) | Protection	sold | Protection	purchased	with<br>identical	underlyings(b) | Net	protection<br>(sold)/purchased(c) | Other	protection<br>purchased(d) |
| :--- | :--- | :--- | :--- | :--- |
| Credit\tderivatives |  |  |  |  |
| Credit\tdefault\tswaps | $(2,056,982) | $2,078,096 | $21,114 | $18,631 |
| Other\tcredit\tderivatives(a) | (43,281) | 32,048 | (11,233) | 19,475 |
| Total\tcredit\tderivatives | (2,100,263) | 2,110,144 | 9,881 | 38,106 |
| Credit-related\tnotes | (40) | — | (40) | 3,704 |
| Total | $(2,100,303) | $2,110,144 | $9,841 | $41,810 |

(a) Other	credit	derivatives	predominantly	consists	of	credit	swap

options.

(b) Represents	the	total	notional	amount	of	protection	purchased	where	the	underlying	reference	instrument	is	identical	to	the	reference	instrument	on	protection	sold;	the	notional	amount	of	protection	purchased	for	each	individual	identical underlying	reference	instrument	may	be	greater	or	lower	than	the	notional	amount	of	protection	sold.

(c) Does	not	take	into	account	the	fair	value	of	the	reference	obligation	at	the	time	of	settlement,	which	would	generally	reduce	the	amount	the	seller	of	protection	pays	to	the	buyer	of	protection	in	determining	settlement value.

(d) Represents	protection	purchased	by	the	Firm	on	referenced	instruments	(single-name,	portfolio	or	index)	where	the	Firm	has	not	sold	any	protection	on	the	identical	reference instrument.

The	following	tables	summarize	the	notional	amounts	by	the	ratings	and	maturity	profile,	and	the	total	fair	value,	of	credit	derivatives	and	credit-related	notes	as	of December	31,	2015	and	2014,	where	JPMorgan	Chase	is	the	seller	of	protection.	The	maturity	profile	is	based	on	the	remaining	contractual	maturity	of	the	credit derivative	contracts.	The	ratings	profile	is	based	on	the	rating	of	the	reference	entity	on	which	the	credit	derivative	contract	is	based.	The	ratings	and	maturity	profile	of credit	derivatives	and	credit-related	notes	where	JPMorgan	Chase	is	the	purchaser	of	protection	are	comparable	to	the	profile	reflected	below.

# Protection	sold	–	credit	derivatives	and	credit-related	notes	ratings(a)/maturity	profile

| December	31,	2015 |  |  |  | Total	notional | Fair	value	of | Fair	value	of | Net	fair |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | &lt;1\tyear | 1–5\tyears | &gt;5\tyears | amount | receivables(b) | payables(b) | value |
| Risk\trating\tof\treference\tentity |  |  |  |  |  |  |  |
| Investment-grade | $(307,211) | $(699,227) | $(46,970) | $(1,053,408) | $13,539 | $(6,836) | $6,703 |
| Noninvestment-grade | (109,195) | (245,151) | (21,085) | (375,431) | 10,823 | (18,891) | (8,068) |
| Total | $(416,406) | $(944,378) | $(68,055) | $(1,428,839) | $24,362 | $(25,727) | $(1,365) |
| December\t31,\t2014 |  |  |  | Total\tnotional | Fair\tvalue\tof | Fair\tvalue\tof | Net\tfair |
| (in\tmillions) | &lt;1\tyear | 1–5\tyears | &gt;5\tyears | amount | receivables(b) | payables(b) | value |
| Risk\trating\tof\treference\tentity |  |  |  |  |  |  |  |
| Investment-grade | $(323,398) | $(1,118,293) | $(79,486) | $(1,521,177) | $25,767 | $(6,314) | $19,453 |
| Noninvestment-grade | (157,281) | (396,798) | (25,047) | (579,126) | 20,677 | (22,455) | (1,778) |
| Total | $(480,679) | $(1,515,091) | $(104,533) | $(2,100,303) | $46,444 | $(28,769) | $17,675 |

(a) The	ratings	scale	is	primarily	based	on	external	credit	ratings	defined	by	S&P	and	Moody's	Investors	Service	("Moody's").

(b) Amounts	are	shown	on	a	gross	basis,	before	the	benefit	of	legally	enforceable	master	netting	agreements	and	cash	collateral	received	by	the	Firm.

# Note	7	–	Noninterest	revenue

# Investment	banking	fees

This	revenue	category	includes	equity	and	debt	underwriting	and	advisory	fees. Underwriting	fees	are	recognized	as	revenue	when	the	Firm	has	rendered	all services	to	the	issuer	and	is	entitled	to	collect	the	fee	from	the	issuer,	as	long	as there	are	no	other	contingencies	associated	with	the	fee.	Underwriting	fees	are net	of	syndicate	expense;	the	Firm	recognizes	credit	arrangement	and syndication	fees	as	revenue	after	satisfying	certain	retention,	timing	and	yield criteria.	Advisory	fees	are	recognized	as	revenue	when	the	related	services	have been	performed	and	the	fee	has	been	earned.

The	following	table	presents	the	components	of	investment	banking	fees.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Underwriting |  |  |  |
| Equity | $1,408 | $1,571 | $1,499 |
| Debt | 3,232 | 3,340 | 3,537 |
| Total\tunderwriting | 4,640 | 4,911 | 5,036 |
| Advisory | 2,111 | 1,631 | 1,318 |
| Total\tinvestment\tbanking\tfees | $6,751 | $6,542 | $6,354 |

# Principal	transactions

Principal	transactions	revenue	consists	of	realized	and	unrealized	gains	and losses	on	derivatives	and	other	instruments	(including	those	accounted	for	under the	fair	value	option)	primarily	used	in	client-driven	market-making	activities and	on	private	equity	investments.	In	connection	with	its	client-driven	market- making	activities,	the	Firm	transacts	in	debt	and	equity	instruments,	derivatives and	commodities	(including	physical	commodities	inventories	and	financial instruments	that	reference	commodities).

Principal	transactions	revenue	also	includes	realized	and	unrealized	gains	and losses	related	to	hedge	accounting	and	specified	risk-management	activities, including:	(a)	certain	derivatives	designated	in	qualifying	hedge	accounting relationships	(primarily	fair	value	hedges	of	commodity	and	foreign	exchange risk),	(b)	certain	derivatives	used	for	specific	risk	management	purposes, primarily	to	mitigate	credit	risk,	foreign	exchange	risk	and	commodity	risk,	and (c)	other	derivatives.	For	further	information	on	the	income	statement classification	of	gains	and	losses	from	derivatives	activities,	see	Note	6.

In	the	financial	commodity	markets,	the	Firm	transacts	in	OTC	derivatives	(e.g., swaps,	forwards,	options)	and	exchange-traded	derivatives	that	reference	a	wide range	of	underlying	commodities.	In	the	physical	commodity	markets,	the	Firm primarily	purchases	and	sells	precious	and	base	metals	and	may	hold	other commodities	inventories	under	financing	and	other	arrangements	with	clients. Prior	to	the	2014	sale	of	certain	parts	of	its	physical	commodity	business,	the Firm	also	engaged	in	the	purchase,	sale,	transport	and	storage	of	power,	gas, liquefied	natural	gas,	coal,	crude	oil	and	refined	products.

Physical	commodities	inventories	are	generally	carried	at	the	lower	of	cost	or market	(market	approximates	fair	value)	subject	to	any	applicable	fair	value hedge	accounting	adjustments,	with	realized	gains	and	losses	and	unrealized losses	recorded	in	principal	transactions	revenue.

The	following	table	presents	all	realized	and	unrealized	gains	and	losses recorded	in	principal	transactions	revenue.	This	table	excludes	interest	income and	interest	expense	on	trading	assets	and	liabilities,	which	are	an	integral	part	of the	overall	performance	of	the	Firm's	client-driven	market-making	activities.	See Note	8	for	further	information	on	interest	income	and	interest	expense.	Trading revenue	is	presented	primarily	by	instrument	type.	The	Firm's	client-driven market-making	businesses	generally	utilize	a	variety	of	instrument	types	in connection	with	their	market-making	and	related	risk-management	activities; accordingly,	the	trading	revenue	presented	in	the	table	below	is	not representative	of	the	total	revenue	of	any	individual	line	of	business.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Trading\trevenue\tby\tinstrument\ttype |  |  |  |
| Interest\trate | $1,933 | $1,362 | $284 |
| Credit | 1,735 | 1,880 | 2,654 |
| Foreign\texchange | 2,557 | 1,556 | 1,801 |
| Equity | 2,990 | 2,563 | 2,517 |
| Commodity(a) | 842 | 1,663 | 2,083 |
| Total\ttrading\trevenue | 10,057 | 9,024 | 9,339 |
| Private\tequity\tgains(b) | 351 | 1,507 | 802 |
| Principal\ttransactions | $10,408 | $10,531 | $10,141 |

(a) Commodity	derivatives	are	frequently	used	to	manage	the	Firm's	risk	exposure	to	its	physical commodities	inventories.	For	gains/(losses)	related	to	commodity	fair	value	hedges,	see	Note	6.

(b) Includes	revenue	on	private	equity	investments	held	in	the	Private	Equity	business	within	Corporate, as	well	as	those	held	in	other	business	segments.

# Lending-	and	deposit-related	fees

This	revenue	category	includes	fees	from	loan	commitments,	standby	letters	of credit,	financial	guarantees,	deposit-related	fees	in	lieu	of	compensating balances,	cash	management-related	activities	or	transactions,	deposit	accounts and	other	loan-servicing	activities.	These	fees	are	recognized	over	the	period	in which	the	related	service	is	provided.

# Asset	management,	administration	and	commissions

This	revenue	category	includes	fees	from	investment	management	and	related services,	custody,	brokerage	services,	insurance	premiums	and	commissions,	and other	products.	These	fees	are	recognized	over	the	period	in	which	the	related service	is	provided.	Performance-based	fees,	which	are	earned	based	on exceeding	certain	benchmarks	or	other	performance	targets,	are	accrued	and recognized	at	the	end	of	the	performance	period	in	which	the	target	is	met.	The Firm	has	contractual	arrangements	with	third	parties	to	provide	certain	services in	connection	with	its	asset	management	activities.	Amounts	paid	to	third-

party	service	providers	are	predominantly	expensed,	such	that	asset	management fees	are	recorded	gross	of	payments	made	to	third	parties.

The	following	table	presents	Firmwide	asset	management,	administration	and commissions.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Asset\tmanagement\tfees |  |  |  |
| Investment\tmanagement\tfees(a) | $9,403 | $9,169 | $8,044 |
| All\tother\tasset\tmanagement\tfees(b) | 352 | 477 | 505 |
| Total\tasset\tmanagement\tfees | 9,755 | 9,646 | 8,549 |
| Total\tadministration\tfees(c) | 2,015 | 2,179 | 2,101 |
| Commissions\tand\tother\tfees |  |  |  |
| Brokerage\tcommissions | 2,304 | 2,270 | 2,321 |
| All\tother\tcommissions\tand\tfees | 1,435 | 1,836 | 2,135 |
| Total\tcommissions\tand\tfees | 3,739 | 4,106 | 4,456 |
| Total\tasset\tmanagement,\tadministration\nand\tcommissions | $15,509 | $15,931 | $15,106 |

(a) Represents	fees	earned	from	managing	assets	on	behalf	of	the	Firm's	clients,	including	investors	in Firm-sponsored	funds	and	owners	of	separately	managed	investment	accounts.

(b) Represents	fees	for	services	that	are	ancillary	to	investment	management	services,	such	as commissions	earned	on	the	sales	or	distribution	of	mutual	funds	to	clients.

(c) Predominantly	includes	fees	for	custody,	securities	lending,	funds	services	and	securities	clearance.

# Mortgage	fees	and	related	income

This	revenue	category	primarily	reflects	CCB's	Mortgage	Banking	production and	servicing	revenue,	including	fees	and	income	derived	from	mortgages originated	with	the	intent	to	sell;	mortgage	sales	and	servicing	including	losses related	to	the	repurchase	of	previously	sold	loans;	the	impact	of	risk-management activities	associated	with	the	mortgage	pipeline,	warehouse	loans	and	MSRs;	and revenue	related	to	any	residual	interests	held	from	mortgage	securitizations.	This revenue	category	also	includes	gains	and	losses	on	sales	and	lower	of	cost	or	fair value	adjustments	for	mortgage	loans	held-for-sale,	as	well	as	changes	in	fair value	for	mortgage	loans	originated	with	the	intent	to	sell	and	measured	at	fair value	under	the	fair	value	option.	Changes	in	the	fair	value	of	CCB	MSRs	are reported	in	mortgage	fees	and	related	income.	Net	interest	income	from mortgage	loans	is	recorded	in	interest	income.	For	a	further	discussion	of	MSRs, see	Note	17.

# Card	income

This	revenue	category	includes	interchange	income	from	credit	and	debit	cards and	net	fees	earned	from	processing	credit	card	transactions	for	merchants.	Card income	is	recognized	as	earned.	Cost	related	to	rewards	programs	is	recorded when	the	rewards	are	earned	by	the	customer	and	presented	as	a	reduction	to interchange	income.	Annual	fees	and	direct	loan	origination	costs	are	deferred and	recognized	on	a	straight-line	basis	over	a	12-month	period.

# Credit	card	revenue	sharing	agreements

The	Firm	has	contractual	agreements	with	numerous	co-brand	partners	and affinity	organizations	(collectively,	"partners"),	which	grant	the	Firm	exclusive rights	to	market	to	the	customers	or	members	of	such	partners.	These	partners endorse	the	credit	card	programs	and	provide	their	customer	and	member	lists	to the	Firm,	and	they	may	also	conduct	marketing	activities	and	provide	awards under	the	various	credit	card	programs.	The	terms	of	these	agreements	generally range	from	three	to	ten	years.

The	Firm	typically	makes	incentive	payments	to	the	partners	based	on	new account	originations,	sales	volumes	and	the	cost	of	the	partners'	marketing activities	and	awards.	Payments	based	on	new	account	originations	are accounted	for	as	direct	loan	origination	costs.	Payments	to	partners	based	on sales	volumes	are	deducted	from	interchange	income	as	the	related	revenue	is earned.	Payments	based	on	marketing	efforts	undertaken	by	the	partners	are expensed	by	the	Firm	as	incurred	and	reported	as	noninterest	expense.

# Other	income

Other	income	on	the	Firm's	Consolidated	statements	of	income	included	the following:

# Note	8	–	Interest	income	and	Interest	expense

Interest	income	and	interest	expense	are	recorded	in	the	Consolidated	statements of	income	and	classified	based	on	the	nature	of	the	underlying	asset	or	liability. Interest	income	and	interest	expense	includes	the	current-period	interest	accruals for	financial	instruments	measured	at	fair	value,	except	for	financial	instruments containing	embedded	derivatives	that	would	be	separately	accounted	for	in accordance	with	U.S.	GAAP	absent	the	fair	value	option	election;	for	those instruments,	all	changes	in	fair	value,	including	any	interest	elements,	are reported	in	principal	transactions	revenue.	For	financial	instruments	that	are	not measured	at	fair	value,	the	related	interest	is	included	within	interest	income	or interest	expense,	as	applicable.

Details	of	interest	income	and	interest	expense	were	as	follows.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Interest\tIncome |  |  |  |
| Loans | $33,134 | $32,218 | $33,489 |
| \tTaxable\tsecurities | 6,550 | 7,617 | 6,916 |
| \tNon\ttaxable\tsecurities(a) | 1,706 | 1,423 | 896 |
| Total\tsecurities | 8,256 | 9,040 | 7,812 |
| Trading\tassets | 6,621 | 7,312 | 8,099 |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\nunder\tresale\tagreements | 1,592 | 1,642 | 1,940 |
| Securities\tborrowed(b) | (532) | (501) | (127) |
| Deposits\twith\tbanks | 1,250 | 1,157 | 918 |
| Other\tassets(c) | 652 | 663 | 538 |
| Total\tinterest\tincome | $50,973 | $51,531 | $52,669 |
| Interest\texpense |  |  |  |
| Interest\tbearing\tdeposits | $1,252 | $1,633 | $2,067 |
| Federal\tfunds\tpurchased\tand\tsecurities |  |  |  |
| loaned\tor\tsold\tunder\trepurchase |  |  |  |
| agreements | 609 | 604 | 582 |
| Commercial\tpaper | 110 | 134 | 112 |
| Trading\tliabilities\t-\tdebt,\tshort-term\tand\nother\tliabilities | 622 | 712 | 1,104 |
| Long-term\tdebt | 4,435 | 4,409 | 5,007 |
| Beneficial\tinterest\tissued\tby\tconsolidated\nVIEs | 435 | 405 | 478 |
| Total\tinterest\texpense | $7,463 | $7,897 | $9,350 |
| Net\tinterest\tincome | $43,510 | $43,634 | $43,319 |
| Provision\tfor\tcredit\tlosses | 3,827 | 3,139 | 225 |
| Net\tinterest\tincome\tafter\tprovision\tfor\ncredit\tlosses | $39,683 | $40,495 | $43,094 |

(a) Represents	securities	which	are	tax	exempt	for	U.S.	federal	income	tax	purposes. (b) Negative	interest	income	for	the	years	ended	December	31,	2015,	2014	and	2013,	is	a result	of	increased	client-driven	demand	for	certain	securities	combined	with	the	impact	of low	interest	rates;	this	is	matched	book	activity	and	the	negative	interest	expense	on	the corresponding	securities	loaned	is	recognized	in	interest	expense. (c) Largely	margin	loans.

(d) Includes	brokerage	customer	payables.

# Note	9	–	Pension	and	other	postretirement	employee	benefit plans

The	Firm	has	various	defined	benefit	pension	plans	and	other	postretirement employee	benefit	("OPEB")	plans	that	provide	benefits	to	its	employees.	These plans	are	discussed	below.

# Defined	benefit	pension	plans

The	Firm	has	a	qualified	noncontributory	U.S.	defined	benefit	pension	plan	that provides	benefits	to	substantially	all	U.S.	employees.	The	U.S.	plan	employs	a cash	balance	formula	in	the	form	of	pay	and	interest	credits	to	determine	the benefits	to	be	provided	at	retirement,	based	on	years	of	service	and	eligible compensation	(generally	base	salary/regular	pay	and	variable	incentive compensation	capped	at	$100,000	annually).	Employees	begin	to	accrue	plan benefits	after	completing	one	year	of	service,	and	benefits	generally	vest	after three	years	of	service.	The	Firm	also	offers	benefits	through	defined	benefit pension	plans	to	qualifying	employees	in	certain	non-U.S.	locations	based	on factors	such	as	eligible	compensation,	age	and/or	years	of	service.

It	is	the	Firm's	policy	to	fund	the	pension	plans	in	amounts	sufficient	to	meet	the requirements	under	applicable	laws.	The	Firm	does	not	anticipate	at	this	time any	contribution	to	the	U.S.	defined	benefit	pension	plan	in	2016.	The	2016 contributions	to	the	non-U.S.	defined	benefit	pension	plans	are	expected	to	be $47	million	of	which	$31	million	are	contractually	required.

JPMorgan	Chase	also	has	a	number	of	defined	benefit	pension	plans	that	are	not subject	to	Title	IV	of	the	Employee	Retirement	Income	Security	Act.	The	most significant	of	these	plans	is	the	Excess	Retirement	Plan,	pursuant	to	which certain	employees	previously	earned	pay	credits	on	compensation	amounts	above the	maximum	stipulated	by	law	under	a	qualified	plan;	no	further	pay	credits	are allocated	under	this	plan.	The	Excess	Retirement	Plan	had	an	unfunded	projected benefit	obligation	("PBO")	in	the	amount	of	$237	million	and	$257	million,	at December	31,	2015	and	2014,	respectively.

# Defined	contribution	plans

JPMorgan	Chase	currently	provides	two	qualified	defined	contribution	plans	in the	U.S.	and	other	similar	arrangements	in	certain	non-U.S.	locations,	all	of which	are	administered	in	accordance	with	applicable	local	laws	and	regulations. The	most	significant	of	these	plans	is	the	JPMorgan	Chase	401(k)	Savings	Plan (the	"401(k)	Savings	Plan"),	which	covers	substantially	all	U.S.	employees. Employees	can	contribute	to	the	401(k)	Savings	Plan	on	a	pretax	and/or	Roth 401(k)	after-tax	basis.	The	JPMorgan	Chase	Common	Stock	Fund,	which	is	an investment	option	under	the	401(k)	Savings	Plan,	is	a	nonleveraged	employee stock	ownership	plan.

The	Firm	matches	eligible	employee	contributions	up	to	5%	of	eligible compensation	(generally	base	salary/regular	pay	and	variable	incentive compensation)	on	an	annual	basis.

Employees	begin	to	receive	matching	contributions	after	completing	a	one-year- of-service	requirement.	Employees	with	total	annual	cash	compensation	of $250,000	or	more	are	not	eligible	for	matching	contributions.	Matching contributions	vest	after	three	years	of	service.	The	401(k)	Savings	Plan	also permits	discretionary	profit-sharing	contributions	by	participating	companies	for certain	employees,	subject	to	a	specified	vesting	schedule.

# OPEB	plans

JPMorgan	Chase	offers	postretirement	medical	and	life	insurance	benefits	to certain	retirees	and	postretirement	medical	benefits	to	qualifying	U.S.	employees. These	benefits	vary	with	the	length	of	service	and	the	date	of	hire	and	provide	for limits	on	the	Firm's	share	of	covered	medical	benefits.	The	medical	and	life insurance	benefits	are	both	contributory.	Effective	January	1,	2015,	there	was

a	transition	of	certain	Medicare	eligible	retirees	from	JPMC	group	sponsored coverage	to	Medicare	exchanges.	As	a	result	of	this	change,	eligible	retirees	will receive	a	Healthcare	Reimbursement	Account	amount	each	year	if	they	enroll through	the	Medicare	exchange.	The	impact	of	this	change	was	not	material. Postretirement	medical	benefits	also	are	offered	to	qualifying	United	Kingdom ("U.K.")	employees.

JPMorgan	Chase's	U.S.	OPEB	obligation	is	funded	with	corporate-owned	life insurance	("COLI")	purchased	on	the	lives	of	eligible	employees	and	retirees. While	the	Firm	owns	the	COLI	policies,	COLI	proceeds	(death	benefits, withdrawals	and	other	distributions)	may	be	used	only	to	reimburse	the	Firm	for its	net	postretirement	benefit	claim	payments	and	related	administrative	expense. The	U.K.	OPEB	plan	is	unfunded.

The	following	table	presents	the	changes	in	benefit	obligations,	plan	assets	and	funded	status	amounts	reported	on	the	Consolidated	balance	sheets	for	the	Firm's	U.S. and	non-U.S.	defined	benefit	pension	and	OPEB	plans.

| As	of	or	for	the	year	ended	December	31, | U.S. |  |  | Non-U.S. |  | OPEB	plans(d) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | 2014 |  | 2015 | 2014 | 2015 | 2014 |
| Change\tin\tbenefit\tobligation |  |  |  |  |  |  |  |
| Benefit\tobligation,\tbeginning\tof\tyear | $(12,536) | $(10,776) |  | $(3,640) | $(3,433) | $(842) | $(826) |
| Benefits\tearned\tduring\tthe\tyear | (340) | (281) |  | (37) | (33) | (1) | — |
| Interest\tcost\ton\tbenefit\tobligations | (498) | (534) |  | (112) | (137) | (31) | (38) |
| Plan\tamendments | — | (53) |  | — | — | — | — |
| Special\ttermination\tbenefits | — | — |  | (1) | (1) | — | — |
| Curtailments | — | — |  | — | — | — | (3) |
| Employee\tcontributions | NA | NA |  | (7) | (7) | (25) | (62) |
| Net\tgain/(loss) | 702 | (1,669) |  | 146 | (408) | 71 | (58) |
| Benefits\tpaid | 760 | 777 |  | 120 | 119 | 88 | 145 |
| Expected\tMedicare\tPart\tD\tsubsidy\treceipts | NA | NA |  | NA | NA | (6) | (2) |
| Foreign\texchange\timpact\tand\tother | — | — |  | 184 | 260 | 2 | 2 |
| Benefit\tobligation,\tend\tof\tyear | $(11,912) | $(12,536) |  | $(3,347) | $(3,640) | $(744) | $(842) |
| Change\tin\tplan\tassets |  |  |  |  |  |  |  |
| Fair\tvalue\tof\tplan\tassets,\tbeginning\tof\tyear | $14,623 | $14,354 |  | $3,718 | $3,532 | $1,903 | $1,757 |
| Actual\treturn\ton\tplan\tassets | 231 | 1,010 |  | 52 | 518 | 13 | 159 |
| Firm\tcontributions | 31 | 36 |  | 45 | 46 | 2 | 3 |
| Employee\tcontributions | — | — |  | 7 | 7 | — | — |
| Benefits\tpaid | (760) | (777) |  | (120) | (119) | (63) | (16) |
| Foreign\texchange\timpact\tand\tother | — | — |  | (191) | (266) | — | — |
| Fair\tvalue\tof\tplan\tassets,\tend\tof\tyear | $14,125 | $14,623 | (b)(c) | $3,511 | $3,718 | $1,855 | $1,903 |
| Net\tfunded\tstatus(a) | $2,213 | $2,087 |  | $164 | $78 | $1,111 | $1,061 |
| Accumulated\tbenefit\tobligation,\tend\tof\tyear | $(11,774) | $(12,375) |  | $(3,322) | $(3,615) | NA | NA |
| (a) | Represents\tplans\twith\tan\taggregate\toverfunded\tbalance\tof\t $4.1\tbillion\tand\t$3.9\tbillion\tat\tDecember\t31,\t2015\tand\t2014,\trespectively,\tand\tplans\twith\tan\taggregate\tunderfunded\tbalance\tof | Represents\tplans\twith\tan\taggregate\toverfunded\tbalance\tof\t $4.1\tbillion\tand\t$3.9\tbillion\tat\tDecember\t31,\t2015\tand\t2014,\trespectively,\tand\tplans\twith\tan\taggregate\tunderfunded\tbalance\tof | Represents\tplans\twith\tan\taggregate\toverfunded\tbalance\tof\t $4.1\tbillion\tand\t$3.9\tbillion\tat\tDecember\t31,\t2015\tand\t2014,\trespectively,\tand\tplans\twith\tan\taggregate\tunderfunded\tbalance\tof | Represents\tplans\twith\tan\taggregate\toverfunded\tbalance\tof\t $4.1\tbillion\tand\t$3.9\tbillion\tat\tDecember\t31,\t2015\tand\t2014,\trespectively,\tand\tplans\twith\tan\taggregate\tunderfunded\tbalance\tof | Represents\tplans\twith\tan\taggregate\toverfunded\tbalance\tof\t $4.1\tbillion\tand\t$3.9\tbillion\tat\tDecember\t31,\t2015\tand\t2014,\trespectively,\tand\tplans\twith\tan\taggregate\tunderfunded\tbalance\tof | Represents\tplans\twith\tan\taggregate\toverfunded\tbalance\tof\t $4.1\tbillion\tand\t$3.9\tbillion\tat\tDecember\t31,\t2015\tand\t2014,\trespectively,\tand\tplans\twith\tan\taggregate\tunderfunded\tbalance\tof | $636 |

(a) Represents	plans	with	an	aggregate	overfunded	balance	of	 $4.1	billion	and	$3.9	billion	at	December	31,	2015	and	2014,	respectively,	and	plans	with	an	aggregate	underfunded	balance	of $636 million	and	$708	million	at	December	31,	2015	and	2014,	respectively.

(b) At	December	31,	2015	and	2014,	approximately	$533	million	and	$336	million,	respectively,	of	U.S.	plan	assets	included	participation	rights	under	participating	annuity	contracts.

(c) At	December	31,	2015	and	2014,	defined	benefit	pension	plan	amounts	not	measured	at	fair	value	included	 $74	million	and	$106	million,	respectively,	of	accrued	receivables,	and	$123	million and	$257	million,	respectively,	of	accrued	liabilities,	for	U.S.	plans.

(d) Includes	an	unfunded	accumulated	postretirement	benefit	obligation	of	 $32	million	and	$37	million	at	December	31,	2015	and	2014,	respectively,	for	the	U.K.	plan.

For	the	Firm's	defined	benefit	pension	plans,	fair	value	is	used	to	determine	the expected	return	on	plan	assets.	Amortization	of	net	gains	and	losses	is	included in	annual	net	periodic	benefit	cost	if,	as	of	the	beginning	of	the	year,	the	net	gain or	loss	exceeds	10%	of	the	greater	of	the	PBO	or	the	fair	value	of	the	plan	assets. Any	excess	is	amortized	over	the	average	future	service	period	of	defined	benefit pension	plan	participants,	which	for	the	U.S.	defined	benefit	pension	plan	is currently	seven	years	and	for	the	non-U.S.	defined	benefit	pension	plans	is	the period	appropriate	for	the	affected	plan.	In	addition,	prior	service	costs	are amortized	over	the	average	remaining	service	period	of	active	employees expected	to	receive	benefits	under	the	plan	when	the	prior	service	cost	is	first recognized.

For	the	Firm's	OPEB	plans,	a	calculated	value	that	recognizes	changes	in	fair value	over	a	five-year	period	is	used	to	determine	the	expected	return	on	plan assets.	This	value	is	referred	to	as	the	market	related	value	of	assets. Amortization	of	net	gains	and	losses,	adjusted	for	gains	and	losses	not	yet recognized,	is	included	in	annual	net	periodic	benefit	cost	if,	as	of	the	beginning of	the	year,	the	net	gain	or	loss	exceeds	10%	of	the	greater	of	the	accumulated postretirement	benefit	obligation	or	the	market	related	value	of	assets.	Any excess	net	gain	or	loss	is	amortized	over	the	average	expected	lifetime	of	retired participants,	which	is	currently	thirteen	years;	however,	prior	service	costs resulting	from	plan	changes	are	amortized	over	the	average	years	of	service remaining	to	full	eligibility	age,	which	is	currently	two	years.

The	average	remaining	amortization	period	for	the	U.S.	defined	benefit	pension plan	for	current	prior	service	costs	is	four	years.

The	following	table	presents	pretax	pension	and	OPEB	amounts	recorded	in	AOCI.

| December	31, |  | U.S. | Non-U.S. | Non-U.S. | OPEB	plans | OPEB	plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Net\tgain/(loss) | $(3,096) | $(3,346) | $(513) | $(628) | $109 | $130 |
| Prior\tservice\tcredit/(cost) | 68 | 102 | 9 | 11 | — | — |
| Accumulated\tother\tcomprehensive\tincome/(loss),\tpretax,\tend\tof\tyear | $(3,028) | $(3,244) | $(504) | $(617) | $109 | $130 |

The	following	table	presents	the	components	of	net	periodic	benefit	costs	reported	in	the	Consolidated	statements	of	income	and	other	comprehensive	income	for	the Firm's	U.S.	and	non-U.S.	defined	benefit	pension,	defined	contribution	and	OPEB	plans.

|  |  | U.S. |  |  |  | Non-U.S. |  |  |  |  | OPEB	plans |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t(in\tmillions) | 2015 | 2014 | 2013 | 2015 |  | 2014 |  | 2013 |  | 2015 | 2014 | 2013 |
| Components\tof\tnet\tperiodic\tbenefit\tcost |  |  |  |  |  |  |  |  |  |  |  |  |
| Benefits\tearned\tduring\tthe\tyear | $340 | $281 | $314 | $37 |  | $33 |  | $34 |  | $1 | $— | $1 |
| Interest\tcost\ton\tbenefit\tobligations | 498 | 534 | 447 | 112 |  | 137 |  | 125 |  | 31 | 38 | 35 |
| Expected\treturn\ton\tplan\tassets | (929) | (985) | (956) | (150) |  | (172) |  | (142) |  | (106) | (101) | (92) |
| Amortization: |  |  |  |  |  |  |  |  |  |  |  |  |
| Net\t(gain)/loss | 247 | 25 | 271 | 35 |  | 47 |  | 49 |  | — | — | 1 |
| Prior\tservice\tcost/(credit) | (34) | (41) | (41) | (2) |  | (2) |  | (2) |  | — | (1) | — |
| Special\ttermination\tbenefits | — | — | — | 1 |  | — |  | — |  | — | — | — |
| Net\tperiodic\tdefined\tbenefit\tcost | 122 | (186) | 35 | 33 |  | 43 |  | 64 |  | (74) | (64) | (55) |
| Other\tdefined\tbenefit\tpension\tplans(a) | 14 | 14 | 15 | 10 |  | 6 |  | 14 |  | NA | NA | NA |
| Total\tdefined\tbenefit\tplans | 136 | (172) | 50 | 43 |  | 49 |  | 78 |  | (74) | (64) | (55) |
| Total\tdefined\tcontribution\tplans | 449 | 438 | 447 | 320 |  | 329 |  | 321 |  | NA | NA | NA |
| Total\tpension\tand\tOPEB\tcost\tincluded\tin\tcompensation\texpense | $585 | $266 | $497 | $363 |  | $378 |  | $399 |  | $(74) | $(64) | $(55) |
| Changes\tin\tplan\tassets\tand\tbenefit\tobligations\trecognized\tin\nother\tcomprehensive\tincome |  |  |  |  |  |  |  |  |  |  |  |  |
| Net\t(gain)/loss\tarising\tduring\tthe\tyear | $(3) | $1,645 | $(1,817) | $(47) |  | $57 |  | $19 |  | $21 | $(5) | $(257) |
| Prior\tservice\tcredit\tarising\tduring\tthe\tyear | — | 53 | — | — |  | — |  | — |  | — | — | — |
| Amortization\tof\tnet\tloss | (247) | (25) | (271) | (35) |  | (47) |  | (49) |  | — | — | (1) |
| Amortization\tof\tprior\tservice\t(cost)/credit | 34 | 41 | 41 | 2 |  | 2 |  | 2 |  | — | 1 | — |
| Foreign\texchange\timpact\tand\tother | — | — | — | (33) | (a) | (39) | (a) | 14 | (a) | — | — | — |
| Total\trecognized\tin\tother\tcomprehensive\tincome | $(216) | $1,714 | $(2,047) | $(113) |  | $(27) |  | $(14) |  | $21 | $(4) | $(258) |
| Total\trecognized\tin\tnet\tperiodic\tbenefit\tcost\tand\tother\ncomprehensive\tincome | $(94) | $1,528 | $(2,012) | $(80) |  | $16 |  | $50 |  | $(53) | $(68) | $(313) |
| (a)\nIncludes\tvarious\tdefined\tbenefit\tpension\tplans\twhich\tare\tindividually\timmaterial.\nJPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport | (a)\nIncludes\tvarious\tdefined\tbenefit\tpension\tplans\twhich\tare\tindividually\timmaterial.\nJPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  |  |  |  |  |  |  | 225 |

The	estimated	pretax	amounts	that	will	be	amortized	from	AOCI	into	net	periodic	benefit	cost	in	2016	are	as	follows.

|  | Defined	benefit	pension	plans |  | OPEB	plans | OPEB	plans |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | U.S. | Non-U.S. | U.S. | Non-U.S. |
| Net\tloss/(gain) | $231 | $23 | $— | $— |
| Prior\tservice\tcost/(credit) | (34) | (2) | — | — |
| Total | $197 | $21 | $— | $— |

The	following	table	presents	the	actual	rate	of	return	on	plan	assets	for	the	U.S.	and	non-U.S.	defined	benefit	pension	and	OPEB	plans.

|  |  | U.S. |  |  | Non-U.S. |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31, | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 |
| Actual\trate\tof\treturn: |  |  |  |  |  |  |
| Defined\tbenefit\tpension\tplans | 0.88% | 7.29% | 15.95% | (0.48)\t–\t4.92% | 5.62\t–\t17.69% | 3.74\t–\t23.80% |
| OPEB\tplans | 1.16 | 9.84 | 13.88 | NA | NA | NA |

# Plan	assumptions

JPMorgan	Chase's	expected	long-term	rate	of	return	for	U.S.	defined	benefit pension	and	OPEB	plan	assets	is	a	blended	average	of	the	investment	advisor's projected	long-term

(10	years	or	more)	returns	for	the	various	asset	classes,	weighted	by	the	asset allocation.	Returns	on	asset	classes	are	developed	using	a	forward-looking approach	and	are	not	strictly	based	on	historical	returns.	Equity	returns	are generally	developed	as	the	sum	of	inflation,	expected	real	earnings	growth	and expected	long-term	dividend	yield.	Bond	returns	are	generally	developed	as	the sum	of	inflation,	real	bond	yield	and	risk	spread	(as	appropriate),	adjusted	for	the expected	effect	on	returns	from	changing	yields.	Other	asset-class	returns	are derived	from	their	relationship	to	the	equity	and	bond	markets.	Consideration	is also	given	to	current	market	conditions	and	the	short-term	portfolio	mix	of	each plan.

For	the	U.K.	defined	benefit	pension	plans,	which	represent	the	most	significant of	the	non-U.S.	defined	benefit	pension	plans,	procedures	similar	to	those	in	the U.S.	are	used	to	develop	the	expected	long-term	rate	of	return	on	plan	assets, taking	into	consideration	local	market	conditions	and	the	specific	allocation	of plan	assets.	The	expected	long-term	rate	of	return	on	U.K.	plan	assets	is	an average	of	projected	long-term	returns	for	each	asset	class.	The	return	on	equities has	been	selected	by	reference	to	the	yield	on	long-term	U.K.	government	bonds plus	an	equity	risk	premium	above	the	risk-free	rate.	The	expected	return	on "AA"	rated	long-term	corporate	bonds	is	based	on	an	implied	yield	for	similar bonds.

The	discount	rate	used	in	determining	the	benefit	obligation	under	the	U.S. defined	benefit	pension	and	OPEB	plans	was	provided	by	our	actuaries.	This	rate was	selected	by	reference	to	the	yields	on	portfolios	of	bonds	with	maturity	dates and	coupons	that	closely	match	each	of	the	plan's	projected	cash	flows;	such portfolios	are	derived	from	a	broad-based	universe	of	high-quality	corporate bonds	as	of	the	measurement	date.	In	years	in	which	these	hypothetical	bond portfolios	generate	excess	cash,	such	excess	is	assumed	to	be	reinvested	at	the one-year	forward	rates

implied	by	the	Citigroup	Pension	Discount	Curve	published	as	of	the measurement	date.	The	discount	rate	for	the	U.K.	defined	benefit	pension	plan represents	a	rate	of	appropriate	duration	from	the	analysis	of	yield	curves provided	by	our	actuaries.

In	2014,	the	Society	of	Actuaries	("SOA")	completed	a	comprehensive	review	of mortality	experience	of	uninsured	private	retirement	plans	in	the	U.S.	In	October 2014,	the	SOA	published	new	mortality	tables	and	a	new	mortality	improvement scale	that	reflects	improved	life	expectancies	and	an	expectation	that	this	trend will	continue.	In	2014,	the	Firm	adopted	the	SOA's	tables	and	projection	scale, resulting	in	an	estimated	increase	in	PBO	of	$533	million.	In	2015,	the	SOA updated	the	projection	scale	to	reflect	two	additional	years	of	historical	data.	The Firm	has	adopted	the	updated	projection	scale	resulting	in	an	estimated	decrease in	PBO	in	2015	of	$112	million.

At	December	31,	2015,	the	Firm	increased	the	discount	rates	used	to	determine its	benefit	obligations	for	the	U.S.	defined	benefit	pension	and	OPEB	plans	in light	of	current	market	interest	rates,	which	will	result	in	a	decrease	in	expense	of approximately	$63	million	for	2016.	The	2016	expected	long-term	rate	of	return on	U.S.	defined	benefit	pension	plan	assets	and	U.S.	OPEB	plan	assets	are 6.50%	and	5.75%,	respectively.	For	2016,	the	initial	health	care	benefit obligation	trend	assumption	has	been	set	at	5.50%,	and	the	ultimate	health	care trend	assumption	and	the	year	to	reach	the	ultimate	rate	remains	at	5.00%	and 2017,	respectively,	unchanged	from	2015.	As	of	December	31,	2015,	the	interest crediting	rate	assumption	and	the	assumed	rate	of	compensation	increase remained	at	5.00%	and	3.50%,	respectively.

The	following	tables	present	the	weighted-average	annualized	actuarial assumptions	for	the	projected	and	accumulated	postretirement	benefit obligations,	and	the	components	of	net	periodic	benefit	costs,	for	the	Firm's significant	U.S.	and	non-U.S.	defined	benefit	pension	and	OPEB	plans,	as	of	and for	the	periods	indicated.

# Weighted-average	assumptions	used	to	determine	benefit	obligations

The	following	table	presents	the	effect	of	a	one-percentage-point	change	in	the assumed	health	care	cost	trend	rate	on	JPMorgan	Chase's	accumulated postretirement	benefit	obligation.	As	of	December	31,	2015,	there	was	no material	effect	on	total	service	and	interest	cost.

JPMorgan	Chase's	U.S.	defined	benefit	pension	and	OPEB	plan	expense	is sensitive	to	the	expected	long-term	rate	of	return	on	plan	assets	and	the	discount rate.	With	all	other	assumptions	held	constant,	a	25-basis	point	decline	in	the expected	long-term	rate	of	return	on	U.S.	plan	assets	would	result	in	an aggregate	increase	of	approximately	$39	million	in	2016	U.S.	defined	benefit pension	and	OPEB	plan	expense.	A	25-basis	point	decline	in	the	discount	rate	for the	U.S.	plans	would	result	in	an	increase	in	2016	U.S.	defined	benefit	pension and	OPEB	plan	expense	of	approximately	an	aggregate	$31	million	and	an increase	in	the	related	benefit	obligations	of	approximately	an	aggregate	$296 million.	A	25-basis	point	decrease	in	the	interest	crediting	rate	for	the	U.S. defined	benefit	pension	plan	would	result	in	a	decrease	in	2016	U.S.	defined benefit	pension	expense	of	approximately	$35	million	and	a	decrease	in	the related	PBO	of	approximately	$145	million.	A	25-basis	point	decline	in	the discount	rates	for	the	non-U.S.	plans	would	result	in	an	increase	in	the	2016	non- U.S.	defined	benefit	pension	plan	expense	of	approximately	$17	million.

# Investment	strategy	and	asset	allocation

The	Firm's	U.S.	defined	benefit	pension	plan	assets	are	held	in	trust	and	are invested	in	a	well-diversified	portfolio	of	equity	and	fixed	income	securities, cash	and	cash	equivalents,	and	alternative	investments	(e.g.,	hedge	funds,	private equity,	real	estate	and	real	assets).	Non-U.S.	defined	benefit	pension	plan	assets are	held	in	various	trusts	and	are	also	invested	in	well-diversified	portfolios	of equity,	fixed	income	and	other	securities.	Assets	of	the	Firm's	COLI	policies, which	are	used	to	partially	fund	the	U.S.	OPEB	plan,	are	held	in	separate accounts	of	an	insurance	company	and	are	allocated	to	investments	intended	to replicate	equity	and	fixed	income	indices.

The	investment	policy	for	the	Firm's	U.S.	defined	benefit	pension	plan	assets	is to	optimize	the	risk-return	relationship	as	appropriate	to	the	needs	and	goals	of the	plan	using	a	global	portfolio	of	various	asset	classes	diversified	by	market segment,	economic	sector,	and	issuer.	Assets	are	managed	by	a	combination	of internal	and	external	investment	managers.	Periodically	the	Firm	performs	a comprehensive	analysis	on	the	U.S.	defined	benefit	pension	plan	asset allocations,	incorporating	projected	asset	and	liability	data,	which	focuses	on	the short-	and	long-term	impact	of	the	asset	allocation	on	cumulative	pension expense,	economic	cost,	present	value	of	contributions	and	funded	status.	As	the U.S.	defined	benefit	pension	plan	is	overfunded,	the	investment	strategy	for	this plan	was	adjusted	in	2013	to	provide	for	greater	liquidity.	Currently,	approved asset	allocation	ranges	are:	U.S.	equity	0%	to	45%,	international	equity	0%	to 40%,	debt	securities	0%	to	80%,	hedge	funds	0%	to	5%,	real	estate	0%	to	10%, real	assets	0%	to	10%	and	private	equity	0%	to	20%.	Asset	allocations	are	not managed	to	a	specific	target	but	seek	to	shift	asset	class	allocations	within	these stated	ranges.	Investment	strategies	incorporate	the	economic	outlook	and	the anticipated	implications	of	the	macroeconomic	environment	on	the	various	asset classes

while	maintaining	an	appropriate	level	of	liquidity	for	the	plan.	The	Firm regularly	reviews	the	asset	allocations	and	asset	managers,	as	well	as	other factors	that	impact	the	portfolio,	which	is	rebalanced	when	deemed	necessary.

For	the	U.K.	defined	benefit	pension	plans,	which	represent	the	most	significant of	the	non-U.S.	defined	benefit	pension	plans,	the	assets	are	invested	to maximize	returns	subject	to	an	appropriate	level	of	risk	relative	to	the	plans' liabilities.	In	order	to	reduce	the	volatility	in	returns	relative	to	the	plans'	liability profiles,	the	U.K.	defined	benefit	pension	plans'	largest	asset	allocations	are	to debt	securities	of	appropriate	durations.	Other	assets,	mainly	equity	securities, are	then	invested	for	capital	appreciation,	to	provide	long-term	investment growth.	Similar	to	the	U.S.	defined	benefit	pension	plan,	asset	allocations	and asset	managers	for	the	U.K.	plans	are	reviewed	regularly	and	the	portfolios	are rebalanced	when	deemed	necessary.

Investments	held	by	the	Plans	include	financial	instruments	which	are	exposed	to various	risks	such	as	interest	rate,	market	and	credit	risks.	Exposure	to	a concentration	of	credit	risk	is	mitigated	by	the	broad	diversification	of	both	U.S. and	non-U.S.	investment	instruments.	Additionally,	the	investments	in	each	of the	common/collective	trust	funds	and	registered	investment	companies	are further	diversified	into	various	financial	instruments.	As	of	December	31,	2015, assets	held	by	the	Firm's	U.S.	and	non-U.S.	defined	benefit	pension	and	OPEB plans	do	not	include	JPMorgan	Chase	common	stock,	except	through	indirect exposures	through	investments	in	third-party	stock-index	funds.	The	plans	hold investments	in	funds	that	are	sponsored	or	managed	by	affiliates	of	JPMorgan Chase	in	the	amount	of	$3.2	billion	and	$3.7	billion	for	U.S.	plans	and	$1.2 billion	and	$1.4	billion	for	non-U.S.	plans,	as	of	December	31,	2015	and	2014, respectively.

The	following	table	presents	the	weighted-average	asset	allocation	of	the	fair	values	of	total	plan	assets	at	December	31	for	the	years	indicated,	as	well	as	the	respective approved	range/target	allocation	by	asset	category,	for	the	Firm's	U.S.	and	non-U.S.	defined	benefit	pension	and	OPEB	plans.

|  |  | U.S. | U.S. |  | Non-U.S. | Non-U.S. |  | OPEB	plans(c) | OPEB	plans(c) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Target | %\tof\tplan\tassets |  | Target | %\tof\tplan\tassets |  | Target | %\tof\tplan\tassets |  |
| December\t31, | Allocation | 2015 | 2014 | Allocation | 2015 | 2014 | Allocation | 2015 | 2014 |
| Asset\tcategory |  |  |  |  |  |  |  |  |  |
| Debt\tsecurities(a) | 0-80% | 32% | 31% | 59% | 60% | 61% | 30-70% | 50% | 50% |
| Equity\tsecurities | 0-85 | 48 | 46 | 40 | 38 | 38 | 30-70 | 50 | 50 |
| Real\testate | 0-10 | 4 | 4 | — | 1 | — | — | — | — |
| Alternatives(b) | 0-35 | 16 | 19 | 1 | 1 | 1 | — | — | — |
| Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |

(a) Debt	securities	primarily	include	corporate	debt,	U.S.	federal,	state,	local	and	non-U.S.	government,	and	mortgage-backed	securities.

(b) Alternatives	primarily	include	limited	partnerships.

(c) Represents	the	U.S.	OPEB	plan	only,	as	the	U.K.	OPEB	plan	is	unfunded.

# Fair	value	measurement	of	the	plans'	assets	and	liabilities

For	information	on	fair	value	measurements,	including	descriptions	of	level	1,	2,	and	3	of	the	fair	value	hierarchy	and	the	valuation	methods	employed	by	the	Firm,	see Note	3.

# Pension	and	OPEB	plan	assets	and	liabilities	measured	at	fair	value

|  |  | U.S.	defined	benefit	pension	plans | U.S.	defined	benefit	pension	plans |  |  | Non-U.S.	defined	benefit	pension	plans (g) | Non-U.S.	defined	benefit	pension	plans (g) | Non-U.S.	defined	benefit	pension	plans (g) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2015 |  |  |  | Total\tfair |  |  |  |  |
| (in\tmillions) | Level\t1 | Level\t2 | Level\t3 | value |  | Level\t1 | Level\t2 | Total\tfair\tvalue |
| Cash\tand\tcash\tequivalents | $112 | $— | $— | $112 |  | $114 | $1 | $115 |
| Equity\tsecurities | 4,826 | 5 | 2 | 4,833 |  | 1,002 | 157 | 1,159 |
| Common/collective\ttrust\tfunds(a) | 339 | — | — | 339 |  | 135 | — | 135 |
| Limited\tpartnerships(b) | 53 | — | — | 53 |  | — | — | — |
| Corporate\tdebt\tsecurities(c) | — | 1,619 | 2 | 1,621 |  | — | 758 | 758 |
| U.S.\tfederal,\tstate,\tlocal\tand\tnon-U.S.\tgovernment\tdebt\tsecurities | 580 | 108 | — | 688 |  | 212 | 504 | 716 |
| Mortgage-backed\tsecurities | — | 67 | 1 | 68 |  | 2 | 26 | 28 |
| Derivative\treceivables | — | 104 | — | 104 |  | — | 209 | 209 |
| Other(d) | 1,760 | 27 | 534 | 2,321 |  | 257 | 53 | 310 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $7,670 | $1,930 | $539 | $10,139 | (e) | $1,722 | $1,708 | $3,430 |
| Derivative\tpayables | $— | $(35) | $— | $(35) |  | $— | $(153) | $(153) |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $— | $(35) | $— | $(35) | (f) | $— | $(153) | $(153) |

|  |  | U.S.	defined	benefit	pension	plans | U.S.	defined	benefit	pension	plans |  |  | Non-U.S.	defined	benefit	pension	plans (g) | Non-U.S.	defined	benefit	pension	plans (g) | Non-U.S.	defined	benefit	pension	plans (g) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2014\n(in\tmillions) | Level\t1 | Level\t2 | Level\t3 | Total\tfair\nvalue |  | Level\t1 | Level\t2 | Total\tfair\tvalue |
| Cash\tand\tcash\tequivalents | $87 | $— | $— | $87 |  | $128 | $1 | $129 |
| Equity\tsecurities | 5,286 | 20 | 4 | 5,310 |  | 1,019 | 169 | 1,188 |
| Common/collective\ttrust\tfunds(a) | 345 | — | — | 345 |  | 112 | — | 112 |
| Limited\tpartnerships(b) | 70 | — | — | 70 |  | — | — | — |
| Corporate\tdebt\tsecurities(c) | — | 1,454 | 9 | 1,463 |  | — | 724 | 724 |
| U.S.\tfederal,\tstate,\tlocal\tand\tnon-U.S.\tgovernment\tdebt\tsecurities | 446 | 161 | — | 607 |  | 235 | 540 | 775 |
| Mortgage-backed\tsecurities | 1 | 73 | 1 | 75 |  | 2 | 77 | 79 |
| Derivative\treceivables | — | 114 | — | 114 |  | — | 258 | 258 |
| Other(d) | 2,031 | 27 | 337 | 2,395 |  | 283 | 58 | 341 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $8,266 | $1,849 | $351 | $10,466 | (e) | $1,779 | $1,827 | $3,606 |
| Derivative\tpayables | $— | $(23) | $— | $(23) |  | $— | $(139) | $(139) |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $— | $(23) | $— | $(23) | (f) | $— | $(139) | $(139) |

Note:	Effective	April	1,	2015,	the	Firm	adopted	new	accounting	guidance	for	certain	investments	where	the	Firm	measures	fair	value	using	the	net	asset	value	per	share	(or	its	equivalent)	as	a	practical	expedient	and excluded	them	from	the	fair	value	hierarchy.	Accordingly,	such	investments	are	not	included	within	these	tables.	At	December	31,	2015	and	2014,	the	fair	values	of	these	investments,	which	include	certain	limited partnerships	and	common/collective	trust	funds,	were	$4.1	billion	and	$4.3	billion,	respectively,	of	U.S.	defined	benefit	pension	plan	investments,	and	 $234	million	and	$251	million,	respectively,	of	non-U.S.	defined benefit	pension	plan	investments.	Of	these	investments	$1.3	billion	and	$3.0	billion,	respectively,	of	U.S.	defined	benefit	pension	plan	investments	had	been	previously	classified	in	level	2	and	level	3,	respectively,	and $251	million	of	non-U.S.	defined	benefit	pension	plan	investments	had	been	previously	classified	in	level	2	at	December	31,	2014.	The	guidance	was	required	to	be	applied	retrospectively,	and	accordingly,	prior	period amounts	have	been	revised	to	conform	with	the	current	period	presentation.

(a) At	December	31,	2015	and	2014,	common/collective	trust	funds	primarily	included	a	mix	of	short-term	investment	funds,	domestic	and	international	equity	investments	(including	index)	and	real	estate	funds. (b) Unfunded	commitments	to	purchase	limited	partnership	investments	for	the	plans	were	 $895	million	and	$1.2	billion	for	2015	and	2014,	respectively.

(c) Corporate	debt	securities	include	debt	securities	of	U.S.	and	non-U.S.	corporations.

(d) Other	consists	of	money	markets	funds,	exchange-traded	funds	and	participating	and	non-participating	annuity	contracts.	Money	markets	funds	and	exchange-traded	funds	are	primarily	classified	within	level	1	of	the fair	value	hierarchy	given	they	are	valued	using	market	observable	prices.	Participating	and	non-participating	annuity	contracts	are	classified	within	level	3	of	the	fair	value	hierarchy	due	to	lack	of	market mechanisms	for	transferring	each	policy	and	surrender	restrictions.

(e) At	December	31,	2015	and	2014,	excluded	U.S.	defined	benefit	pension	plan	receivables	for	investments	sold	and	dividends	and	interest	receivables	of $74	million	and	$106	million,	respectively. (f) At	December	31,	2015	and	2014,	excluded	$106	million	and	$241	million,	respectively,	of	U.S.	defined	benefit	pension	plan	payables	for	investments	purchased;	and	 $17	million	and	$16	million,	respectively,	of other	liabilities.

(g) There	were	zero	assets	or	liabilities	classified	as	level	3	for	the	non-U.S.	defined	benefit	pension	plans	as	of	December	31,	2015	and	2014.

The	Firm's	U.S.	OPEB	plan	was	partially	funded	with	COLI	policies	of	$1.9	billion	at	both	December	31,	2015	and	2014,	which	were	classified	in	level	3	of	the valuation	hierarchy.

# Changes	in	level	3	fair	value	measurements	using	significant	unobservable	inputs

|  |  | Actual	return	on	plan	assets | Actual	return	on	plan	assets |  | Transfers	in |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2015 | Fair\tvalue, | Unrealized | Unrealized | Purchases,\tsales\tand | and/or\tout\tof\tlevel | Fair\tvalue, |
| (in\tmillions) | January\t1,\t2015 | Realized\tgains/(losses) | gains/(losses) | settlements,\tnet | 3 | December\t31,\t2015 |
| U.S.\tdefined\tbenefit\tpension\tplans |  |  |  |  |  |  |
| Equities | $4 | $— | $(2) | $— | $— | $2 |
| Corporate\tdebt\tsecurities | 9 | — | — | (7) | — | 2 |
| Mortgage-backed\tsecurities | 1 | — | — | — | — | 1 |
| Other | 337 | — | 197 | — | — | 534 |
| Total\tU.S.\tdefined\tbenefit\tpension\tplans | $351 | $— | $195 | $(7) | $— | $539 |
| OPEB\tplans |  |  |  |  |  |  |
| COLI | $1,903 | $— | $(48) | $— | $— | $1,855 |
| Total\tOPEB\tplans | $1,903 | $— | $(48) | $— | $— | $1,855 |

| Year	ended	December	31,	2014<br>(in	millions) | Fair	value,<br>January	1,	2014 | Actual	return	on	plan	assets<br>Realized	gains/(losses) | Unrealized<br>gains/(losses) | Purchases,	sales	and<br>settlements,	net | Transfers	in<br>and/or	out	of<br>level	3 | Fair	value,<br>December	31,	2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| U.S.\tdefined\tbenefit\tpension\tplans |  |  |  |  |  |  |
| Equities | $4 | $— | $— | $— | $— | $4 |
| Corporate\tdebt\tsecurities | 7 | (2) | 2 | 4 | (2) | 9 |
| Mortgage-backed\tsecurities | — | — | — | 1 | — | 1 |
| Other | 430 | — | (93) | — | — | 337 |
| Total\tU.S.\tdefined\tbenefit\tpension\tplans | $441 | $(2) | $(91) | $5 | $(2) | $351 |
| OPEB\tplans |  |  |  |  |  |  |
| COLI | $1,749 | $— | $154 | $— | $— | $1,903 |
| Total\tOPEB\tplans | $1,749 | $— | $154 | $— | $— | $1,903 |

|  |  | Actual	return	on	plan	assets | Actual	return	on	plan	assets |  | Transfers	in |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2013 | Fair\tvalue, | Unrealized | Unrealized | Purchases,\tsales\tand | and/or\tout\tof\tlevel | Fair\tvalue, |
| (in\tmillions) | January\t1,\t2013 | Realized\tgains/(losses) | gains/(losses) | settlements,\tnet | 3 | December\t31,\t2013 |
| U.S.\tdefined\tbenefit\tpension\tplans |  |  |  |  |  |  |
| Equities | $4 | $— | $— | $— | $— | $4 |
| Corporate\tdebt\tsecurities | 1 | — | — | — | 6 | 7 |
| Mortgage-backed\tsecurities | — | — | — | — | — | — |
| Other | 420 | — | 10 | — | — | 430 |
| Total\tU.S.\tdefined\tbenefit\tpension\tplans | $425 | $— | $10 | $— | $6 | $441 |
| OPEB\tplans |  |  |  |  |  |  |
| COLI | $1,554 | $— | $195 | $— | $— | $1,749 |
| Total\tOPEB\tplans | $1,554 | $— | $195 | $— | $— | $1,749 |

# Estimated	future	benefit	payments

The	following	table	presents	benefit	payments	expected	to	be	paid,	which	include	the	effect	of	expected	future	service,	for	the	years	indicated.	The	OPEB	medical	and life	insurance	payments	are	net	of	expected	retiree	contributions.

| Year	ended	December	31,<br>(in	millions) | U.S.	defined	benefit	pension<br>plans | Non-U.S.	defined	benefit<br>pension	plans | OPEB	before	Medicare	Part	D<br>subsidy | Medicare	Part	D	subsidy |
| :--- | :--- | :--- | :--- | :--- |
| 2016 | $762 | $107 | $68 | $1 |
| 2017 | 798 | 110 | 66 | 1 |
| 2018 | 927 | 119 | 63 | 1 |
| 2019 | 966 | 123 | 61 | 1 |
| 2020 | 1,009 | 129 | 59 | 1 |
| Years\t2021–2025 | 4,409 | 722 | 259 | 4 |

# Note	10	–	Employee	stock-based	incentives

# Employee	stock-based	awards

In	2015,	2014	and	2013,	JPMorgan	Chase	granted	long-term	stock-based	awards to	certain	employees	under	its	Long-Term	Incentive	Plan,	as	amended	and restated	effective	May	19,	2015	("LTIP").	Under	the	terms	of	the	LTIP,	as	of December	31,	2015,	93	million	shares	of	common	stock	were	available	for issuance	through	May	2019.	The	LTIP	is	the	only	active	plan	under	which	the Firm	is	currently	granting	stock-based	incentive	awards.	In	the	following discussion,	the	LTIP,	plus	prior	Firm	plans	and	plans	assumed	as	the	result	of acquisitions,	are	referred	to	collectively	as	the	"LTI	Plans,"	and	such	plans constitute	the	Firm's	stock-based	incentive	plans.

Restricted	stock	units	("RSUs")	are	awarded	at	no	cost	to	the	recipient	upon	their grant.	Generally,	RSUs	are	granted	annually	and	vest	at	a	rate	of	50%	after	two years	and	50%	after	three	years	and	are	converted	into	shares	of	common	stock as	of	the	vesting	date.	In	addition,	RSUs	typically	include	full-career	eligibility provisions,	which	allow	employees	to	continue	to	vest	upon	voluntary termination,	subject	to	post-employment	and	other	restrictions	based	on	age	or service-related	requirements.	All	RSUs	awards	are	subject	to	forfeiture	until vested	and	contain	clawback	provisions	that	may	result	in	cancellation	under certain	specified	circumstances.	RSUs	entitle	the	recipient	to	receive	cash payments	equivalent	to	any	dividends	paid	on	the	underlying	common	stock during	the	period	the	RSUs	are	outstanding	and,	as	such,	are	considered participating	securities	as	discussed	in	Note	24.

Under	the	LTI	Plans,	stock	options	and	stock	appreciation	rights	("SARs")	have generally	been	granted	with	an	exercise	price	equal	to	the	fair	value	of	JPMorgan Chase's	common	stock	on	the	grant	date.	The	Firm	periodically	grants	employee stock	options	to	individual	employees.	There	were	no	material	grants	of	stock options	or	SARs

in	2015	and	2014.	Grants	of	SARs	in	2013	become	exercisable	ratably	over	five years	(i.e.,	20%	per	year)	and	contain	clawback	provisions	similar	to	RSUs.	The 2013	grants	of	SARs	contain	full-career	eligibility	provisions.	SARs	generally expire	ten	years	after	the	grant	date.

The	Firm	separately	recognizes	compensation	expense	for	each	tranche	of	each award	as	if	it	were	a	separate	award	with	its	own	vesting	date.	Generally,	for each	tranche	granted,	compensation	expense	is	recognized	on	a	straight-line	basis from	the	grant	date	until	the	vesting	date	of	the	respective	tranche,	provided	that the	employees	will	not	become	full-career	eligible	during	the	vesting	period.	For awards	with	full-career	eligibility	provisions	and	awards	granted	with	no	future substantive	service	requirement,	the	Firm	accrues	the	estimated	value	of	awards expected	to	be	awarded	to	employees	as	of	the	grant	date	without	giving consideration	to	the	impact	of	post-employment	restrictions.	For	each	tranche granted	to	employees	who	will	become	full-career	eligible	during	the	vesting period,	compensation	expense	is	recognized	on	a	straight-line	basis	from	the grant	date	until	the	earlier	of	the	employee's	full-career	eligibility	date	or	the vesting	date	of	the	respective	tranche.

The	Firm's	policy	for	issuing	shares	upon	settlement	of	employee	stock-based incentive	awards	is	to	issue	either	new	shares	of	common	stock	or	treasury shares.	During	2015,	2014	and	2013,	the	Firm	settled	all	of	its	employee	stock- based	awards	by	issuing	treasury	shares.

In	January	2008,	the	Firm	awarded	to	its	Chairman	and	Chief	Executive	Officer up	to	2	million	SARs.	The	terms	of	this	award	are	distinct	from,	and	more restrictive	than,	other	equity	grants	regularly	awarded	by	the	Firm.	On	July	15, 2014,	the	Compensation	&	Management	Development	Committee	and	Board	of Directors	determined	that	all	requirements	for	the	vesting	of	the	2	million	SAR awards	had	been	met	and	thus,	the	awards	became	exercisable.	The	SARs,	which will	expire	in	January	2018,	have	an	exercise	price	of	$39.83	(the	price	of JPMorgan	Chase	common	stock	on	the	date	of	grant).	The	expense	related	to	this award	was	dependent	on	changes	in	fair	value	of	the	SARs	through	July	15,	2014 (the	date	when	the	vested	number	of	SARs	were	determined),	and	the	cumulative expense	was	recognized	ratably	over	the	service	period,	which	was	initially assumed	to	be	five	years	but,	effective	in	the	first	quarter	of	2013,	had	been extended	to	six	and	one-half	years.	The	Firm	recognized	$3	million	and $14	million	in	compensation	expense	in	2014	and	2013,	respectively,	for	this award.

# RSUs,	employee	stock	options	and	SARs	activity

Compensation	expense	for	RSUs	is	measured	based	on	the	number	of	shares	granted	multiplied	by	the	stock	price	at	the	grant	date,	and	for	employee	stock	options	and SARs,	is	measured	at	the	grant	date	using	the	Black-Scholes	valuation	model.	Compensation	expense	for	these	awards	is	recognized	in	net	income	as	described previously.	The	following	table	summarizes	JPMorgan	Chase's	RSUs,	employee	stock	options	and	SARs	activity	for	2015.

|  |  | RSUs |  |  | Options/SARs |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2015\n(in\tthousands,\texcept\tweighted-average\tdata,\tand\twhere\totherwise\nstated) | Number\tof\nshares | Weighted-average\ngrant\ndate\tfair\tvalue | Number\tof\nawards | Weighted-\naverage\texercise\nprice | Weighted-average\nremaining\tcontractual\tlife\n(in\tyears) | Aggregate\nintrinsic\tvalue |
| Outstanding,\tJanuary\t1 | 100,568 | $47.81 | 59,195 | $45.00 |  |  |
| Granted | 36,096 | 56.31 | 107 | 64.41 |  |  |
| Exercised\tor\tvested | (47,709) | 41.64 | (14,313) | 40.44 |  |  |
| Forfeited | (3,648) | 54.17 | (943) | 43.04 |  |  |
| Canceled | NA | NA | (580) | 278.93 |  |  |
| Outstanding,\tDecember\t31 | 85,307 | $54.60 | 43,466 | $43.51 | 4.6 | $1,109,411 |
| Exercisable,\tDecember\t31 | NA | NA | 31,853 | 43.85 | 4.0 | 832,929 |

The	total	fair	value	of	RSUs	that	vested	during	the	years	ended	December	31,	2015,	2014	and	2013,	was	$2.8	billion,	$3.2	billion	and	$2.9	billion,	respectively.	The weighted-average	grant	date	per	share	fair	value	of	stock	options	and	SARs	granted	during	the	year	ended	December	31,	2013,	was	$9.58.	The	total	intrinsic	value	of options	exercised	during	the	years	ended	December	31,	2015,	2014	and	2013,	was	$335	million,	$539	million	and	$507	million,	respectively.

# Compensation	expense

The	Firm	recognized	the	following	noncash	compensation	expense	related	to	its various	employee	stock-based	incentive	plans	in	its	Consolidated	statements	of income.

| Year	ended	December	31,	(in	millions)<br>Cost	of	prior	grants	of	RSUs	and	SARs	that	are<br>amortized	over	their	applicable	vesting	periods | 2015<br>$1,109 | 2014<br>$1,371 | 2013<br>$1,440 |
| :--- | :--- | :--- | :--- |
| Accrual\tof\testimated\tcosts\tof\tstock-based\tawards |  |  |  |
| to\tbe\tgranted\tin\tfuture\tperiods\tincluding\tthose\tto |  |  |  |
| full-career\teligible\temployees | 878 | 819 | 779 |
| Total\tnoncash\tcompensation\texpense\trelated\tto\nemployee\tstock-based\tincentive\tplans | $1,987 | $2,190 | $2,219 |

At	December	31,	2015,	approximately	$688	million	(pretax)	of	compensation expense	related	to	unvested	awards	had	not	yet	been	charged	to	net	income.	That cost	is	expected	to	be	amortized	into	compensation	expense	over	a	weighted- average	period	of	0.9	years.	The	Firm	does	not	capitalize	any	compensation expense	related	to	share-based	compensation	awards	to	employees.

# Cash	flows	and	tax	benefits

Income	tax	benefits	related	to	stock-based	incentive	arrangements	recognized	in the	Firm's	Consolidated	statements	of	income	for	the	years	ended	December	31, 2015,	2014	and	2013,	were	$746	million,	$854	million	and	$865	million, respectively.

The	following	table	sets	forth	the	cash	received	from	the	exercise	of	stock options	under	all	stock-based	incentive	arrangements,	and	the	actual	income	tax benefit	realized	related	to	tax	deductions	from	the	exercise	of	the	stock	options.

(a) The	tax	benefit	realized	from	dividends	or	dividend	equivalents	paid	on	equity-classified	share-based	payment awards	that	are	charged	to	retained	earnings	are	recorded	as	an	increase	to	additional	paid-in	capital	and included	in	the	pool	of	excess	tax	benefits	available	to	absorb	tax	deficiencies	on	share-based	payment	awards.

# Valuation	assumptions

The	following	table	presents	the	assumptions	used	to	value	employee	stock options	and	SARs	granted	during	the	year	ended	December	31,	2013,	under	the Black-Scholes	valuation	model.	There	were	no	material	grants	of	stock	options or	SARs	for	the	years	ended	December	31,	2015	and	2014.

The	expected	dividend	yield	is	determined	using	forward-looking	assumptions. The	expected	volatility	assumption	is	derived	from	the	implied	volatility	of JPMorgan	Chase's	stock	options.	The	expected	life	assumption	is	an	estimate	of the	length	of	time	that	an	employee	might	hold	an	option	or	SAR	before	it	is exercised	or	canceled,	and	the	assumption	is	based	on	the	Firm's	historical experience.

# Note	11	–	Noninterest	expense

For	details	on	noninterest	expense,	see	Consolidated	statements	of	income	on page	176.	Included	within	other	expense	is	the	following:

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Legal\texpense | $2,969 | $2,883 | $11,143 |
| Federal\tDeposit\tInsurance\tCorporation-\nrelated\t("FDIC")\texpense | 1,227 | 1,037 | 1,496 |

# Note	12	–	Securities

Securities	are	classified	as	trading,	AFS	or	held-to-maturity	("HTM").	Securities classified	as	trading	assets	are	discussed	in	Note	3.	Predominantly	all	of	the Firm's	AFS	and	HTM	investment	securities	(the	"investment	securities portfolio")	are	held	by	Treasury	and	CIO	in	connection	with	its	asset-liability management	objectives.	At	December	31,	2015,	the	investment	securities portfolio	consisted	of	debt	securities	with	an	average	credit	rating	of	AA+	(based upon	external	ratings	where	available,	and	where	not	available,	based	primarily upon	internal	ratings	which	correspond	to	ratings	as	defined	by	S&P	and Moody's).	AFS	securities	are	carried	at	fair	value	on	the	Consolidated	balance sheets.	Unrealized	gains	and	losses,	after	any	applicable	hedge	accounting adjustments,	are	reported	as	net	increases	or	decreases	to	accumulated	other comprehensive	income/(loss).	The	specific	identification	method	is	used	to determine	realized	gains	and	losses	on	AFS	securities,	which	are	included	in securities	gains/(losses)	on	the	Consolidated	statements	of	income.	HTM	debt securities,	which	management	has	the	intent	and	ability	to	hold	until	maturity, are	carried	at	amortized	cost	on	the	Consolidated	balance	sheets.	For	both	AFS and	HTM	debt	securities,	purchase	discounts	or	premiums	are	generally amortized	into	interest	income	over	the	contractual	life	of	the	security.

During	2014,	the	Firm	transferred	U.S.	government	agency	mortgage-backed securities	and	obligations	of	U.S.	states	and	municipalities	with	a	fair	value	of $19.3	billion	from	AFS	to	HTM.	These	securities	were	transferred	at	fair	value, and	the	transfer	was	a	non-cash	transaction.	AOCI	included	net	pretax	unrealized losses	of	$9	million	on	the	securities	at	the	date	of	transfer.	The	transfer	reflected the	Firm's	intent	to	hold	the	securities	to	maturity	in	order	to	reduce	the	impact of	price	volatility	on	AOCI	and	certain	capital	measures	under	Basel	III.

The	amortized	costs	and	estimated	fair	values	of	the	investment	securities	portfolio	were	as	follows	for	the	dates	indicated.

|  |  |  | 2015 |  |  |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Amortized\tcost | Gross\nunrealized\ngains | Gross\tunrealized\nlosses | Fair\nvalue | Amortized\ncost | Gross\nunrealized\ngains | Gross\tunrealized\nlosses | Fair\nvalue |
| Available-for-sale\tdebt\tsecurities |  |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies(a) | $53,689 | $1,483 | $106 | $55,066 | $63,089 | $2,302 | $72 | $65,319 |
| Residential: |  |  |  |  |  |  |  |  |
| Prime\tand\tAlt-A | 7,462 | 40 | 57 | 7,445 | 5,595 | 78 | 29 | 5,644 |
| Subprime | 210 | 7 | — | 217 | 677 | 14 | — | 691 |
| Non-U.S. | 19,629 | 341 | 13 | 19,957 | 43,550 | 1,010 | — | 44,560 |
| Commercial | 22,990 | 150 | 243 | 22,897 | 20,687 | 438 | 17 | 21,108 |
| Total\tmortgage-backed\tsecurities | 103,980 | 2,021 | 419 | 105,582 | 133,598 | 3,842 | 118 | 137,322 |
| U.S.\tTreasury\tand\tgovernment\tagencies (a) | 11,202 | — | 166 | 11,036 | 13,603 | 56 | 14 | 13,645 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 31,328 | 2,245 | 23 | 33,550 | 27,841 | 2,243 | 16 | 30,068 |
| Certificates\tof\tdeposit | 282 | 1 | — | 283 | 1,103 | 1 | 1 | 1,103 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 35,864 | 853 | 41 | 36,676 | 51,492 | 1,272 | 21 | 52,743 |
| Corporate\tdebt\tsecurities | 12,464 | 142 | 170 | 12,436 | 18,158 | 398 | 24 | 18,532 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | 31,146 | 52 | 191 | 31,007 | 30,229 | 147 | 182 | 30,194 |
| Other | 9,125 | 72 | 100 | 9,097 | 12,442 | 184 | 11 | 12,615 |
| Total\tavailable-for-sale\tdebt\tsecurities | 235,391 | 5,386 | 1,110 | 239,667 | 288,466 | 8,143 | 387 | 296,222 |
| Available-for-sale\tequity\tsecurities | 2,067 | 20 | — | 2,087 | 2,513 | 17 | — | 2,530 |
| Total\tavailable-for-sale\tsecurities | 237,458 | 5,406 | 1,110 | 241,754 | 290,979 | 8,160 | 387 | 298,752 |
| Total\theld-to-maturity\tsecurities(b) | $49,073 | $1,560 | $46 | $50,587 | $49,252 | $1,902 | $— | $51,154 |

(a) Includes	total	U.S.	government-sponsored	enterprise	obligations	with	fair	values	of	 $42.3	billion	and	$59.3	billion	at	December	31,	2015	and	2014,	respectively,	which	were	predominantly	mortgage-related. (b) As	of	December	31,	2015,	consists	of	mortgage	backed	securities	("MBS")	issued	by	U.S.	government-sponsored	enterprises	with	an	amortized	cost	of $30.8	billion,	MBS	issued	by	U.S.	government	agencies	with an	amortized	cost	of	$5.5	billion	and	obligations	of	U.S.	states	and	municipalities	with	an	amortized	cost	of	 $12.8	billion.	As	of	December	31,	2014,	consists	of	MBS	issued	by	U.S.	government-sponsored enterprises	with	an	amortized	cost	of	$35.3	billion,	MBS	issued	by	U.S.	government	agencies	with	an	amortized	cost	of	 $3.7	billion	and	obligations	of	U.S.	states	and	municipalities	with	an	amortized	cost	of $10.2 billion.

# Securities	impairment

The	following	tables	present	the	fair	value	and	gross	unrealized	losses	for	the	investment	securities	portfolio	by	aging	category	at	December	31,	2015	and	2014.

|  | Less	than	12	months |  | 12	months	or	more |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  |  |  | Total\tgross\tunrealized |
| December\t31,\t2015\t(in\tmillions) | Fair\tvalue | Gross\tunrealized\tlosses | Fair\tvalue | Gross\tunrealized\tlosses | Total\tfair\tvalue | losses |
| Available-for-sale\tdebt\tsecurities |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies | $13,002 | $95 | $697 | $11 | $13,699 | $106 |
| Residential: |  |  |  |  |  |  |
| Prime\tand\tAlt-A | 5,147 | 51 | 238 | 6 | 5,385 | 57 |
| Subprime | — | — | — | — | — | — |
| Non-U.S. | 2,021 | 12 | 167 | 1 | 2,188 | 13 |
| Commercial | 13,779 | 239 | 658 | 4 | 14,437 | 243 |
| Total\tmortgage-backed\tsecurities | 33,949 | 397 | 1,760 | 22 | 35,709 | 419 |
| U.S.\tTreasury\tand\tgovernment\tagencies | 10,998 | 166 | — | — | 10,998 | 166 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 1,676 | 18 | 205 | 5 | 1,881 | 23 |
| Certificates\tof\tdeposit | — | — | — | — | — | — |
| Non-U.S.\tgovernment\tdebt\tsecurities | 3,267 | 26 | 367 | 15 | 3,634 | 41 |
| Corporate\tdebt\tsecurities | 3,198 | 125 | 848 | 45 | 4,046 | 170 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | 15,340 | 67 | 10,692 | 124 | 26,032 | 191 |
| Other | 4,284 | 60 | 1,005 | 40 | 5,289 | 100 |
| Total\tavailable-for-sale\tdebt\tsecurities | 72,712 | 859 | 14,877 | 251 | 87,589 | 1,110 |
| Available-for-sale\tequity\tsecurities | — | — | — | — | — | — |
| Held-to-maturity\tsecurities | 3,763 | 46 | — | — | 3,763 | 46 |
| Total\tsecurities\twith\tgross\tunrealized\tlosses | $76,475 | $905 | $14,877 | $251 | $91,352 | $1,156 |

|  | Less	than	12	months |  | 12	months	or	more | 12	months	or	more |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2014\t(in\tmillions) | Fair\tvalue | Gross\tunrealized\tlosses | Fair\tvalue | Gross\tunrealized\tlosses | Total\tfair\tvalue | Total\tgross\tunrealized\nlosses |
| Available-for-sale\tdebt\tsecurities |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies | $1,118 | $5 | $4,989 | $67 | $6,107 | $72 |
| Residential: |  |  |  |  |  |  |
| Prime\tand\tAlt-A | 1,840 | 10 | 405 | 19 | 2,245 | 29 |
| Subprime | — | — | — | — | — | — |
| Non-U.S. | — | — | — | — | — | — |
| Commercial | 4,803 | 15 | 92 | 2 | 4,895 | 17 |
| Total\tmortgage-backed\tsecurities | 7,761 | 30 | 5,486 | 88 | 13,247 | 118 |
| U.S.\tTreasury\tand\tgovernment\tagencies | 8,412 | 14 | — | — | 8,412 | 14 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 1,405 | 15 | 130 | 1 | 1,535 | 16 |
| Certificates\tof\tdeposit | 1,050 | 1 | — | — | 1,050 | 1 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 4,433 | 4 | 906 | 17 | 5,339 | 21 |
| Corporate\tdebt\tsecurities | 2,492 | 22 | 80 | 2 | 2,572 | 24 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | 13,909 | 76 | 9,012 | 106 | 22,921 | 182 |
| Other | 2,258 | 11 | — | — | 2,258 | 11 |
| Total\tavailable-for-sale\tdebt\tsecurities | 41,720 | 173 | 15,614 | 214 | 57,334 | 387 |
| Available-for-sale\tequity\tsecurities | — | — | — | — | — | — |
| Held-to-maturity\tsecurities | — | — | — | — | — | — |
| Total\tsecurities\twith\tgross\tunrealized\tlosses | $41,720 | $173 | $15,614 | $214 | $57,334 | $387 |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  |  | 235 |

# Gross	unrealized	losses

The	Firm	has	recognized	the	unrealized	losses	on	securities	it	intends	to	sell.	As of	December	31,	2015,	the	Firm	does	not	intend	to	sell	any	securities	with	a	loss position	in	AOCI,	and	it	is	not	likely	that	the	Firm	will	be	required	to	sell	these securities	before	recovery	of	their	amortized	cost	basis.	Except	for	the	securities for	which	credit	losses	have	been	recognized	in	income,	the	Firm	believes	that the	securities	with	an	unrealized	loss	in	AOCI	are	not	other-than-temporarily impaired	as	of	December	31,	2015.

# Other-than-temporary	impairment

AFS	debt	and	equity	securities	and	HTM	debt	securities	in	unrealized	loss positions	are	analyzed	as	part	of	the	Firm's	ongoing	assessment	of	other-than- temporary	impairment	("OTTI").	For	most	types	of	debt	securities,	the	Firm considers	a	decline	in	fair	value	to	be	other-than-temporary	when	the	Firm	does not	expect	to	recover	the	entire	amortized	cost	basis	of	the	security.	For beneficial	interests	in	securitizations	that	are	rated	below	"AA"	at	their acquisition,	or	that	can	be	contractually	prepaid	or	otherwise	settled	in	such	a way	that	the	Firm	would	not	recover	substantially	all	of	its	recorded	investment, the	Firm	considers	an	impairment	to	be	other	than	temporary	when	there	is	an adverse	change	in	expected	cash	flows.	For	AFS	equity	securities,	the	Firm considers	a	decline	in	fair	value	to	be	other-than-temporary	if	it	is	probable	that the	Firm	will	not	recover	its	cost	basis.

Potential	OTTI	is	considered	using	a	variety	of	factors,	including	the	length	of time	and	extent	to	which	the	market	value	has	been	less	than	cost;	adverse conditions	specifically	related	to	the	industry,	geographic	area	or	financial condition	of	the	issuer	or	underlying	collateral	of	a	security;	payment	structure of	the	security;	changes	to	the	rating	of	the	security	by	a	rating	agency;	the volatility	of	the	fair	value	changes;	and	the	Firm's	intent	and	ability	to	hold	the security	until	recovery.

For	AFS	debt	securities,	the	Firm	recognizes	OTTI	losses	in	earnings	if	the	Firm has	the	intent	to	sell	the	debt	security,	or	if	it	is	more	likely	than	not	that	the	Firm will	be	required	to	sell	the	debt	security	before	recovery	of	its	amortized	cost basis.	In	these	circumstances	the	impairment	loss	is	equal	to	the	full	difference between	the	amortized	cost	basis	and	the	fair	value	of	the	securities.	For	debt securities	in	an	unrealized	loss	position	that	the	Firm	has	the	intent	and	ability	to hold,	the	expected	cash	flows	to	be	received	from	the	securities	are	evaluated	to determine	if	a	credit	loss	exists.	In	the	event	of	a	credit	loss,	only	the	amount	of impairment	associated	with	the	credit	loss	is	recognized	in	income.	Amounts relating	to	factors	other	than	credit	losses	are	recorded	in	OCI.

The	Firm's	cash	flow	evaluations	take	into	account	the	factors	noted	above	and expectations	of	relevant	market	and	economic	data	as	of	the	end	of	the	reporting period.	For	securities	issued	in	a	securitization,	the	Firm	estimates	cash	flows considering	underlying	loan-level	data	and	structural	features	of	the securitization,	such	as	subordination,	excess	spread,	overcollateralization	or	other forms	of	credit	enhancement,	and	compares	the	losses	projected	for	the underlying	collateral	("pool	losses")

against	the	level	of	credit	enhancement	in	the	securitization	structure	to determine	whether	these	features	are	sufficient	to	absorb	the	pool	losses,	or whether	a	credit	loss	exists.	The	Firm	also	performs	other	analyses	to	support	its cash	flow	projections,	such	as	first-loss	analyses	or	stress	scenarios.

For	equity	securities,	OTTI	losses	are	recognized	in	earnings	if	the	Firm	intends to	sell	the	security.	In	other	cases	the	Firm	considers	the	relevant	factors	noted above,	as	well	as	the	Firm's	intent	and	ability	to	retain	its	investment	for	a	period of	time	sufficient	to	allow	for	any	anticipated	recovery	in	market	value,	and whether	evidence	exists	to	support	a	realizable	value	equal	to	or	greater	than	the cost	basis.	Any	impairment	loss	on	an	equity	security	is	equal	to	the	full difference	between	the	cost	basis	and	the	fair	value	of	the	security.

# Securities	gains	and	losses

The	following	table	presents	realized	gains	and	losses	and	OTTI	from	AFS securities	that	were	recognized	in	income.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Realized\tgains | $351 | $314 | $1,302 |
| Realized\tlosses | (127) | (233) | (614) |
| OTTI\tlosses | (22) | (4) | (21) |
| Net\tsecurities\tgains | 202 | 77 | 667 |
| OTTI\tlosses |  |  |  |
| Credit\tlosses\trecognized\tin\tincome | (1) | (2) | (1) |
| Securities\tthe\tFirm\tintends\tto\tsell(a) | (21) | (2) | (20) |
| Total\tOTTI\tlosses\trecognized\tin\tincome | $(22) | $(4) | $(21) |

(a) Excludes	realized	losses	on	securities	sold	of	 $5	million,	$3	million	and	$12	million	for	the	years ended	December	31,	2015,	2014	and	2013,	respectively	that	had	been	previously	reported	as	an OTTI	loss	due	to	the	intention	to	sell	the	securities.

# Changes	in	the	credit	loss	component	of	credit-impaired	debt	securities

The	following	table	presents	a	rollforward	for	the	years	ended	December	31, 2015,	2014	and	2013,	of	the	credit	loss	component	of	OTTI	losses	that	have	been recognized	in	income,	related	to	AFS	debt	securities	that	the	Firm	does	not intend	to	sell.

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Balance,\tbeginning\tof\tperiod | $3 | $1 | $522 |
| Additions: |  |  |  |
| Newly\tcredit-impaired\tsecurities | 1 | 2 | 1 |
| Losses\treclassified\tfrom\tother\tcomprehensive\nincome\ton\tpreviously\tcredit-impaired\tsecurities | — | — | — |
| Reductions: |  |  |  |
| Sales\tand\tredemptions\tof\tcredit-impaired\nsecurities | — | — | (522) |
| Balance,\tend\tof\tperiod | $4 | $3 | $1 |

# Contractual	maturities	and	yields

The	following	table	presents	the	amortized	cost	and	estimated	fair	value	at	December	31,	2015,	of	JPMorgan	Chase's	investment	securities	portfolio	by	contractual maturity.

| December	31,	2015<br>(in	millions) | Due	in	one<br>year	or	less | Due	after	one	year<br>through	five	years | Due	after	five	years<br>through	10	years | Due	after<br>10	years(c) | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Available-for-sale\tdebt\tsecurities |  |  |  |  |  |
| Mortgage-backed\tsecurities(a) |  |  |  |  |  |
| Amortized\tcost | $2,415 | $9,728 | $6,562 | $85,275 | $103,980 |
| Fair\tvalue | 2,421 | 9,886 | 6,756 | 86,519 | 105,582 |
| Average\tyield(b) | 1.48% | 1.86% | 3.15% | 3.08% | 2.93% |
| U.S.\tTreasury\tand\tgovernment\tagencies (a) |  |  |  |  |  |
| Amortized\tcost | $— | $— | $10,069 | $1,133 | $11,202 |
| Fair\tvalue | — | — | 9,932 | 1,104 | 11,036 |
| Average\tyield(b) | —% | —% | 0.31% | 0.48% | 0.33% |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities |  |  |  |  |  |
| Amortized\tcost | $184 | $754 | $1,520 | $28,870 | $31,328 |
| Fair\tvalue | 187 | 774 | 1,600 | 30,989 | 33,550 |
| Average\tyield(b) | 5.21% | 3.50% | 5.57% | 6.68% | 6.54% |
| Certificates\tof\tdeposit |  |  |  |  |  |
| Amortized\tcost | $230 | $52 | $— | $— | $282 |
| Fair\tvalue | 231 | 52 | — | — | 283 |
| Average\tyield(b) | 8.66% | 3.28% | —% | —% | 7.68% |
| Non-U.S.\tgovernment\tdebt\tsecurities |  |  |  |  |  |
| Amortized\tcost | $6,126 | $11,177 | $16,575 | $1,986 | $35,864 |
| Fair\tvalue | 6,422 | 11,429 | 16,747 | 2,078 | 36,676 |
| Average\tyield(b) | 3.11% | 1.84% | 1.06% | 0.67% | 1.63% |
| Corporate\tdebt\tsecurities |  |  |  |  |  |
| Amortized\tcost | $2,761 | $7,175 | $2,385 | $143 | $12,464 |
| Fair\tvalue | 2,776 | 7,179 | 2,347 | 134 | 12,436 |
| Average\tyield(b) | 2.87% | 2.32% | 3.09% | 4.46% | 2.61% |
| Asset-backed\tsecurities |  |  |  |  |  |
| Amortized\tcost | $39 | $442 | $20,501 | $19,289 | $40,271 |
| Fair\tvalue | 40 | 449 | 20,421 | 19,194 | 40,104 |
| Average\tyield(b) | 0.71% | 1.72% | 1.79% | 1.84% | 1.81% |
| Total\tavailable-for-sale\tdebt\tsecurities |  |  |  |  |  |
| Amortized\tcost | $11,755 | $29,328 | $57,612 | $136,696 | $235,391 |
| Fair\tvalue | 12,077 | 29,769 | 57,803 | 140,018 | 239,667 |
| Average\tyield(b) | 2.85% | 2.00% | 1.63% | 3.61% | 2.89% |
| Available-for-sale\tequity\tsecurities |  |  |  |  |  |
| Amortized\tcost | $— | $— | $— | $2,067 | $2,067 |
| Fair\tvalue | — | — | — | 2,087 | 2,087 |
| Average\tyield(b) | —% | —% | —% | 0.30% | 0.30% |
| Total\tavailable-for-sale\tsecurities |  |  |  |  |  |
| Amortized\tcost | $11,755 | $29,328 | $57,612 | $138,763 | $237,458 |
| Fair\tvalue | 12,077 | 29,769 | 57,803 | 142,105 | 241,754 |
| Average\tyield(b) | 2.85% | 2.00% | 1.63% | 3.56% | 2.87% |
| Total\theld-to-maturity\tsecurities |  |  |  |  |  |
| Amortized\tcost | $51 | $— | $931 | $48,091 | $49,073 |
| Fair\tvalue | 50 | — | 976 | 49,561 | 50,587 |
| Average\tyield(b) | 4.42% | —% | 5.01% | 3.98% | 4.00% |

(a) U.S.	government-sponsored	enterprises	were	the	only	issuers	whose	securities	exceeded	 10%	of	JPMorgan	Chase's	total	stockholders'	equity	at	December	31,	2015.

(b) Average	yield	is	computed	using	the	effective	yield	of	each	security	owned	at	the	end	of	the	period,	weighted	based	on	the	amortized	cost	of	each	security.	The	effective	yield	considers	the contractual	coupon,	amortization	of	premiums	and	accretion	of	discounts,	and	the	effect	of	related	hedging	derivatives.	Taxable-equivalent	amounts	are	used	where	applicable.	The	effective	yield excludes	unscheduled	principal	prepayments;	and	accordingly,	actual	maturities	of	securities	may	differ	from	their	contractual	or	expected	maturities	as	certain	securities	may	be	prepaid.

(c) Includes	securities	with	no	stated	maturity.	Substantially	all	of	the	Firm's	residential	mortgage-backed	securities	and	collateralized	mortgage	obligations	are	due	in	 10	years	or	more,	based	on contractual	maturity.	The	estimated	weighted-average	life,	which	reflects	anticipated	future	prepayments,	is	approximately	five	years	for	agency	residential	mortgage-backed	securities,	two	years for	agency	residential	collateralized	mortgage	obligations	and	four	years	for	nonagency	residential	collateralized	mortgage	obligations.

# Note	13	–	Securities	financing	activities

JPMorgan	Chase	enters	into	resale	agreements,	repurchase	agreements,	securities borrowed	transactions	and	securities	loaned	transactions	(collectively,	"securities financing	agreements")	primarily	to	finance	the	Firm's	inventory	positions, acquire	securities	to	cover	short	positions,	accommodate	customers'	financing needs,	and	settle	other	securities	obligations.

Securities	financing	agreements	are	treated	as	collateralized	financings	on	the Firm's	Consolidated	balance	sheets.	Resale	and	repurchase	agreements	are generally	carried	at	the	amounts	at	which	the	securities	will	be	subsequently	sold or	repurchased.	Securities	borrowed	and	securities	loaned	transactions	are generally	carried	at	the	amount	of	cash	collateral	advanced	or	received.	Where appropriate	under	applicable	accounting	guidance,	resale	and	repurchase agreements	with	the	same	counterparty	are	reported	on	a	net	basis.	For	further discussion	of	the	offsetting	of	assets	and	liabilities,	see	Note	1.	Fees	received	and paid	in	connection	with	securities	financing	agreements	are	recorded	in	interest income	and	interest	expense	on	the	Consolidated	statements	of	income.

The	Firm	has	elected	the	fair	value	option	for	certain	securities	financing agreements.	For	further	information	regarding	the	fair	value	option,	see	Note	4. The	securities	financing	agreements	for	which	the	fair	value	option	has	been elected	are	reported	within	securities	purchased	under	resale	agreements, securities	loaned	or	sold	under	repurchase	agreements,	and	securities	borrowed on	the	Consolidated	balance	sheets.	Generally,	for	agreements	carried	at	fair value,	current-period	interest	accruals	are	recorded	within	interest	income	and interest	expense,	with	changes	in	fair	value	reported	in	principal	transactions revenue.	However,	for	financial	instruments	containing	embedded	derivatives that	would	be	separately	accounted	for	in	accordance	with	accounting	guidance for	hybrid	instruments,	all	changes	in	fair	value,	including	any	interest	elements, are	reported	in	principal	transactions	revenue.

Secured	financing	transactions	expose	the	Firm	to	credit	and	liquidity	risk.	To manage	these	risks,	the	Firm	monitors	the	value	of	the	underlying	securities (predominantly	high-quality	securities	collateral,	including	government-issued debt	and	agency	MBS)	that	it	has	received	from	or	provided	to	its	counterparties compared	to	the	value	of	cash	proceeds	and	exchanged	collateral,	and	either requests	additional	collateral	or	returns	securities	or	collateral	when	appropriate. Margin	levels	are	initially	established	based	upon	the	counterparty,	the	type	of underlying	securities,	and	the	permissible	collateral,	and	are	monitored	on	an ongoing	basis.

In	resale	agreements	and	securities	borrowed	transactions,	the	Firm	is	exposed	to credit	risk	to	the	extent	that	the	value	of	the	securities	received	is	less	than	initial cash	principal	advanced	and	any	collateral	amounts	exchanged.	In	repurchase agreements	and	securities	loaned	transactions,	credit	risk	exposure	arises	to	the extent	that	the	value	of	underlying	securities	exceeds	the	value	of	the	initial	cash principal	advanced,	and	any	collateral	amounts	exchanged.

Additionally,	the	Firm	typically	enters	into	master	netting	agreements	and	other similar	arrangements	with	its	counterparties,	which	provide	for	the	right	to liquidate	the	underlying	securities	and	any	collateral	amounts	exchanged	in	the event	of	a	counterparty	default.	It	is	also	the	Firm's	policy	to	take	possession, where	possible,	of	the	securities	underlying	resale	agreements	and	securities borrowed	transactions.	For	further	information	regarding	assets	pledged	and collateral	received	in	securities	financing	agreements,	see	Note	30.

As	a	result	of	the	Firm's	credit	risk	mitigation	practices	with	respect	to	resale	and securities	borrowed	agreements	as	described	above,	the	Firm	did	not	hold	any reserves	for	credit	impairment	with	respect	to	these	agreements	as	of	December 31,	2015	and	2014.

Certain	prior	period	amounts	for	securities	purchased	under	resale	agreements and	securities	borrowed,	as	well	as	securities	sold	under	repurchase	agreements and	securities	loaned,	have	been	revised	to	conform	with	the	current	period presentation.	These	revisions	had	no	impact	on	the	Firm's	Consolidated	balance sheets	or	its	results	of	operations.

The	following	table	presents	as	of	December	31,	2015	and	2014,	the	gross	and	net	securities	purchased	under	resale	agreements	and	securities	borrowed.	Securities purchased	under	resale	agreements	have	been	presented	on	the	Consolidated	balance	sheets	net	of	securities	sold	under	repurchase	agreements	where	the	Firm	has obtained	an	appropriate	legal	opinion	with	respect	to	the	master	netting	agreement,	and	where	the	other	relevant	criteria	have	been	met.	Where	such	a	legal	opinion	has not	been	either	sought	or	obtained,	the	securities	purchased	under	resale	agreements	are	not	eligible	for	netting	and	are	shown	separately	in	the	table	below.	Securities borrowed	are	presented	on	a	gross	basis	on	the	Consolidated	balance	sheets.

|  |  | 2015 |  |  |  | 2014 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tasset\nbalance | Amounts\tnetted\ton\nthe\tConsolidated\nbalance\tsheets | Net\tasset\tbalance |  | Gross\tasset\nbalance | Amounts\tnetted\non\tthe\nConsolidated\nbalance\tsheets | Net\tasset\tbalance |  |
| Securities\tpurchased\tunder\tresale\tagreements |  |  |  |  |  |  |  |  |
| Securities\tpurchased\tunder\tresale\tagreements\twith\tan\nappropriate\tlegal\topinion | $365,805 | $(156,258) | $209,547 |  | $347,142 | $(142,719) | $204,423 |  |
| Securities\tpurchased\tunder\tresale\tagreements\twhere\tan |  |  |  |  |  |  |  |  |
| appropriate\tlegal\topinion\thas\tnot\tbeen\teither\tsought\tor |  |  |  |  |  |  |  |  |
| obtained | 2,343 |  | 2,343 |  | 10,598 |  | 10,598 |  |
| Total\tsecurities\tpurchased\tunder\tresale\tagreements | $368,148 | $(156,258) | $211,890 | (a) | $357,740 | $(142,719) | $215,021 | (a) |
|  |  |  |  |  |  |  |  | (b) |
| Securities\tborrowed | $98,721 | NA | $98,721 | (b)(c) | $110,435 | NA | $110,435 | (c) |

(a) At	December	31,	2015	and	2014,	included	securities	purchased	under	resale	agreements	of	 $23.1	billion	and	$28.6	billion,	respectively,	accounted	for	at	fair	value.

(b) At	December	31,	2015	and	2014,	included	securities	borrowed	of	 $395	million	and	$992	million,	respectively,	accounted	for	at	fair	value.

(c) Included	$31.3	billion	and	$35.3	billion	at	December	31,	2015	and	2014,	respectively,	of	securities	borrowed	where	an	appropriate	legal	opinion	has	not	been	either	sought	or	obtained	with	respect	to	the	master netting	agreement.

The	following	table	presents	information	as	of	December	31,	2015	and	2014,	regarding	the	securities	purchased	under	resale	agreements	and	securities	borrowed	for which	an	appropriate	legal	opinion	has	been	obtained	with	respect	to	the	master	netting	agreement.	The	below	table	excludes	information	related	to	resale	agreements and	securities	borrowed	where	such	a	legal	opinion	has	not	been	either	sought	or	obtained.

|  |  | Consolidated	balance	sheets(a) | Consolidated	balance	sheets(a) |  |  | Consolidated	balance	sheets(a) | Consolidated	balance	sheets(a) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Net\tasset\tbalance | Financial\ninstruments(b) | Cash\tcollateral | Net\texposure | Net\tasset\nbalance | Financial\ninstruments(b) | Cash\tcollateral | Net\texposure |
| Securities\tpurchased\tunder\tresale |  |  |  |  |  |  |  |  |
| agreements\twith\tan\tappropriate |  |  |  |  |  |  |  |  |
| legal\topinion | $209,547 | $(206,423) | $(351) | $2,773 | $204,423 | $(201,375) | $(246) | $2,802 |
| Securities\tborrowed | $67,453 | $(65,081) | $— | $2,372 | $75,113 | $(72,730) | $— | $2,383 |

(a) For	some	counterparties,	the	sum	of	the	financial	instruments	and	cash	collateral	not	nettable	on	the	Consolidated	balance	sheets	may	exceed	the	net	asset	balance.	Where	this	is	the	case	the	total amounts	reported	in	these	two	columns	are	limited	to	the	balance	of	the	net	reverse	repurchase	agreement	or	securities	borrowed	asset	with	that	counterparty.	As	a	result	a	net	exposure	amount	is reported	even	though	the	Firm,	on	an	aggregate	basis	for	its	securities	purchased	under	resale	agreements	and	securities	borrowed,	has	received	securities	collateral	with	a	total	fair	value	that	is greater	than	the	funds	provided	to	counterparties.

(b) Includes	financial	instrument	collateral	received,	repurchase	liabilities	and	securities	loaned	liabilities	with	an	appropriate	legal	opinion	with	respect	to	the	master	netting	agreement;	these	amounts are	not	presented	net	on	the	Consolidated	balance	sheets	because	other	U.S.	GAAP	netting	criteria	are	not	met.

The	following	table	presents	as	of	December	31,	2015	and	2014,	the	gross	and	net	securities	sold	under	repurchase	agreements	and	securities	loaned.	Securities	sold under	repurchase	agreements	have	been	presented	on	the	Consolidated	balance	sheets	net	of	securities	purchased	under	resale	agreements	where	the	Firm	has	obtained	an appropriate	legal	opinion	with	respect	to	the	master	netting	agreement,	and	where	the	other	relevant	criteria	have	been	met.	Where	such	a	legal	opinion	has	not	been either	sought	or	obtained,	the	securities	sold	under	repurchase	agreements	are	not	eligible	for	netting	and	are	shown	separately	in	the	table	below.	Securities	loaned	are presented	on	a	gross	basis	on	the	Consolidated	balance	sheets.

|  |  | 2015 |  |  |  | 2014 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tliability\nbalance | Amounts\tnetted\non\tthe\nConsolidated\nbalance\tsheets | Net\tliability\nbalance |  | Gross\tliability\nbalance | Amounts\tnetted\non\tthe\nConsolidated\nbalance\tsheets | Net\tliability\nbalance |  |
| Securities\tsold\tunder\trepurchase\tagreements |  |  |  |  |  |  |  |  |
| Securities\tsold\tunder\trepurchase\tagreements\twith\tan\tappropriate\nlegal\topinion | $277,415 | $(156,258) | $121,157 |  | $290,529 | $(142,719) | $147,810 |  |
| Securities\tsold\tunder\trepurchase\tagreements\twhere\tan\tappropriate\nlegal\topinion\thas\tnot\tbeen\teither\tsought\tor\tobtained(a) | 12,629 |  | 12,629 |  | 21,996 |  | 21,996 |  |
| Total\tsecurities\tsold\tunder\trepurchase\tagreements | $290,044 | $(156,258) | $133,786 | (c) | $312,525 | $(142,719) | $169,806 | (c) |
| Securities\tloaned(b) | $22,556 | NA | $22,556 | (d)(e) | $25,927 | NA | $25,927 | (d)(e) |

(a) Includes	repurchase	agreements	that	are	not	subject	to	a	master	netting	agreement	but	do	provide	rights	to	collateral.

(b) Included	securities-for-securities	lending	transactions	of	$4.4	billion	and	$4.1	billion	at	December	31,	2015	and	2014,	respectively,	accounted	for	at	fair	value,	where	the	Firm	is	acting	as	lender.

These	amounts	are	presented	within	other	liabilities	in	the	Consolidated	balance	sheets.

(c) At	December	31,	2015	and	2014,	included	securities	sold	under	repurchase	agreements	of	$3.5	billion	and	$3.0	billion,	respectively,	accounted	for	at	fair	value.

(d) There	were	no	securities	loaned	accounted	for	at	fair	value	at	 December	31,	2015	and	2014,	respectively.

(e) Included	$45	million	and	$271	million	at	December	31,	2015	and	2014,	respectively,	of	securities	loaned	where	an	appropriate	legal	opinion	has	not	been	either	sought	or	obtained	with	respect	to the	master	netting	agreement.

The	following	table	presents	information	as	of	December	31,	2015	and	2014,	regarding	the	securities	sold	under	repurchase	agreements	and	securities	loaned	for	which an	appropriate	legal	opinion	has	been	obtained	with	respect	to	the	master	netting	agreement.	The	below	table	excludes	information	related	to	repurchase	agreements	and securities	loaned	where	such	a	legal	opinion	has	not	been	either	sought	or	obtained.

|  |  | Consolidated	balance	sheets(a) | Consolidated	balance	sheets(a) |  |  | the	Consolidated	balance	sheets(a) | the	Consolidated	balance	sheets(a) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Net\tliability\nbalance | Financial\ninstruments(b) | Cash\tcollateral | Net\tamount(c) | Net\tliability\nbalance | Financial\ninstruments(b) | Cash\tcollateral | Net\tamount(c) |
| Securities\tsold\tunder\trepurchase |  |  |  |  |  |  |  |  |
| agreements\twith\tan\tappropriate |  |  |  |  |  |  |  |  |
| legal\topinion | $121,157 | $(117,825) | $(1,007) | $2,325 | $147,810 | $(145,732) | $(497) | $1,581 |
| Securities\tloaned | $22,511 | $(22,245) | $— | $266 | $25,656 | $(25,287) | $— | $369 |

(a) For	some	counterparties	the	sum	of	the	financial	instruments	and	cash	collateral	not	nettable	on	the	Consolidated	balance	sheets	may	exceed	the	net	liability	balance.	Where	this	is	the	case	the	total amounts	reported	in	these	two	columns	are	limited	to	the	balance	of	the	net	repurchase	agreement	or	securities	loaned	liability	with	that	counterparty.

(b) Includes	financial	instrument	collateral	transferred,	reverse	repurchase	assets	and	securities	borrowed	assets	with	an	appropriate	legal	opinion	with	respect	to	the	master	netting	agreement;	these amounts	are	not	presented	net	on	the	Consolidated	balance	sheets	because	other	U.S.	GAAP	netting	criteria	are	not	met.

(c) Net	amount	represents	exposure	of	counterparties	to	the	Firm.

Effective	April	1,	2015,	the	Firm	adopted	new	accounting	guidance,	which	requires	enhanced	disclosures	with	respect	to	the	types	of	financial	assets	pledged	in	secured financing	transactions	and	the	remaining	contractual	maturity	of	the	secured	financing	transactions;	the	following	tables	present	this	information	as	of	December	31, 2015.

|  | Gross	liability	balance |  |
| :--- | :--- | :--- |
| December\t31,\t2015\t(in\tmillions) | Securities\tsold\tunder\nrepurchase\tagreements | Securities\tloaned |
| Mortgage-backed\tsecurities | $12,790 | $— |
| U.S.\tTreasury\tand\tgovernment\tagencies | 154,377 | 5 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 1,316 | — |
| Non-U.S.\tgovernment\tdebt | 80,162 | 4,426 |
| Corporate\tdebt\tsecurities | 21,286 | 78 |
| Asset-backed\tsecurities | 4,394 | — |
| Equity\tsecurities | 15,719 | 18,047 |
| Total | $290,044 | $22,556 |

|  | Overnight	and |  |  | Greater	than |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2015\t(in\tmillions) | continuous | Up\tto\t30\tdays | 30\t–\t90\tdays | 90\tdays | Total |
| Total\tsecurities\tsold\tunder\trepurchase\tagreements | $114,595 | $100,082 | $29,955 | $45,412 | $290,044 |
| Total\tsecurities\tloaned | 8,320 | 708 | 793 | 12,735 | 22,556 |

# Transfers	not	qualifying	for	sale	accounting

At	December	31,	2015	and	2014,	the	Firm	held	$7.5	billion	and	$13.8	billion, respectively,	of	financial	assets	for	which	the	rights	have	been	transferred	to third	parties;	however,	the	transfers	did	not	qualify	as	a	sale	in	accordance	with U.S.	GAAP.	These	transfers	have	been	recognized	as	collateralized	financing transactions.	The	transferred	assets	are	recorded	in	trading	assets	and	loans,	and the	corresponding	liabilities	are	predominantly	recorded	in	other	borrowed	funds on	the	Consolidated	balance	sheets.

# Loan	accounting	framework

The	accounting	for	a	loan	depends	on	management's	strategy	for	the	loan,	and	on whether	the	loan	was	credit-impaired	at	the	date	of	acquisition.	The	Firm accounts	for	loans	based	on	the	following	categories:

•Originated	or	purchased	loans	held-for-investment	(i.e.,	"retained"),	other than	purchased	credit-impaired	("PCI")	loans

•Loans	held-for-sale

•Loans	at	fair value

•PCI	loans	held-for-

# investment

The	following	provides	a	detailed	accounting	discussion	of	these	loan	categories:

# Loans	held-for-investment	(other	than	PCI	loans)

Originated	or	purchased	loans	held-for-investment,	other	than	PCI	loans,	are measured	at	the	principal	amount	outstanding,	net	of	the	following:	allowance	for loan	losses;	charge-offs;	interest	applied	to	principal	(for	loans	accounted	for	on the	cost	recovery	method);	unamortized	discounts	and	premiums;	and	net deferred	loan	fees	or	costs.	Credit	card	loans	also	include	billed	finance	charges and	fees	net	of	an	allowance	for	uncollectible	amounts.

# Interest	income

Interest	income	on	performing	loans	held-for-investment,	other	than	PCI	loans, is	accrued	and	recognized	as	interest	income	at	the	contractual	rate	of	interest. Purchase	price	discounts	or	premiums,	as	well	as	net	deferred	loan	fees	or	costs, are	amortized	into	interest	income	over	the	life	of	the	loan	to	produce	a	level	rate of	return.

Nonaccrual	loans	are	those	on	which	the	accrual	of	interest	has	been	suspended. Loans	(other	than	credit	card	loans	and	certain	consumer	loans	insured	by	U.S. government	agencies)	are	placed	on	nonaccrual	status	and	considered nonperforming	when	full	payment	of	principal	and	interest	is	in	doubt,	or	when principal	and	interest	has	been	in	default	for	a	period	of	90	days	or	more,	unless the	loan	is	both	well-secured	and	in	the	process	of	collection.	A	loan	is determined	to	be	past	due	when	the	minimum	payment	is	not	received	from	the borrower	by	the	contractually	specified	due	date	or	for	certain	loans	(e.g., residential	real	estate	loans),	when	a	monthly	payment	is	due	and	unpaid	for	30 days	or	more.	Finally,	collateral-dependent	loans	are	typically	maintained	on nonaccrual	status.

On	the	date	a	loan	is	placed	on	nonaccrual	status,	all	interest	accrued	but	not collected	is	reversed	against	interest	income.	In	addition,	the	amortization	of deferred	amounts	is	suspended.	Interest	income	on	nonaccrual	loans	may	be recognized	as	cash	interest	payments	are	received	(i.e.,	on	a	cash	basis)	if	the recorded	loan	balance	is	deemed	fully	collectible;	however,	if	there	is	doubt regarding	the	ultimate	collectibility	of	the	recorded	loan	balance,	all	interest	cash receipts	are	applied	to	reduce	the

carrying	value	of	the	loan	(the	cost	recovery	method).	For	consumer	loans, application	of	this	policy	typically	results	in	the	Firm	recognizing	interest income	on	nonaccrual	consumer	loans	on	a	cash	basis.

A	loan	may	be	returned	to	accrual	status	when	repayment	is	reasonably	assured and	there	has	been	demonstrated	performance	under	the	terms	of	the	loan	or,	if applicable,	the	terms	of	the	restructured	loan.

As	permitted	by	regulatory	guidance,	credit	card	loans	are	generally	exempt from	being	placed	on	nonaccrual	status;	accordingly,	interest	and	fees	related	to credit	card	loans	continue	to	accrue	until	the	loan	is	charged	off	or	paid	in	full. However,	the	Firm	separately	establishes	an	allowance	for	the	estimated uncollectible	portion	of	accrued	interest	and	fee	income	on	credit	card	loans.	The allowance	is	established	with	a	charge	to	interest	income	and	is	reported	as	an offset	to	loans.

# Allowance	for	loan	losses

The	allowance	for	loan	losses	represents	the	estimated	probable	credit	losses inherent	in	the	held-for-investment	loan	portfolio	at	the	balance	sheet	date. Changes	in	the	allowance	for	loan	losses	are	recorded	in	the	provision	for	credit losses	on	the	Firm's	Consolidated	statements	of	income.	See	Note	15	for	further information	on	the	Firm's	accounting	policies	for	the	allowance	for	loan	losses.

# Charge-offs

Consumer	loans,	other	than	risk-rated	business	banking,	risk-rated	auto	and	PCI loans,	are	generally	charged	off	or	charged	down	to	the	net	realizable	value	of	the underlying	collateral	(i.e.,	fair	value	less	costs	to	sell),	with	an	offset	to	the allowance	for	loan	losses,	upon	reaching	specified	stages	of	delinquency	in accordance	with	standards	established	by	the	Federal	Financial	Institutions Examination	Council	("FFIEC").	Residential	real	estate	loans,	non-modified credit	card	loans	and	scored	business	banking	loans	are	generally	charged	off	at 180	days	past	due.	Auto	and	student	loans	are	charged	off	no	later	than	120	days past	due,	and	modified	credit	card	loans	are	charged	off	at	120	days	past	due.

Certain	consumer	loans	will	be	charged	off	earlier	than	the	FFIEC	charge-off standards	in	certain	circumstances	as	follows:

•A	charge-off	is	recognized	when	a	loan	is	modified	in	a	troubled	debt restructuring	("TDR")	if	the	loan	is	determined	to	be	collateral-dependent.	A loan	is	considered	to	be	collateral-dependent	when	repayment	of	the	loan	is expected	to	be	provided	solely	by	the	underlying	collateral,	rather	than	by cash	flows	from	the	borrower's	operations,	income	or	other	resources.

•Loans	to	borrowers	who	have	experienced	an	event	(e.g.,	bankruptcy)	that suggests	a	loss	is	either	known	or	highly	certain	are	subject	to	accelerated charge-off	standards.	Residential	real	estate	and	auto	loans	are	charged	off when	the	loan	becomes	60	days	past	due,	or	sooner	if	the	loan	is	determined to	be	collateral-

dependent.	Credit	card	and	scored	business	banking	loans	are	charged	off within	60	days	of	receiving	notification	of	the	bankruptcy	filing	or	other event.	Student	loans	are	generally	charged	off	when	the	loan	becomes	60 days	past	due	after	receiving	notification	of	a	bankruptcy.

•Auto	loans	are	written	down	to	net	realizable	value	upon	repossession	of	the automobile	and	after	a	redemption	period	(i.e.,	the	period	during	which	a borrower	may	cure	the	loan)	has	passed.

Other	than	in	certain	limited	circumstances,	the	Firm	typically	does	not recognize	charge-offs	on	government-guaranteed	loans.

Wholesale	loans,	risk-rated	business	banking	loans	and	risk-rated	auto	loans	are charged	off	when	it	is	highly	certain	that	a	loss	has	been	realized,	including situations	where	a	loan	is	determined	to	be	both	impaired	and	collateral- dependent.	The	determination	of	whether	to	recognize	a	charge-off	includes many	factors,	including	the	prioritization	of	the	Firm's	claim	in	bankruptcy, expectations	of	the	workout/restructuring	of	the	loan	and	valuation	of	the borrower's	equity	or	the	loan	collateral.

When	a	loan	is	charged	down	to	the	estimated	net	realizable	value,	the determination	of	the	fair	value	of	the	collateral	depends	on	the	type	of	collateral (e.g.,	securities,	real	estate).	In	cases	where	the	collateral	is	in	the	form	of	liquid securities,	the	fair	value	is	based	on	quoted	market	prices	or	broker	quotes.	For illiquid	securities	or	other	financial	assets,	the	fair	value	of	the	collateral	is estimated	using	a	discounted	cash	flow	model.

For	residential	real	estate	loans,	collateral	values	are	based	upon	external valuation	sources.	When	it	becomes	likely	that	a	borrower	is	either	unable	or unwilling	to	pay,	the	Firm	obtains	a	broker's	price	opinion	of	the	home	based	on an	exterior-only	valuation	("exterior	opinions"),	which	is	then	updated	at	least every	six	months	thereafter.	As	soon	as	practicable	after	the	Firm	receives	the property	in	satisfaction	of	a	debt	(e.g.,	by	taking	legal	title	or	physical possession),	generally,	either	through	foreclosure	or	upon	the	execution	of	a deed	in	lieu	of	foreclosure	transaction	with	the	borrower,	the	Firm	obtains	an appraisal	based	on	an	inspection	that	includes	the	interior	of	the	home	("interior appraisals").	Exterior	opinions	and	interior	appraisals	are	discounted	based	upon the	Firm's	experience	with	actual	liquidation	values	as	compared	with	the estimated	values	provided	by	exterior	opinions	and	interior	appraisals, considering	state-	and	product-specific	factors.

For	commercial	real	estate	loans,	collateral	values	are	generally	based	on appraisals	from	internal	and	external	valuation	sources.	Collateral	values	are typically	updated	every	six	to	twelve	months,	either	by	obtaining	a	new	appraisal or	by	performing	an	internal	analysis,	in	accordance	with	the	Firm's	policies. The	Firm	also	considers	both	borrower-	and	market-specific	factors,	which	may result	in	obtaining	appraisal	updates	or	broker	price	opinions	at	more	frequent intervals.

Held-for-sale	loans	are	measured	at	the	lower	of	cost	or	fair	value,	with	valuation changes	recorded	in	noninterest	revenue.	For	consumer	loans,	the	valuation	is performed	on	a	portfolio	basis.	For	wholesale	loans,	the	valuation	is	performed on	an	individual	loan	basis.

Interest	income	on	loans	held-for-sale	is	accrued	and	recognized	based	on	the contractual	rate	of	interest.

Loan	origination	fees	or	costs	and	purchase	price	discounts	or	premiums	are deferred	in	a	contra	loan	account	until	the	related	loan	is	sold.	The	deferred	fees and	discounts	or	premiums	are	an	adjustment	to	the	basis	of	the	loan	and therefore	are	included	in	the	periodic	determination	of	the	lower	of	cost	or	fair value	adjustments	and/or	the	gain	or	loss	recognized	at	the	time	of	sale.

Held-for-sale	loans	are	subject	to	the	nonaccrual	policies	described	above.

Because	held-for-sale	loans	are	recognized	at	the	lower	of	cost	or	fair	value,	the Firm's	allowance	for	loan	losses	and	charge-off	policies	do	not	apply	to	these loans.

Loans	used	in	a	market-making	strategy	or	risk	managed	on	a	fair	value	basis	are measured	at	fair	value,	with	changes	in	fair	value	recorded	in	noninterest revenue.

For	these	loans,	the	earned	current	contractual	interest	payment	is	recognized	in interest	income.	Changes	in	fair	value	are	recognized	in	noninterest	revenue. Loan	origination	fees	are	recognized	upfront	in	noninterest	revenue.	Loan origination	costs	are	recognized	in	the	associated	expense	category	as	incurred.

Because	these	loans	are	recognized	at	fair	value,	the	Firm's	allowance	for	loan losses	and	charge-off	policies	do	not	apply	to	these	loans.

See	Note	4	for	further	information	on	the	Firm's	elections	of	fair	value accounting	under	the	fair	value	option.	See	Note	3	and	Note	4	for	further information	on	loans	carried	at	fair	value	and	classified	as	trading	assets.

PCI	loans	held-for-investment	are	initially	measured	at	fair	value.	PCI	loans have	evidence	of	credit	deterioration	since	the	loan's	origination	date	and therefore	it	is	probable,	at	acquisition,	that	all	contractually	required	payments will	not	be	collected.	Because	PCI	loans	are	initially	measured	at	fair	value, which	includes	an	estimate	of	future	credit	losses,	no	allowance	for	loan	losses related	to	PCI	loans	is	recorded	at	the	acquisition	date.	See	page	255	of	this	Note for	information	on	accounting	for	PCI	loans	subsequent	to	their	acquisition.

# Loan	classification	changes

Loans	in	the	held-for-investment	portfolio	that	management	decides	to	sell	are transferred	to	the	held-for-sale	portfolio	at	the	lower	of	cost	or	fair	value	on	the date	of	transfer.	Credit-related	losses	are	charged	against	the	allowance	for	loan losses;	non-credit	related	losses	such	as	those	due	to	changes	in	interest	rates	or foreign	currency	exchange	rates	are	recognized	in	noninterest	revenue.

In	the	event	that	management	decides	to	retain	a	loan	in	the	held-for-sale portfolio,	the	loan	is	transferred	to	the	held-for-investment	portfolio	at	the	lower of	cost	or	fair	value	on	the	date	of	transfer.	These	loans	are	subsequently	assessed for	impairment	based	on	the	Firm's	allowance	methodology.	For	a	further discussion	of	the	methodologies	used	in	establishing	the	Firm's	allowance	for loan	losses,	see	Note	15.

# Loan	modifications

The	Firm	seeks	to	modify	certain	loans	in	conjunction	with	its	loss-mitigation activities.	Through	the	modification,	JPMorgan	Chase	grants	one	or	more concessions	to	a	borrower	who	is	experiencing	financial	difficulty	in	order	to minimize	the	Firm's	economic	loss,	avoid	foreclosure	or	repossession	of	the collateral,	and	to	ultimately	maximize	payments	received	by	the	Firm	from	the borrower.	The	concessions	granted	vary	by	program	and	by	borrower-specific characteristics,	and	may	include	interest	rate	reductions,	term	extensions, payment	deferrals,	principal	forgiveness,	or	the	acceptance	of	equity	or	other assets	in	lieu	of	payments.

Such	modifications	are	accounted	for	and	reported	as	TDRs.	A	loan	that	has been	modified	in	a	TDR	is	generally	considered	to	be	impaired	until	it	matures, is	repaid,	or	is	otherwise	liquidated,	regardless	of	whether	the	borrower	performs under	the	modified	terms.	In	certain	limited	cases,	the	effective	interest	rate applicable	to	the	modified	loan	is	at	or	above	the	current	market	rate	at	the	time of	the	restructuring.	In	such	circumstances,	and	assuming	that	the	loan subsequently	performs	under	its	modified	terms	and	the	Firm	expects	to	collect all	contractual	principal	and	interest	cash	flows,	the	loan	is	disclosed	as	impaired and	as	a	TDR	only	during	the	year	of	the	modification;	in	subsequent	years,	the loan	is	not	disclosed	as	an	impaired	loan	or	as	a	TDR	so	long	as	repayment	of	the restructured	loan	under	its	modified	terms	is	reasonably	assured.

Loans,	except	for	credit	card	loans,	modified	in	a	TDR	are	generally	placed	on nonaccrual	status,	although	in	many	cases	such	loans	were	already	on	nonaccrual status	prior	to	modification.	These	loans	may	be	returned	to	performing	status (the	accrual	of	interest	is	resumed)	if	the	following	criteria	are	met:	(a)	the borrower	has	performed	under	the	modified	terms	for	a	minimum	of	six	months and/or	six	payments,	and	(b)	the	Firm	has	an	expectation	that	repayment	of	the modified	loan	is	reasonably	assured	based	on,	for	example,	the	borrower's	debt capacity	and	level	of	future	earnings,	collateral	values,	loan-to-value	("LTV") ratios,	and	other	current	market	considerations.	In	certain	limited	and	well- defined	circumstances	in	which	the	loan	is	current	at	the	modification	date,	such loans	are	not	placed	on	nonaccrual	status	at	the	time	of	modification.

Because	loans	modified	in	TDRs	are	considered	to	be	impaired,	these	loans	are measured	for	impairment	using	the	Firm's	established	asset-specific	allowance methodology,	which	considers	the	expected	re-default	rates	for	the	modified loans.	A	loan	modified	in	a	TDR	generally	remains	subject	to	the	asset-specific allowance	methodology	throughout	its	remaining	life,	regardless	of	whether	the loan	is	performing	and	has	been	returned	to	accrual	status	and/or	the	loan	has been	removed	from	the	impaired	loans	disclosures	(i.e.,	loans	restructured	at market	rates).	For	further	discussion	of	the	methodology	used	to	estimate	the Firm's	asset-specific	allowance,	see	Note	15.

# Foreclosed	property

The	Firm	acquires	property	from	borrowers	through	loan	restructurings, workouts,	and	foreclosures.	Property	acquired	may	include	real	property	(e.g., residential	real	estate,	land,	and	buildings)	and	commercial	and	personal	property (e.g.,	automobiles,	aircraft,	railcars,	and	ships).

The	Firm	recognizes	foreclosed	property	upon	receiving	assets	in	satisfaction	of a	loan	(e.g.,	by	taking	legal	title	or	physical	possession).	For	loans	collateralized by	real	property,	the	Firm	generally	recognizes	the	asset	received	at	foreclosure sale	or	upon	the	execution	of	a	deed	in	lieu	of	foreclosure	transaction	with	the borrower.	Foreclosed	assets	are	reported	in	other	assets	on	the	Consolidated balance	sheets	and	initially	recognized	at	fair	value	less	costs	to	sell.	Each quarter	the	fair	value	of	the	acquired	property	is	reviewed	and	adjusted,	if necessary,	to	the	lower	of	cost	or	fair	value.	Subsequent	adjustments	to	fair	value are	charged/credited	to	noninterest	revenue.	Operating	expense,	such	as	real estate	taxes	and	maintenance,	are	charged	to	other	expense.

# Loan	portfolio

The	Firm's	loan	portfolio	is	divided	into	three	portfolio	segments,	which	are	the	same	segments	used	by	the	Firm	to	determine	the	allowance	for	loan	losses:	Consumer, excluding	credit	card;	Credit	card;	and	Wholesale.	Within	each	portfolio	segment,	the	Firm	monitors	and	assesses	the	credit	risk	in	the	following	classes	of	loans,	based on	the	risk	characteristics	of	each	loan	class:

Residential	real	estate	–	excluding	PCI •	Credit	card	loans •	Commercial	and	industrial

•	Home	equity	–	senior	lien

•	Home	equity	–	junior	lien

•	Prime	mortgage,	including

•	Real	estate

•	Financial	institutions

•	Government	agencies

•	Option	ARMs

(a) Includes	loans	held	in	CCB,	prime	mortgage	and	home	equity	loans	held	in	AM	and	prime	mortgage	loans	held	in	Corporate.

(b) Includes	certain	business	banking	and	auto	dealer	risk-rated	loans	that	apply	the	wholesale	methodology	for	determining	the	allowance	for	loan	losses;	these	loans	are	managed	by	CCB,	and therefore,	for	consistency	in	presentation,	are	included	with	the	other	consumer	loan	classes.

(c) Includes	loans	held	in	CIB,	CB,	AM	and	Corporate.	Excludes	prime	mortgage	and	home	equity	loans	held	in	AM	and	prime	mortgage	loans	held	in	Corporate.	Classes	are	internally	defined	and may	not	align	with	regulatory	definitions.

(d) Includes	loans	to:	individuals;	SPEs;	holding	companies;	and	private	education	and	civic	organizations.	For	more	information	on	exposures	to	SPEs,	see	Note	16.

The	following	tables	summarize	the	Firm's	loan	balances	by	portfolio	segment.

(a) Includes	billed	finance	charges	and	fees	net	of	an	allowance	for	uncollectible	amounts.

(b) Loans	(other	than	PCI	loans	and	those	for	which	the	fair	value	option	has	been	elected)	are	presented	net	of	unearned	income,	unamortized	discounts	and	premiums,	and	net	deferred	loan	costs. These	amounts	were	not	material	as	of	December	31,	2015	and	2014.

The	following	tables	provide	information	about	the	carrying	value	of	retained	loans	purchased,	sold	and	reclassified	to	held-for-sale	during	the	periods	indicated.	These tables	exclude	loans	recorded	at	fair	value.	The	Firm	manages	its	exposure	to	credit	risk	on	an	ongoing	basis.	Selling	loans	is	one	way	that	the	Firm	reduces	its	credit exposures.

(a) Purchases	predominantly	represent	the	Firm's	voluntary	repurchase	of	certain	delinquent	loans	from	loan	pools	as	permitted	by	Ginnie	Mae	guidelines.	The	Firm	typically	elects	to	repurchase these	delinquent	loans	as	it	continues	to	service	them	and/or	manage	the	foreclosure	process	in	accordance	with	applicable	requirements	of	Ginnie	Mae,	the	Federal	Housing	Administration ("FHA"),	Rural	Housing	Services	("RHS")	and/or	the	U.S.	Department	of	Veterans	Affairs	("VA").

(b) Excludes	purchases	of	retained	loans	sourced	through	the	correspondent	origination	channel	and	underwritten	in	accordance	with	the	Firm's	standards.	Such	purchases	were	$50.3	billion,	$15.1 billion	and	$5.7	billion	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.

(c) Prior	period	amounts	have	been	revised	to	conform	with	current	period	presentation.

The	following	table	provides	information	about	gains	and	losses,	including	lower	of	cost	or	fair	value	adjustments,	on	loan	sales	by	portfolio	segment.

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Net\tgains/(losses)\ton\tsales\tof\tloans\t(including\tlower\tof\tcost\tor\tfair\tvalue\tadjustments) (a) |  |  |  |
| Consumer,\texcluding\tcredit\tcard | $305 | $341 | $313 |
| Credit\tcard | 1 | (241) | 3 |
| Wholesale | 34 | 101 | (76) |
| Total\tnet\tgains\ton\tsales\tof\tloans\t(including\tlower\tof\tcost\tor\tfair\tvalue\tadjustments) | $340 | $201 | $240 |

(a) Excludes	sales	related	to	loans	accounted	for	at	fair	value.

# Consumer,	excluding	credit	card,	loan	portfolio

Consumer	loans,	excluding	credit	card	loans,	consist	primarily	of	residential mortgages,	home	equity	loans	and	lines	of	credit,	auto	loans,	business	banking loans,	and	student	and	other	loans,	with	a	focus	on	serving	the	prime	consumer credit	market.	The	portfolio	also	includes	home	equity	loans	secured	by	junior liens,	prime	mortgage	loans	with	an	interest-only	payment	period,	and	certain payment-option	loans	originated	by	Washington	Mutual	that	may	result	in negative	amortization.

The	table	below	provides	information	about	retained	consumer	loans,	excluding credit	card,	by	class.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Residential\treal\testate\t–\texcluding\tPCI |  |  |
| Home\tequity: |  |  |
| Senior\tlien | $14,848 | $16,367 |
| Junior\tlien | 30,711 | 36,375 |
| Mortgages: |  |  |
| Prime,\tincluding\toption\tARMs | 162,549 | 104,921 |
| Subprime | 3,690 | 5,056 |
| Other\tconsumer\tloans |  |  |
| Auto | 60,255 | 54,536 |
| Business\tbanking | 21,208 | 20,058 |
| Student\tand\tother | 10,096 | 10,970 |
| Residential\treal\testate\t–\tPCI |  |  |
| Home\tequity | 14,989 | 17,095 |
| Prime\tmortgage | 8,893 | 10,220 |
| Subprime\tmortgage | 3,263 | 3,673 |
| Option\tARMs | 13,853 | 15,708 |
| Total\tretained\tloans | $344,355 | $294,979 |

Delinquency	rates	are	a	primary	credit	quality	indicator	for	consumer	loans. Loans	that	are	more	than	30	days	past	due	provide	an	early	warning	of	borrowers who	may	be	experiencing	financial	difficulties	and/or	who	may	be	unable	or unwilling	to	repay	the	loan.	As	the	loan	continues	to	age,	it	becomes	more	clear that	the	borrower	is	likely	either	unable	or	unwilling	to	pay.	In	the	case	of residential	real	estate	loans,	late-stage	delinquencies	(greater	than	150	days	past due)	are	a	strong	indicator	of	loans	that	will	ultimately	result	in	a	foreclosure	or similar	liquidation	transaction.	In	addition	to	delinquency	rates,	other	credit quality	indicators	for	consumer	loans	vary	based	on	the	class	of	loan,	as	follows: •For	residential	real	estate	loans,	including	both	non-PCI	and	PCI	portfolios, the	current	estimated	LTV	ratio,	or	the	combined	LTV	ratio	in	the	case	of junior	lien	loans,	is	an	indicator	of	the	potential	loss	severity	in	the	event	of default.	Additionally,	LTV	or	combined	LTV	can	provide

insight	into	a	borrower's	continued	willingness	to	pay,	as	the	delinquency	rate of	high-LTV	loans	tends	to	be	greater	than	that	for	loans	where	the	borrower has	equity	in	the	collateral.	The	geographic	distribution	of	the	loan	collateral also	provides	insight	as	to	the	credit	quality	of	the	portfolio,	as	factors	such	as the	regional	economy,	home	price	changes	and	specific	events	such	as	natural disasters,	will	affect	credit	quality.	The	borrower's	current	or	"refreshed" FICO	score	is	a	secondary	credit-quality	indicator	for	certain	loans,	as	FICO scores	are	an	indication	of	the	borrower's	credit	payment	history.	Thus,	a loan	to	a	borrower	with	a	low	FICO	score	(660	or	below)	is	considered	to	be of	higher	risk	than	a	loan	to	a	borrower	with	a	high	FICO	score.	Further,	a loan	to	a	borrower	with	a	high	LTV	ratio	and	a	low	FICO	score	is	at	greater risk	of	default	than	a	loan	to	a	borrower	that	has	both	a	high	LTV	ratio	and	a high	FICO	score.

•For	scored	auto,	scored	business	banking	and	student	loans,	geographic distribution	is	an	indicator	of	the	credit	performance	of	the	portfolio.	Similar to	residential	real	estate	loans,	geographic	distribution	provides	insights	into the	portfolio	performance	based	on	regional	economic	activity	and	events. •Risk-rated	business	banking	and	auto	loans	are	similar	to	wholesale	loans	in that	the	primary	credit	quality	indicators	are	the	risk	rating	that	is	assigned	to the	loan	and	whether	the	loans	are	considered	to	be	criticized	and/or nonaccrual.	Risk	ratings	are	reviewed	on	a	regular	and	ongoing	basis	by Credit	Risk	Management	and	are	adjusted	as	necessary	for	updated information	about	borrowers'	ability	to	fulfill	their	obligations.	For	further information	about	risk-rated	wholesale	loan	credit	quality	indicators,	see pages	259–260	of	this	Note.

# Residential	real	estate	—	excluding	PCI	loans

The	following	table	provides	information	by	class	for	residential	real	estate	— excluding	retained	PCI	loans	in	the	consumer,	excluding	credit	card,	portfolio segment.

The	following	factors	should	be	considered	in	analyzing	certain	credit	statistics applicable	to	the	Firm's	residential	real	estate	—	excluding	PCI	loans	portfolio: (i)	junior	lien	home	equity	loans	may	be	fully	charged	off	when	the	loan becomes	180	days	past	due,	and	the	value	of	the	collateral	does	not	support	the repayment	of	the	loan,	resulting	in	relatively	high	charge-off	rates	for	this product	class;	and	(ii)	the	lengthening	of	loss-mitigation	timelines	may	result	in higher	delinquency	rates	for	loans	carried	at	the	net	realizable	value	of	the collateral	that	remain	on	the	Firm's	Consolidated	balance	sheets.

|  |  | Home	equity(i) |  |  |  | Mortgages |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Senior\tlien |  | Junior\tlien |  | Prime,\tincluding\toption\tARMs(i) | Prime,\tincluding\toption\tARMs(i) | Subprime |  | Total\tresidential\treal\testate\t–\nexcluding\tPCI | Total\tresidential\treal\testate\t–\nexcluding\tPCI |
| December\t31,\n(in\tmillions,\texcept\tratios) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Loan\tdelinquency(a) |  |  |  |  |  |  |  |  |  |  |
| Current | $14,278 | $15,730 | $30,021 | $35,575 | $153,323 | $93,951 | $3,140 | $4,296 | $200,762 | $149,552 |
| 30–149\tdays\tpast\tdue | 238 | 275 | 470 | 533 | 3,666 | 4,091 | 376 | 489 | 4,750 | 5,388 |
| 150\tor\tmore\tdays\tpast\tdue | 332 | 362 | 220 | 267 | 5,560 | 6,879 | 174 | 271 | 6,286 | 7,779 |
| Total\tretained\tloans | $14,848 | $16,367 | $30,711 | $36,375 | $162,549 | $104,921 | $3,690 | $5,056 | $211,798 | $162,719 |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tretained\tloans(b) | 3.84% | 3.89% | 2.25% | 2.20% | 0.71% | 1.42% | 14.91% | 15.03% | 1.40% | 2.27% |
| 90\tor\tmore\tdays\tpast\tdue\tand\tgovernment\nguaranteed(c) | — | — | — | — | 6,056 | 7,544 | — | — | 6,056 | 7,544 |
| Nonaccrual\tloans | 867 | 938 | 1,324 | 1,590 | 1,752 | 2,190 | 751 | 1,036 | 4,694 | 5,754 |
| Current\testimated\tLTV\tratios(d)(e)(f)(g) |  |  |  |  |  |  |  |  |  |  |
| Greater\tthan\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | $42 | $37 | $123 | $252 | $56 | $97 | $2 | $4 | $223 | $390 |
| Less\tthan\t660 | 3 | 6 | 29 | 65 | 65 | 72 | 12 | 28 | 109 | 171 |
| 101%\tto\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 50 | 83 | 1,294 | 2,105 | 249 | 478 | 25 | 76 | 1,618 | 2,742 |
| Less\tthan\t660 | 23 | 40 | 411 | 651 | 190 | 282 | 101 | 207 | 725 | 1,180 |
| 80%\tto\t100%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 311 | 466 | 4,226 | 5,849 | 3,013 | 2,686 | 146 | 382 | 7,696 | 9,383 |
| Less\tthan\t660 | 142 | 206 | 1,267 | 1,647 | 597 | 838 | 399 | 703 | 2,405 | 3,394 |
| Less\tthan\t80%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 11,721 | 12,588 | 17,927 | 19,435 | 140,942 | 82,350 | 1,299 | 1,624 | 171,889 | 115,997 |
| Less\tthan\t660 | 1,942 | 2,184 | 2,992 | 3,326 | 5,280 | 4,872 | 1,517 | 1,795 | 11,731 | 12,177 |
| No\tFICO/LTV\tavailable | 614 | 757 | 2,442 | 3,045 | 1,469 | 1,136 | 189 | 237 | 4,714 | 5,175 |
| U.S.\tgovernment-guaranteed | — | — | — | — | 10,688 | 12,110 | — | — | 10,688 | 12,110 |
| Total\tretained\tloans | $14,848 | $16,367 | $30,711 | $36,375 | $162,549 | $104,921 | $3,690 | $5,056 | $211,798 | $162,719 |
| Geographic\tregion |  |  |  |  |  |  |  |  |  |  |
| California | $2,072 | $2,232 | $6,873 | $8,144 | $46,745 | $28,133 | $518 | $718 | $56,208 | $39,227 |
| New\tYork | 2,583 | 2,805 | 6,564 | 7,685 | 20,941 | 16,550 | 521 | 677 | 30,609 | 27,717 |
| Illinois | 1,189 | 1,306 | 2,231 | 2,605 | 11,379 | 6,654 | 145 | 207 | 14,944 | 10,772 |
| Texas | 1,581 | 1,845 | 951 | 1,087 | 8,986 | 4,935 | 142 | 177 | 11,660 | 8,044 |
| Florida | 797 | 861 | 1,612 | 1,923 | 6,763 | 5,106 | 414 | 632 | 9,586 | 8,522 |
| New\tJersey | 647 | 654 | 1,943 | 2,233 | 5,395 | 3,361 | 172 | 227 | 8,157 | 6,475 |
| Washington | 442 | 506 | 1,009 | 1,216 | 4,097 | 2,410 | 79 | 109 | 5,627 | 4,241 |
| Arizona | 815 | 927 | 1,328 | 1,595 | 3,081 | 1,805 | 74 | 112 | 5,298 | 4,439 |
| Michigan | 650 | 736 | 700 | 848 | 1,866 | 1,203 | 79 | 121 | 3,295 | 2,908 |
| Ohio | 1,014 | 1,150 | 638 | 778 | 1,166 | 615 | 81 | 112 | 2,899 | 2,655 |
| All\tother(h) | 3,058 | 3,345 | 6,862 | 8,261 | 52,130 | 34,149 | 1,465 | 1,964 | 63,515 | 47,719 |
| Total\tretained\tloans | $14,848 | $16,367 | $30,711 | $36,375 | $162,549 | $104,921 | $3,690 | $5,056 | $211,798 | $162,719 |

(a) Individual	delinquency	classifications	include	mortgage	loans	insured	by	U.S.	government	agencies	as	follows:	current	included	$2.6	billion	and	$2.6	billion;	30–149	days	past	due	included	$3.2	billion	and	$3.5	billion;	and	150	or	more days	past	due	included	$4.9	billion	and	$6.0	billion	at	December	31,	2015	and	2014,	respectively.

(b) At	December	31,	2015	and	2014,	Prime,	including	option	ARMs	loans	excluded	mortgage	loans	insured	by	U.S.	government	agencies	of	$8.1	billion	and	$9.5	billion,	respectively.	These	amounts	have	been	excluded	from	nonaccrual	loans based	upon	the	government	guarantee.

(c) These	balances,	which	are	90	days	or	more	past	due,	were	excluded	from	nonaccrual	loans	as	the	loans	are	guaranteed	by	U.S	government	agencies.	Typically	the	principal	balance	of	the	loans	is	insured	and	interest	is	guaranteed	at	a specified	reimbursement	rate	subject	to	meeting	agreed-upon	servicing	guidelines.	At	December	31,	2015	and	2014,	these	balances	included	$3.4	billion	and	$4.2	billion,	respectively,	of	loans	that	are	no	longer	accruing	interest	based	on	the agreed-upon	servicing	guidelines.	For	the	remaining	balance,	interest	is	being	accrued	at	the	guaranteed	reimbursement	rate.	There	were	no	loans	not	guaranteed	by	U.S.	government	agencies	that	are	90	or	more	days	past	due	and	still accruing	at	December	31,	2015	and	2014.

(d) Represents	the	aggregate	unpaid	principal	balance	of	loans	divided	by	the	estimated	current	property	value.	Current	property	values	are	estimated,	at	a	minimum,	quarterly,	based	on	home	valuation	models	using	nationally	recognized	home price	index	valuation	estimates	incorporating	actual	data	to	the	extent	available	and	forecasted	data	where	actual	data	is	not	available.	These	property	values	do	not	represent	actual	appraised	loan	level	collateral	values;	as	such,	the	resulting ratios	are	necessarily	imprecise	and	should	be	viewed	as	estimates.	Effective	December	31,	2015,	the	current	estimated	LTV	ratios	reflect	updates	to	the	nationally	recognized	home	price	index	valuation	estimates	incorporated	into	the Firm's	home	valuation	models.	The	prior	period	ratios	have	been	revised	to	conform	with	these	updates	in	the	home	price	index.

(e) Junior	lien	represents	combined	LTV,	which	considers	all	available	lien	positions,	as	well	as	unused	lines,	related	to	the	property.	All	other	products	are	presented	without	consideration	of	subordinate	liens	on	the property.

(f) Refreshed	FICO	scores	represent	each	borrower's	most	recent	credit	score,	which	is	obtained	by	the	Firm	on	at	least	a	quarterly basis.

(g) The	current	period	current	estimated	LTV	ratios	disclosures	have	been	updated	to	reflect	where	either	the	FICO	score	or	estimated	property	value	is	unavailable.	The	prior	period	amounts	have	been	revised	to	conform	with	the	current presentation.

(h) At	December	31,	2015	and	2014,	included	mortgage	loans	insured	by	U.S.	government	agencies	of	$10.7	billion	and	$12.1	billion, respectively.

(i) Includes	residential	real	estate	loans	to	private	banking	clients	in	AM,	for	which	the	primary	credit	quality	indicators	are	the	borrower's	financial	position	and LTV.

The	following	table	represent	the	Firm's	delinquency	statistics	for	junior	lien	home	equity	loans	and	lines	as	of	December	31,	2015	and	2014.

| (in	millions,	except	ratios) | 2015 | 2014 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| HELOCs:(a) |  |  |  |  |
| Within\tthe\trevolving\tperiod(b) | $17,050 | 25,252 | 1.57% | 1.75% |
| Beyond\tthe\trevolving\tperiod | 11,252 | 7,979 | 3.10 | 3.16 |
| HELOANs | 2,409 | 3,144 | 3.03 | 3.34 |
| Total | $30,711 | 36,375 | 2.25% | 2.20% |

(a)	These	HELOCs	are	predominantly	revolving	loans	for	a 10-year	period,	after	which	time	the	HELOC	converts	to	a	loan	with	a 20-year	amortization	period,	but	also	include	HELOCs	originated	by	Washington	Mutual that	allow	interest-only	payments	beyond	the	revolving	period.

(b)	The	Firm	manages	the	risk	of	HELOCs	during	their	revolving	period	by	closing	or	reducing	the	undrawn	line	to	the	extent	permitted	by	law	when	borrowers	are	experiencing	financial	difficulty	or	when	the	collateral does	not	support	the	loan	amount.

Home	equity	lines	of	credit	("HELOCs")	beyond	the	revolving	period	and	home equity	loans	("HELOANs")	have	higher	delinquency	rates	than	do	HELOCs within	the	revolving	period.	That	is	primarily	because	the	fully-amortizing payment	that	is	generally	required	for	those	products	is	higher	than	the	minimum payment	options

available	for	HELOCs	within	the	revolving	period.	The	higher	delinquency	rates associated	with	amortizing	HELOCs	and	HELOANs	are	factored	into	the	loss estimates	produced	by	the	Firm's	delinquency	roll-rate	methodology,	which estimates	defaults	based	on	the	current	delinquency	status	of	a	portfolio.

# Impaired	loans

The	table	below	sets	forth	information	about	the	Firm's	residential	real	estate	impaired	loans,	excluding	PCI	loans.	These	loans	are	considered	to	be	impaired	as	they have	been	modified	in	a	TDR.	All	impaired	loans	are	evaluated	for	an	asset-specific	allowance	as	described	in	Note	15.

|  |  | Home	equity |  |  |  | Mortgages |  |  | Total	residential | Total	residential |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  |  | Prime,\tincluding |  |  |  | \treal\testate | \treal\testate |
| December\t31, | Senior\tlien |  | Junior\tlien | Junior\tlien | option\tARMs |  | Subprime | Subprime | –\texcluding\tPCI | –\texcluding\tPCI |
| (in\tmillions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Impaired\tloans |  |  |  |  |  |  |  |  |  |  |
| With\tan\tallowance | $557 | $552 | $736 | $722 | $3,850 | $4,949 | $1,393 | $2,239 | $6,536 | $8,462 |
| Without\tan\tallowance(a) | 491 | 549 | 574 | 582 | 976 | 1,196 | 471 | 639 | 2,512 | 2,966 |
| Total\timpaired\tloans(b)(c) | $1,048 | $1,101 | $1,310 | $1,304 | $4,826 | $6,145 | $1,864 | $2,878 | $9,048 | $11,428 |
| Allowance\tfor\tloan\tlosses\nrelated\tto\timpaired\tloans | $53 | $84 | $85 | $147 | $93 | $127 | $15 | $64 | $246 | $422 |
| Unpaid\tprincipal\tbalance\tof\nimpaired\tloans(d) | 1,370 | 1,451 | 2,590 | 2,603 | 6,225 | 7,813 | 2,857 | 4,200 | 13,042 | 16,067 |
| Impaired\tloans\ton\tnonaccrual\nstatus(e) | 581 | 628 | 639 | 632 | 1,287 | 1,559 | 670 | 931 | 3,177 | 3,750 |

(a) Represents	collateral-dependent	residential	mortgage	loans	that	are	charged	off	to	the	fair	value	of	the	underlying	collateral	less	cost	to	sell.	The	Firm	reports,	in	accordance	with	regulatory	guidance,	residential	real estate	loans	that	have	been	discharged	under	Chapter	7	bankruptcy	and	not	reaffirmed	by	the	borrower	("Chapter	7	loans")	as	collateral-dependent	nonaccrual	TDRs,	regardless	of	their	delinquency	status.	At December	31,	2015,	Chapter	7	residential	real	estate	loans	included	approximately	 17%	of	senior	lien	home	equity,	9%	of	junior	lien	home	equity,	 18%	of	prime	mortgages,	including	option	ARMs,	and 15%	of subprime	mortgages	that	were	30	days	or	more	past	due.

(b) At	December	31,	2015	and	2014,	$3.8	billion	and	$4.9	billion,	respectively,	of	loans	modified	subsequent	to	repurchase	from	Government	National	Mortgage	Association	("Ginnie	Mae")	in	accordance	with	the standards	of	the	appropriate	government	agency	(i.e.,	FHA,	VA,	RHS)	are	not	included	in	the	table	above.	When	such	loans	perform	subsequent	to	modification	in	accordance	with	Ginnie	Mae	guidelines,	they	are generally	sold	back	into	Ginnie	Mae	loan	pools.	Modified	loans	that	do	not	re-perform	become	subject	to	foreclosure.

(c) Predominantly	all	residential	real	estate	impaired	loans,	excluding	PCI	loans,	are	in	the	U.S.

(d) Represents	the	contractual	amount	of	principal	owed	at	 December	31,	2015	and	2014.	The	unpaid	principal	balance	differs	from	the	impaired	loan	balances	due	to	various	factors,	including	charge-offs,	net	deferred loan	fees	or	costs;	and	unamortized	discounts	or	premiums	on	purchased	loans.

(e) As	of	December	31,	2015	and	2014,	nonaccrual	loans	included	 $2.5	billion	and	$2.9	billion,	respectively,	of	TDRs	for	which	the	borrowers	were	less	than 90	days	past	due.	For	additional	information	about	loans modified	in	a	TDR	that	are	on	nonaccrual	status	refer	to	the	Loan	accounting	framework	on	pages	242–244	of	this	Note.

The	following	table	presents	average	impaired	loans	and	the	related	interest	income	reported	by	the	Firm.

| Year	ended	December	31,<br>(in	millions) | 2015 | Average	impaired	loans<br>2014 | 2013 | 2015 | Interest	income	on<br>impaired	loans(a)<br>2014 | 2013 | 2015 | Interest	income	on	impaired<br>loans	on	a	cash	basis(a)<br>2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Home\tequity |  |  |  |  |  |  |  |  |  |
| Senior\tlien | $1,077 | $1,122 | $1,151 | $51 | $55 | $59 | $35 | $37 | $40 |
| Junior\tlien | 1,292 | 1,313 | 1,297 | 77 | 82 | 82 | 50 | 53 | 55 |
| Mortgages |  |  |  |  |  |  |  |  |  |
| Prime,\tincluding\toption\tARMs | 5,397 | 6,730 | 7,214 | 217 | 262 | 280 | 46 | 54 | 59 |
| Subprime | 2,300 | 3,444 | 3,798 | 131 | 182 | 200 | 41 | 51 | 55 |
| Total\tresidential\treal\testate\t–\texcluding\tPCI | $10,066 | $12,609 | $13,460 | $476 | $581 | $621 | $172 | $195 | $209 |

(a) Generally,	interest	income	on	loans	modified	in	TDRs	is	recognized	on	a	cash	basis	until	such	time	as	the	borrower	has	made	a	minimum	of

six	payments	under	the	new	terms.

Modifications	of	residential	real	estate	loans,	excluding	PCI	loans,	are	generally accounted	for	and	reported	as	TDRs.	There	were	no	additional	commitments	to lend	to	borrowers	whose	residential	real	estate	loans,	excluding	PCI	loans,	have been	modified	in	TDRs.

The	following	table	presents	new	TDRs	reported	by	the	Firm.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Home\tequity: |  |  |  |
| Senior\tlien | $108 | $110 | $210 |
| Junior\tlien | 293 | 211 | 388 |
| Mortgages: |  |  |  |
| Prime,\tincluding\toption\tARMs | 209 | 287 | 770 |
| Subprime | 58 | 124 | 319 |
| Total\tresidential\treal\testate\t–\nexcluding\tPCI | $668 | $732 | $1,687 |

# Nature	and	extent	of	modifications

The	U.S.	Treasury's	Making	Home	Affordable	("MHA")	programs,	as	well	as	the	Firm's	proprietary	modification	programs,	generally	provide	various	concessions	to financially	troubled	borrowers	including,	but	not	limited	to,	interest	rate	reductions,	term	or	payment	extensions	and	deferral	of	principal	and/or	interest	payments	that would	otherwise	have	been	required	under	the	terms	of	the	original	agreement.

The	following	table	provides	information	about	how	residential	real	estate	loans,	excluding	PCI	loans,	were	modified	under	the	Firm's	loss	mitigation	programs	during the	periods	presented.	This	table	excludes	Chapter	7	loans	where	the	sole	concession	granted	is	the	discharge	of	debt.

|  |  |  | Home	equity |  |  |  |  |  | Mortgages |  |  |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Senior\tlien |  |  | Junior\tlien |  | Prime,\tincluding\noption\tARMs | Prime,\tincluding\noption\tARMs |  |  | Subprime |  | Total\tresidential\treal\testate | \t–\texcluding\tPCI |  |
| Year\tended\tDec.\t31, | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 |
| Number\tof\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| approved\tfor\ta\ttrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| modification | 1,345 | 939 | 1,719 | 2,588 | 626 | 884 | 1,103 | 1,052 | 2,846 | 1,608 | 2,056 | 4,233 | 6,644 | 4,673 | 9,682 |
| Number\tof\tloans\npermanently\tmodified | 1,096 | 1,171 | 1,765 | 3,200 | 2,813 | 5,040 | 1,495 | 2,507 | 4,356 | 1,650 | 3,141 | 5,364 | 7,441 | 9,632 | 16,525 |
| Concession\tgranted:(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest\trate\treduction | 75% | 53% | 70% | 63% | 84% | 88% | 72% | 43% | 73% | 71% | 47% | 72% | 68% | 58% | 77% |
| Term\tor\tpayment\nextension | 86 | 67 | 76 | 90 | 83 | 80 | 80 | 51 | 73 | 82 | 53 | 56 | 86 | 63 | 70 |
| Principal\tand/or\ninterest\tdeferred | 32 | 16 | 12 | 19 | 23 | 24 | 34 | 19 | 30 | 21 | 12 | 13 | 24 | 18 | 21 |
| Principal\tforgiveness | 4 | 36 | 38 | 8 | 22 | 32 | 24 | 51 | 38 | 31 | 53 | 48 | 16 | 41 | 39 |
| Other(b) | — | — | — | — | — | — | 9 | 10 | 23 | 13 | 10 | 14 | 5 | 6 | 11 |

(a) Represents	concessions	granted	in	permanent	modifications	as	a	percentage	of	the	number	of	loans	permanently	modified.	The	sum	of	the	percentages	exceeds 100%	because	predominantly	all	of	the	modifications include	more	than	one	type	of	concession.	A	significant	portion	of	trial	modifications	include	interest	rate	reductions	and/or	term	or	payment	extensions.

(b) Represents	variable	interest	rate	to	fixed	interest	rate	modifications.

# Financial	effects	of	modifications	and	redefaults

The	following	table	provides	information	about	the	financial	effects	of	the	various	concessions	granted	in	modifications	of	residential	real	estate	loans,	excluding	PCI, under	the	Firm's	loss	mitigation	programs	and	about	redefaults	of	certain	loans	modified	in	TDRs	for	the	periods	presented.	Because	the	specific	types	and	amounts	of concessions	offered	to	borrowers	frequently	change	between	the	trial	modification	and	the	permanent	modification,	the	following	table	presents	only	the	financial	effects of	permanent	modifications.	This	table	also	excludes	Chapter	7	loans	where	the	sole	concession	granted	is	the	discharge	of	debt.

| December	31, |  |  |  |  |  |  |  | Prime,	including |  |  |  |  | Total	residential	real	estate	–	excluding | Total	residential	real	estate	–	excluding | Total	residential	real	estate	–	excluding |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept |  | Senior\tlien |  |  | Junior\tlien |  |  | option\tARMs |  |  | Subprime |  |  | PCI |  |
| weighted-average\tdata |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| and\tnumber\tof\tloans) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| interest\trate\tof\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| with\tinterest\trate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| reductions\t–\tbefore |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 5.69% | 6.38% | 6.35% | 4.93% | 4.81% | 5.05% | 5.03% | 4.82% | 5.28% | 6.67% | 7.16% | 7.33% | 5.51% | 5.61% | 5.88% |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| interest\trate\tof\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| with\tinterest\trate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| reductions\t–\tafter |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 2.70 | 3.03 | 3.23 | 2.17 | 2.00 | 2.14 | 2.55 | 2.69 | 2.77 | 3.15 | 3.37 | 3.52 | 2.64 | 2.78 | 2.92 |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| remaining |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| contractual\tterm\t(in |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| years)\tof\tloans\twith |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| term\tor\tpayment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| extensions\t–\tbefore |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 17 | 17 | 19 | 18 | 19 | 20 | 25 | 25 | 25 | 24 | 24 | 24 | 22 | 23 | 23 |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| remaining |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| contractual\tterm\t(in |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| years)\tof\tloans\twith |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| term\tor\tpayment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| extensions\t–\tafter |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 32 | 30 | 31 | 36 | 35 | 34 | 37 | 37 | 37 | 36 | 36 | 35 | 36 | 36 | 36 |
| Charge-offs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| recognized\tupon |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| permanent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| modification | $1 | $2 | $7 | $3 | $25 | $70 | $9 | $9 | $16 | $2 | $3 | $5 | $15 | $39 | $98 |
| Principal\tdeferred | 13 | 5 | 7 | 14 | 11 | 24 | 41 | 39 | 129 | 17 | 19 | 43 | 85 | 74 | 203 |
| Principal\tforgiven | 2 | 14 | 30 | 4 | 21 | 51 | 34 | 83 | 206 | 32 | 89 | 218 | 72 | 207 | 505 |
| Balance\tof\tloans\tthat |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| redefaulted\twithin |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| one\tyear\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| permanent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| modification(a) | $14 | $19 | $26 | $7 | $10 | $20 | $75 | $121 | $164 | $58 | $93 | $106 | $154 | $243 | $316 |

(a) Represents	loans	permanently	modified	in	TDRs	that	experienced	a	payment	default	in	the	periods	presented,	and	for	which	the	payment	default	occurred	within one	year	of	the	modification.	The	dollar	amounts presented	represent	the	balance	of	such	loans	at	the	end	of	the	reporting	period	in	which	such	loans	defaulted.	For	residential	real	estate	loans	modified	in	TDRs,	payment	default	is	deemed	to	occur	when	the	loan becomes	two	contractual	payments	past	due.	In	the	event	that	a	modified	loan	redefaults,	it	is	probable	that	the	loan	will	ultimately	be	liquidated	through	foreclosure	or	another	similar	type	of	liquidation	transaction. Redefaults	of	loans	modified	within	the	last	12	months	may	not	be	representative	of	ultimate	redefault	levels.

At	December	31,	2015,	the	weighted-average	estimated	remaining	lives	of residential	real	estate	loans,	excluding	PCI	loans,	permanently	modified	in	TDRs were	10	years	for	senior	lien	home	equity,	9	years	for	junior	lien	home	equity,	10 years	for	prime	mortgages,	including	option	ARMs,	and	8	years	for	subprime mortgage.	The	estimated	remaining	lives	of	these	loans	reflect	estimated prepayments,	both	voluntary	and	involuntary	(i.e.,	foreclosures	and	other	forced liquidations).

# Active	and	suspended	foreclosure

At	December	31,	2015	and	2014,	the	Firm	had	non-PCI	residential	real	estate loans,	excluding	those	insured	by	U.S.	government	agencies,	with	a	carrying value	of	$1.2	billion	and	$1.5	billion,	respectively,	that	were	not	included	in REO,	but	were	in	the	process	of	active	or	suspended	foreclosure.

# Other	consumer	loans

The	table	below	provides	information	for	other	consumer	retained	loan	classes,	including	auto,	business	banking	and	student	loans.

| December	31, | Auto |  | Business	banking |  | Student	and	other |  | Total	other	consumer | Total	other	consumer |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratios) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 |  | 2014 |
| Loan\tdelinquency(a) |  |  |  |  |  |  |  |  |  |
| Current | $59,442 | $53,866 | $20,887 | $19,710 | $9,405 | $10,080 | $89,734 |  | $83,656 |
| 30–119\tdays\tpast\tdue | 804 | 663 | 215 | 208 | 445 | 576 | 1,464 |  | 1,447 |
| 120\tor\tmore\tdays\tpast\tdue | 9 | 7 | 106 | 140 | 246 | 314 | 361 |  | 461 |
| Total\tretained\tloans | $60,255 | $54,536 | $21,208 | $20,058 | $10,096 | $10,970 | $91,559 |  | $85,564 |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tretained\nloans | 1.35% | 1.23% | 1.51% | 1.73% | 1.63% (d) | 2.15% (d) | 1.42% | (d) | 1.47% |
| 90\tor\tmore\tdays\tpast\tdue\tand\tstill\naccruing\t(b) | $— | $— | $— | $— | $290 | $367 | $290 |  | $367 |
| Nonaccrual\tloans | 116 | 115 | 263 | 279 | 242 | 270 | 621 |  | 664 |
| Geographic\tregion |  |  |  |  |  |  |  |  |  |
| California | $7,186 | $6,294 | $3,530 | $3,008 | $1,051 | $1,143 | $11,767 |  | $10,445 |
| New\tYork | 3,874 | 3,662 | 3,359 | 3,187 | 1,224 | 1,259 | 8,457 |  | 8,108 |
| Illinois | 3,678 | 3,175 | 1,459 | 1,373 | 679 | 729 | 5,816 |  | 5,277 |
| Texas | 6,457 | 5,608 | 2,622 | 2,626 | 839 | 868 | 9,918 |  | 9,102 |
| Florida | 2,843 | 2,301 | 941 | 827 | 516 | 521 | 4,300 |  | 3,649 |
| New\tJersey | 1,998 | 1,945 | 500 | 451 | 366 | 378 | 2,864 |  | 2,774 |
| Washington | 1,135 | 1,019 | 264 | 258 | 212 | 235 | 1,611 |  | 1,512 |
| Arizona | 2,033 | 2,003 | 1,205 | 1,083 | 236 | 239 | 3,474 |  | 3,325 |
| Michigan | 1,550 | 1,633 | 1,361 | 1,375 | 415 | 466 | 3,326 |  | 3,474 |
| Ohio | 2,340 | 2,157 | 1,363 | 1,354 | 559 | 629 | 4,262 |  | 4,140 |
| All\tother | 27,161 | 24,739 | 4,604 | 4,516 | 3,999 | 4,503 | 35,764 |  | 33,758 |
| Total\tretained\tloans | $60,255 | $54,536 | $21,208 | $20,058 | $10,096 | $10,970 | $91,559 |  | $85,564 |
| Loans\tby\trisk\tratings(c) |  |  |  |  |  |  |  |  |  |
| Noncriticized | $11,277 | $9,822 | $15,505 | $14,619 | NA | NA | $26,782 |  | $24,441 |
| Criticized\tperforming | 76 | 35 | 815 | 708 | NA | NA | 891 |  | 743 |
| Criticized\tnonaccrual | — | — | 210 | 213 | NA | NA | 210 |  | 213 |

(a) Student	loan	delinquency	classifications	included	loans	insured	by	U.S.	government	agencies	under	the	Federal	Family	Education	Loan	Program	("FFELP")	as	follows:	current	included	$3.8	billion	and	$4.3	billion;	30-119	days	past	due included	$299	million	and	$364	million;	and	120	or	more	days	past	due	included	$227	million	and	$290	million	at	December	31,	2015	and	2014,	respectively.

(b) These	amounts	represent	student	loans,	which	are	insured	by	U.S.	government	agencies	under	the	FFELP.	These	amounts	were	accruing	as	reimbursement	of	insured	amounts	is	proceeding normally.

(c) For	risk-rated	business	banking	and	auto	loans,	the	primary	credit	quality	indicator	is	the	risk	rating	of	the	loan,	including	whether	the	loans	are	considered	to	be	criticized	and/or nonaccrual.

(d) December	31,	2015	and	2014,	excluded	loans	30	days	or	more	past	due	and	still	accruing,	which	are	insured	by	U.S.	government	agencies	under	the	FFELP,	of	$526	million	and	$654	million,	respectively.	These	amounts	were	excluded	as reimbursement	of	insured	amounts	is	proceeding	normally.

# Other	consumer	impaired	loans	and	loan	modifications

The	table	below	sets	forth	information	about	the	Firm's	other	consumer	impaired loans,	including	risk-rated	business	banking	and	auto	loans	that	have	been	placed on	nonaccrual	status,	and	loans	that	have	been	modified	in	TDRs.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Impaired\tloans |  |  |
| With\tan\tallowance | $527 | $557 |
| Without\tan\tallowance(a) | 31 | 35 |
| Total\timpaired\tloans(b)(c) | $558 | $592 |
| Allowance\tfor\tloan\tlosses\trelated\tto\timpaired\tloans | $118 | $117 |
| Unpaid\tprincipal\tbalance\tof\timpaired\tloans(d) | 668 | 719 |
| Impaired\tloans\ton\tnonaccrual\tstatus | 449 | 456 |

(a) When	discounted	cash	flows,	collateral	value	or	market	price	equals	or	exceeds	the	recorded investment	in	the	loan,	the	loan	does	not	require	an	allowance.	This	typically	occurs	when	the impaired	loans	have	been	partially	charged	off	and/or	there	have	been	interest	payments	received	and applied	to	the	loan	balance.

(b) Predominantly	all	other	consumer	impaired	loans	are	in	the	U.S.

(c) Other	consumer	average	impaired	loans	were	 $566	million,	$599	million	and	$648	million	for	the

years	ended	December	31,	2015,	2014	and	2013,	respectively.	The	related	interest	income	on

impaired	loans,	including	those	on	a	cash	basis,	was	not	material	for	the	years	ended	December	31, 2015,	2014	and	2013.

(d) Represents	the	contractual	amount	of	principal	owed	at	 December	31,	2015	and	2014.	The	unpaid principal	balance	differs	from	the	impaired	loan	balances	due	to	various	factors,	including	charge-

offs;	interest	payments	received	and	applied	to	the	principal	balance;	net	deferred	loan	fees	or	costs;

and	unamortized	discounts	or	premiums	on	purchased	loans.

Certain	other	consumer	loan	modifications	are	considered	to	be	TDRs	as	they provide	various	concessions	to	borrowers	who	are	experiencing	financial difficulty.	All	of	these	TDRs	are	reported	as	impaired	loans	in	the	table	above.

The	following	table	provides	information	about	the	Firm's	other	consumer	loans modified	in	TDRs.	New	TDRs	were	not	material	for	the	years	ended	December 31,	2015	and	2014.

(a) The	impact	of	these	modifications	was	not	material	to	the	Firm	for	the	years	ended December	31, 2015	and	2014.

(b) Additional	commitments	to	lend	to	borrowers	whose	loans	have	been	modified	in	TDRs	as	of December	31,	2015	and	2014	were	immaterial.

# Purchased	credit-impaired	loans

PCI	loans	are	initially	recorded	at	fair	value	at	acquisition.	PCI	loans	acquired	in the	same	fiscal	quarter	may	be	aggregated	into	one	or	more	pools,	provided	that the	loans	have	common	risk	characteristics.	A	pool	is	then	accounted	for	as	a single	asset	with	a	single	composite	interest	rate	and	an	aggregate	expectation	of cash	flows.	With	respect	to	the	Washington	Mutual	transaction,	all	of	the consumer	PCI	loans	were	aggregated	into	pools	of	loans	with	common	risk characteristics.

On	a	quarterly	basis,	the	Firm	estimates	the	total	cash	flows	(both	principal	and interest)	expected	to	be	collected	over	the	remaining	life	of	each	pool.	These estimates	incorporate	assumptions	regarding	default	rates,	loss	severities,	the amounts	and	timing	of	prepayments	and	other	factors	that	reflect	then-current market	conditions.	Probable	decreases	in	expected	cash	flows	(i.e.,	increased credit	losses)	trigger	the	recognition	of	impairment,	which	is	then	measured	as the	present	value	of	the	expected	principal	loss	plus	any	related	foregone	interest cash	flows,	discounted	at	the	pool's	effective	interest	rate.	Impairments	are recognized	through	the	provision	for	credit	losses	and	an	increase	in	the allowance	for	loan	losses.	Probable	and	significant	increases	in	expected	cash flows	(e.g.,	decreased	credit	losses,	the	net	benefit	of	modifications)	would	first reverse	any	previously	recorded	allowance	for	loan	losses	with	any	remaining increases	recognized	prospectively	as	a	yield	adjustment	over	the	remaining estimated	lives	of	the	underlying	loans.	The	impacts	of	(i)	prepayments,	(ii) changes	in	variable	interest	rates,	and	(iii)	any	other	changes	in	the	timing	of expected	cash	flows	are	recognized	prospectively	as	adjustments	to	interest income.

The	Firm	continues	to	modify	certain	PCI	loans.	The	impact	of	these modifications	is	incorporated	into	the	Firm's	quarterly	assessment	of	whether	a probable	and	significant	change	in	expected	cash	flows	has	occurred,	and	the loans	continue	to	be	accounted	for	and	reported	as	PCI	loans.	In	evaluating	the effect	of	modifications	on	expected	cash	flows,	the	Firm	incorporates	the	effect of	any	foregone	interest	and	also	considers	the	potential	for	redefault.	The	Firm develops	product-specific	probability	of	default	estimates,	which	are	used	to compute	expected	credit	losses.	In	developing	these	probabilities	of	default,	the Firm	considers	the	relationship	between	the	credit	quality	characteristics	of	the underlying	loans	and	certain	assumptions	about	home	prices	and	unemployment based	upon	industry-wide	data.	The	Firm	also	considers	its	own	historical	loss experience	to-date	based	on	actual	redefaulted	modified	PCI	loans.

The	excess	of	cash	flows	expected	to	be	collected	over	the	carrying	value	of	the underlying	loans	is	referred	to	as	the	accretable	yield.	This	amount	is	not reported	on	the	Firm's	Consolidated	balance	sheets	but	is	accreted	into	interest income	at	a	level	rate	of	return	over	the	remaining	estimated	lives	of	the underlying	pools	of	loans.

If	the	timing	and/or	amounts	of	expected	cash	flows	on	PCI	loans	were determined	not	to	be	reasonably	estimable,	no	interest	would	be	accreted	and	the loans	would	be	reported	as	nonaccrual	loans;	however,	since	the	timing	and amounts	of	expected	cash	flows	for	the	Firm's	PCI	consumer	loans	are reasonably	estimable,	interest	is	being	accreted	and	the	loans	are	being	reported as	performing	loans.

The	liquidation	of	PCI	loans,	which	may	include	sales	of	loans,	receipt	of payment	in	full	from	the	borrower,	or	foreclosure,	results	in	removal	of	the	loans from	the	underlying	PCI	pool.	When	the	amount	of	the	liquidation	proceeds (e.g.,	cash,	real	estate),	if	any,	is	less	than	the	unpaid	principal	balance	of	the loan,	the	difference	is	first	applied	against	the	PCI	pool's	nonaccretable difference	for	principal	losses	(i.e.,	the	lifetime	credit	loss	estimate	established	as a	purchase	accounting	adjustment	at	the	acquisition	date).	When	the nonaccretable	difference	for	a	particular	loan	pool	has	been	fully	depleted,	any excess	of	the	unpaid	principal	balance	of	the	loan	over	the	liquidation	proceeds	is written	off	against	the	PCI	pool's	allowance	for	loan	losses.	Beginning	in	2014, write-offs	of	PCI	loans	also	include	other	adjustments,	primarily	related	to interest	forgiveness	modifications.	Because	the	Firm's	PCI	loans	are	accounted for	at	a	pool	level,	the	Firm	does	not	recognize	charge-offs	of	PCI	loans	when they	reach	specified	stages	of	delinquency	(i.e.,	unlike	non-PCI	consumer	loans, these	loans	are	not	charged	off	based	on	FFIEC	standards).

The	PCI	portfolio	affects	the	Firm's	results	of	operations	primarily	through: (i)	contribution	to	net	interest	margin;	(ii)	expense	related	to	defaults	and servicing	resulting	from	the	liquidation	of	the	loans;	and	(iii)	any	provision	for loan	losses.	The	PCI	loans	acquired	in	the	Washington	Mutual	transaction	were funded	based	on	the	interest	rate	characteristics	of	the	loans.	For	example, variable-rate	loans	were	funded	with	variable-rate	liabilities	and	fixed-rate	loans were	funded	with	fixed-rate	liabilities	with	a	similar	maturity	profile.	A	net spread	will	be	earned	on	the	declining	balance	of	the	portfolio,	which	is estimated	as	of	December	31,	2015,	to	have	a	remaining	weighted-average	life	of 9	years.

# Residential	real	estate	–	PCI	loans

The	table	below	sets	forth	information	about	the	Firm's	consumer,	excluding	credit	card,	PCI	loans.

|  | Home	equity |  | Prime	mortgage |  | Subprime	mortgage |  | Option	ARMs |  | Total	PCI |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions,\texcept\tratios) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Carrying\tvalue(a) | $14,989 | $17,095 | $8,893 | $10,220 | $3,263 | $3,673 | $13,853 | $15,708 | $40,998 | $46,696 |
| Related\tallowance\tfor\tloan\tlosses(b) | 1,708 | 1,758 | 985 | 1,193 | — | 180 | 49 | 194 | 2,742 | 3,325 |
| Loan\tdelinquency\t(based\ton\tunpaid\tprincipal\tbalance) |  |  |  |  |  |  |  |  |  |  |
| Current | $14,387 | $16,295 | $7,894 | $8,912 | $3,232 | $3,565 | $12,370 | $13,814 | $37,883 | $42,586 |
| 30–149\tdays\tpast\tdue | 322 | 445 | 424 | 500 | 439 | 536 | 711 | 858 | 1,896 | 2,339 |
| 150\tor\tmore\tdays\tpast\tdue | 633 | 1,000 | 601 | 837 | 380 | 551 | 1,272 | 1,824 | 2,886 | 4,212 |
| Total\tloans | $15,342 | $17,740 | $8,919 | $10,249 | $4,051 | $4,652 | $14,353 | $16,496 | $42,665 | $49,137 |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tloans | 6.22% | 8.15% | 11.49% | 13.05% | 20.22% | 23.37% | 13.82% | 16.26% | 11.21% | 13.33% |
| Current\testimated\tLTV\tratios\t(based\ton\tunpaid\tprincipal |  |  |  |  |  |  |  |  |  |  |
| balance)(c)(d)(e) |  |  |  |  |  |  |  |  |  |  |
| Greater\tthan\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | $153 | $301 | $10 | $22 | $10 | $22 | $19 | $50 | $192 | $395 |
| Less\tthan\t660 | 80 | 159 | 28 | 52 | 55 | 106 | 36 | 84 | 199 | 401 |
| 101%\tto\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 942 | 1,448 | 120 | 268 | 77 | 144 | 166 | 330 | 1,305 | 2,190 |
| Less\tthan\t660 | 444 | 728 | 152 | 284 | 220 | 390 | 239 | 448 | 1,055 | 1,850 |
| 80%\tto\t100%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 2,709 | 3,591 | 816 | 1,405 | 331 | 451 | 977 | 1,695 | 4,833 | 7,142 |
| Less\tthan\t660 | 1,136 | 1,485 | 614 | 969 | 643 | 911 | 1,050 | 1,610 | 3,443 | 4,975 |
| Lower\tthan\t80%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 6,724 | 6,626 | 4,243 | 4,211 | 863 | 787 | 7,073 | 7,053 | 18,903 | 18,677 |
| Less\tthan\t660 | 2,265 | 2,308 | 2,438 | 2,427 | 1,642 | 1,585 | 4,065 | 4,291 | 10,410 | 10,611 |
| No\tFICO/LTV\tavailable | 889 | 1,094 | 498 | 611 | 210 | 256 | 728 | 935 | 2,325 | 2,896 |
| Total\tunpaid\tprincipal\tbalance | $15,342 | $17,740 | $8,919 | $10,249 | $4,051 | $4,652 | $14,353 | $16,496 | $42,665 | $49,137 |
| Geographic\tregion\t(based\ton\tunpaid\tprincipal\tbalance) |  |  |  |  |  |  |  |  |  |  |
| California | $9,205 | $10,671 | $5,172 | $5,965 | $1,005 | $1,138 | $8,108 | $9,190 | $23,490 | $26,964 |
| New\tYork | 788 | 876 | 580 | 672 | 400 | 463 | 813 | 933 | 2,581 | 2,944 |
| Illinois | 358 | 405 | 263 | 301 | 196 | 229 | 333 | 397 | 1,150 | 1,332 |
| Texas | 224 | 273 | 94 | 92 | 243 | 281 | 75 | 85 | 636 | 731 |
| Florida | 1,479 | 1,696 | 586 | 689 | 373 | 432 | 1,183 | 1,440 | 3,621 | 4,257 |
| New\tJersey | 310 | 348 | 238 | 279 | 139 | 165 | 470 | 553 | 1,157 | 1,345 |
| Washington | 819 | 959 | 194 | 225 | 81 | 95 | 339 | 395 | 1,433 | 1,674 |
| Arizona | 281 | 323 | 143 | 167 | 76 | 85 | 203 | 227 | 703 | 802 |
| Michigan | 44 | 53 | 141 | 166 | 113 | 130 | 150 | 182 | 448 | 531 |
| Ohio | 17 | 20 | 45 | 48 | 62 | 72 | 61 | 69 | 185 | 209 |
| All\tother | 1,817 | 2,116 | 1,463 | 1,645 | 1,363 | 1,562 | 2,618 | 3,025 | 7,261 | 8,348 |
| Total\tunpaid\tprincipal\tbalance | $15,342 | $17,740 | $8,919 | $10,249 | $4,051 | $4,652 | $14,353 | $16,496 | $42,665 | $49,137 |

(a) Carrying	value	includes	the	effect	of	fair	value	adjustments	that	were	applied	to	the	consumer	PCI	portfolio	at	the	date	of acquisition.

(b) Management	concluded	as	part	of	the	Firm's	regular	assessment	of	the	PCI	loan	pools	that	it	was	probable	that	higher	expected	credit	losses	would	result	in	a	decrease	in	expected	cash	flows.	As	a	result,	an	allowance	for	loan	losses	for impairment	of	these	pools	has	been	recognized.

(c) Represents	the	aggregate	unpaid	principal	balance	of	loans	divided	by	the	estimated	current	property	value.	Current	property	values	are	estimated,	at	a	minimum,	quarterly,	based	on	home	valuation	models	using	nationally	recognized	home price	index	valuation	estimates	incorporating	actual	data	to	the	extent	available	and	forecasted	data	where	actual	data	is	not	available.	These	property	values	do	not	represent	actual	appraised	loan	level	collateral	values;	as	such,	the	resulting ratios	are	necessarily	imprecise	and	should	be	viewed	as	estimates.	Current	estimated	combined	LTV	for	junior	lien	home	equity	loans	considers	all	available	lien	positions,	as	well	as	unused	lines,	related	to	the	property.	Effective December	31,	2015,	the	current	estimated	LTV	ratios	reflect	updates	to	the	nationally	recognized	home	price	index	valuation	estimates	incorporated	into	the	Firm's	home	valuation	models.	The	prior	period	ratios	have	been	revised	to conform	with	these	updates	in	the	home	price	index.

(d) Refreshed	FICO	scores	represent	each	borrower's	most	recent	credit	score,	which	is	obtained	by	the	Firm	on	at	least	a	quarterly basis.

(e) The	current	period	current	estimated	LTV	ratios	disclosures	have	been	updated	to	reflect	where	either	the	FICO	score	or	estimated	property	value	is	unavailable.	The	prior	period	amounts	have	been	revised	to	conform	with	the	current presentation.

Approximately	23%	of	the	PCI	home	equity	portfolio	are	senior	lien	loans;	the	remaining	balance	are	junior	lien	HELOANs	or	HELOCs.	The	following	table	sets	forth delinquency	statistics	for	PCI	junior	lien	home	equity	loans	and	lines	of	credit	based	on	the	unpaid	principal	balance	as	of	December	31,	2015	and	2014.

| (in	millions,	except	ratios) | 2015 | 2014 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- |
| HELOCs:(a) |  |  |  |  |
| Within\tthe\trevolving\tperiod(b) | $5,000 | $8,972 | 4.10% | 6.42% |
| Beyond\tthe\trevolving\tperiod(c) | 6,252 | 4,143 | 4.46 | 6.42 |
| HELOANs | 582 | 736 | 5.33 | 8.83 |
| Total | $11,834 | $13,851 | 4.35% | 6.55% |

(a) In	general,	these	HELOCs	are	revolving	loans	for	a	 10-year	period,	after	which	time	the	HELOC	converts	to	an	interest-only	loan	with	a	balloon	payment	at	the	end	of	the	loan's	term.

(b) Substantially	all	undrawn	HELOCs	within	the	revolving	period	have	been	closed.

(c) Includes	loans	modified	into	fixed-rate	amortizing	loans.

The	table	below	sets	forth	the	accretable	yield	activity	for	the	Firm's	PCI	consumer	loans	for	the	years	ended	December	31,	2015,	2014	and	2013,	and	represents	the Firm's	estimate	of	gross	interest	income	expected	to	be	earned	over	the	remaining	life	of	the	PCI	loan	portfolios.	The	table	excludes	the	cost	to	fund	the	PCI	portfolios, and	therefore	the	accretable	yield	does	not	represent	net	interest	income	expected	to	be	earned	on	these	portfolios.

| Year	ended	December	31, |  | Total	PCI |  |
| :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratios) | 2015 | 2014 | 2013 |
| Beginning\tbalance | $14,592 | $16,167 | $18,457 |
| Accretion\tinto\tinterest\tincome | (1,700) | (1,934) | (2,201) |
| Changes\tin\tinterest\trates\ton\tvariable-rate\tloans | 279 | (174) | (287) |
| Other\tchanges\tin\texpected\tcash\tflows(a) | 230 | 533 | 198 |
| Reclassification\tfrom\tnonaccretable\tdifference(b) | 90 | — | — |
| Balance\tat\tDecember\t31 | $13,491 | $14,592 | $16,167 |
| Accretable\tyield\tpercentage | 4.20% | 4.19% | 4.31% |

(a) Other	changes	in	expected	cash	flows	may	vary	from	period	to	period	as	the	Firm	continues	to	refine	its	cash	flow	model	and	periodically	updates	model	assumptions.	For	the	years	ended December	31,	2015	and December	31,	2014,	other	changes	in	expected	cash	flows	were	driven	by	changes	in	prepayment	assumptions.	For	the	year	ended December	31,	2013,	other	changes	in	expected	cash	flows	were	due	to	refining	the expected	interest	cash	flows	on	HELOCs	with	balloon	payments,	partially	offset	by	changes	in	prepayment	assumptions.

(b) Reclassifications	from	the	nonaccretable	difference	in	the	year	ended	 December	31,	2015	were	driven	by	continued	improvement	in	home	prices	and	delinquencies,	as	well	as	increased	granularity	in	the	impairment estimates.

The	factors	that	most	significantly	affect	estimates	of	gross	cash	flows	expected to	be	collected,	and	accordingly	the	accretable	yield	balance,	include:	(i)	changes in	the	benchmark	interest	rate	indices	for	variable-rate	products	such	as	option ARM	and	home	equity	loans;	and	(ii)	changes	in	prepayment	assumptions.

At	December	31,	2015	and	2014,	the	Firm	had	PCI	residential	real	estate	loans with	an	unpaid	principal	balance	of	$2.3	billion	and	$3.2	billion,	respectively, that	were	not	included	in	REO,	but	were	in	the	process	of	active	or	suspended foreclosure.

# Credit	card	loan	portfolio

The	credit	card	portfolio	segment	includes	credit	card	loans	originated	and purchased	by	the	Firm.	Delinquency	rates	are	the	primary	credit	quality	indicator for	credit	card	loans	as	they	provide	an	early	warning	that	borrowers	may	be experiencing	difficulties	(30	days	past	due);	information	on	those	borrowers	that have	been	delinquent	for	a	longer	period	of	time	(90	days	past	due)	is	also considered.	In	addition	to	delinquency	rates,	the	geographic	distribution	of	the loans	provides	insight	as	to	the	credit	quality	of	the	portfolio	based	on	the regional	economy.

While	the	borrower's	credit	score	is	another	general	indicator	of	credit	quality, the	Firm	does	not	view	credit	scores	as	a	primary	indicator	of	credit	quality because	the	borrower's	credit	score	tends	to	be	a	lagging	indicator.	However,	the distribution	of	such	scores	provides	a	general	indicator	of	credit	quality	trends within	the	portfolio.	Refreshed	FICO	score	information,	which	is	obtained	at least	quarterly,	for	a	statistically	significant	random	sample	of	the	credit	card portfolio	is	indicated	in	the	table	below;	FICO	is	considered	to	be	the	industry benchmark	for	credit	scores.

The	Firm	generally	originates	new	card	accounts	to	prime	consumer	borrowers. However,	certain	cardholders'	FICO	scores	may	decrease	over	time,	depending on	the	performance	of	the	cardholder	and	changes	in	credit	score	technology.

The	table	below	sets	forth	information	about	the	Firm's	credit	card	loans.

| (in	millions,	except	ratios) | 2015 | 2014 |
| :--- | :--- | :--- |
| Net\tcharge-offs | $3,122 | $3,429 |
| %\tof\tnet\tcharge-offs\tto\tretained\tloans | 2.51% | 2.75% |
| Loan\tdelinquency |  |  |
| Current\tand\tless\tthan\t30\tdays\tpast\tdue\nand\tstill\taccruing | $129,502 | $126,189 |
| 30–89\tdays\tpast\tdue\tand\tstill\taccruing | 941 | 943 |
| 90\tor\tmore\tdays\tpast\tdue\tand\tstill\taccruing | 944 | 895 |
| Total\tretained\tcredit\tcard\tloans | $131,387 | $128,027 |
| Loan\tdelinquency\tratios |  |  |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tretained\tloans | 1.43% | 1.44% |
| %\tof\t90+\tdays\tpast\tdue\tto\ttotal\tretained\tloans | 0.72 | 0.70 |
| Credit\tcard\tloans\tby\tgeographic\tregion |  |  |
| California | $18,802 | $17,940 |
| Texas | 11,847 | 11,088 |
| New\tYork | 11,360 | 10,940 |
| Florida | 7,806 | 7,398 |
| Illinois | 7,655 | 7,497 |
| New\tJersey | 5,879 | 5,750 |
| Ohio | 4,700 | 4,707 |
| Pennsylvania | 4,533 | 4,489 |
| Michigan | 3,562 | 3,552 |
| Colorado | 3,399 | 3,226 |
| All\tother | 51,844 | 51,440 |
| Total\tretained\tcredit\tcard\tloans | $131,387 | $128,027 |
| Percentage\tof\tportfolio\tbased\ton\tcarrying\tvalue\nwith\testimated\trefreshed\tFICO\tscores |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 84.4% | 85.7% |
| Less\tthan\t660 | 15.6 | 14.3 |

# Credit	card	impaired	loans	and	loan	modifications

The	table	below	sets	forth	information	about	the	Firm's	impaired	credit	card loans.	All	of	these	loans	are	considered	to	be	impaired	as	they	have	been modified	in	TDRs.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Impaired\tcredit\tcard\tloans\twith\tan\tallowance(a)(b) |  |  |
| Credit\tcard\tloans\twith\tmodified\tpayment\tterms(c) | $1,286 | $1,775 |
| Modified\tcredit\tcard\tloans\tthat\thave\treverted\tto\tpre-\nmodification\tpayment\tterms(d) | 179 | 254 |
| Total\timpaired\tcredit\tcard\tloans(e) | $1,465 | $2,029 |
| Allowance\tfor\tloan\tlosses\trelated\tto\timpaired\tcredit\ncard\tloans | $460 | $500 |

(a) The	carrying	value	and	the	unpaid	principal	balance	are	the	same	for	credit	card	impaired	loans. (b) There	were	no	impaired	loans	without	an	allowance.

(c) Represents	credit	card	loans	outstanding	to	borrowers	enrolled	in	a	credit	card	modification	program as	of	the	date	presented.

(d) Represents	credit	card	loans	that	were	modified	in	TDRs	but	that	have	subsequently	reverted	back	to the	loans'	pre-modification	payment	terms.	At	December	31,	2015	and	2014,	$113	million	and	$159 million,	respectively,	of	loans	have	reverted	back	to	the	pre-modification	payment	terms	of	the	loans due	to	noncompliance	with	the	terms	of	the	modified	loans.	The	remaining	$66	million	and	$95 million	at	December	31,	2015	and	2014,	respectively,	of	these	loans	are	to	borrowers	who	have successfully	completed	a	short-term	modification	program.	The	Firm	continues	to	report	these	loans as	TDRs	since	the	borrowers'	credit	lines	remain	closed.

(e) Predominantly	all	impaired	credit	card	loans	are	in	the	U.S.

The	following	table	presents	average	balances	of	impaired	credit	card	loans	and interest	income	recognized	on	those	loans.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Average\timpaired\tcredit\tcard\tloans | $1,710 | $2,503 | $3,882 |
| Interest\tincome\ton\n\t\timpaired\tcredit\tcard\tloans | 82 | 123 | 198 |

JPMorgan	Chase	may	offer	one	of	a	number	of	loan	modification	programs	to credit	card	borrowers	who	are	experiencing	financial	difficulty.	Most	of	the credit	card	loans	have	been	modified	under	long-term	programs	for	borrowers who	are	experiencing	financial	difficulties.	Modifications	under	long-term programs	involve	placing	the	customer	on	a	fixed	payment	plan,	generally	for	60 months.	The	Firm	may	also	offer	short-term	programs	for	borrowers	who	may	be in	need	of	temporary	relief;	however,	none	are	currently	being	offered. Modifications	under	all	short-	and	long-term	programs	typically	include reducing	the	interest	rate	on	the	credit	card.	Substantially	all	modifications	are considered	to	be	TDRs.

If	the	cardholder	does	not	comply	with	the	modified	payment	terms,	then	the credit	card	loan	agreement	reverts	back	to	its	pre-modification	payment	terms. Assuming	that	the	cardholder	does	not	begin	to	perform	in	accordance	with	those payment	terms,	the	loan	continues	to	age	and	will	ultimately	be	charged-off	in accordance	with	the	Firm's	standard	charge-off	policy.	In	addition,	if	a	borrower successfully	completes	a	short-term	modification	program,

then	the	loan	reverts	back	to	its	pre-modification	payment	terms.	However,	in most	cases,	the	Firm	does	not	reinstate	the	borrower's	line	of	credit.

New	enrollments	in	these	loan	modification	programs	for	the	years	ended December	31,	2015,	2014	and	2013,	were	$638	million,	$807	million	and	$1.2 billion,	respectively.

The	following	table	provides	information	about	the	financial	effects	of	the concessions	granted	on	credit	card	loans	modified	in	TDRs	and	redefaults	for	the periods	presented.

| weighted-average	data)<br>Weighted-average	interest	rate	of	loans<br>–	before	TDR | 2015<br>15.08% | 2014<br>14.96% | 2013<br>15.37% |
| :--- | :--- | :--- | :--- |
| Weighted-average\tinterest\trate\tof\tloans\n–\tafter\tTDR | 4.40 | 4.40 | 4.38 |
| Loans\tthat\tredefaulted\twithin\tone\tyear\nof\tmodification(a) | $85 | $119 | $167 |

(a) Represents	loans	modified	in	TDRs	that	experienced	a	payment	default	in	the	periods	presented,	and for	which	the	payment	default	occurred	within	one	year	of	the	modification.	The	amounts	presented represent	the	balance	of	such	loans	as	of	the	end	of	the	quarter	in	which	they	defaulted.

For	credit	card	loans	modified	in	TDRs,	payment	default	is	deemed	to	have occurred	when	the	loans	become	two	payments	past	due.	A	substantial	portion	of these	loans	is	expected	to	be	charged-off	in	accordance	with	the	Firm's	standard charge-off	policy.	Based	on	historical	experience,	the	estimated	weighted- average	default	rate	for	credit	card	loans	modified	was	expected	to	be	25.61%, 27.91%	and	30.72%	as	of	December	31,	2015,	2014	and	2013,	respectively.

# Wholesale	loan	portfolio

Wholesale	loans	include	loans	made	to	a	variety	of	customers,	ranging	from large	corporate	and	institutional	clients	to	high-net-worth	individuals.

The	primary	credit	quality	indicator	for	wholesale	loans	is	the	risk	rating assigned	each	loan.	Risk	ratings	are	used	to	identify	the	credit	quality	of	loans and	differentiate	risk	within	the	portfolio.	Risk	ratings	on	loans	consider	the probability	of	default	("PD")	and	the	loss	given	default	("LGD").	The	PD	is	the likelihood	that	a	loan	will	default	and	not	be	fully	repaid	by	the	borrower.	The LGD	is	the	estimated	loss	on	the	loan	that	would	be	realized	upon	the	default	of the	borrower	and	takes	into	consideration	collateral	and	structural	support	for each	credit	facility.

Management	considers	several	factors	to	determine	an	appropriate	risk	rating, including	the	obligor's	debt	capacity	and	financial	flexibility,	the	level	of	the obligor's	earnings,	the	amount	and	sources	for	repayment,	the	level	and	nature	of contingencies,	management	strength,	and	the	industry	and	geography	in	which the	obligor	operates.	The	Firm's	definition	of	criticized	aligns	with	the	banking regulatory	definition	of	criticized	exposures,	which	consist	of	special	mention, substandard	and	doubtful	categories.	Risk	ratings	generally	represent	ratings profiles	similar	to	those	defined	by	S&P	and	Moody's.	Investment-grade	ratings range	from	"AAA/Aaa"	to	"BBB-/Baa3."	Noninvestment-grade	ratings

are	classified	as	noncriticized	("BB+/Ba1	and	B-/B3")	and	criticized ("CCC+"/"Caa1	and	below"),	and	the	criticized	portion	is	further	subdivided	into performing	and	nonaccrual	loans,	representing	management's	assessment	of	the collectibility	of	principal	and	interest.	Criticized	loans	have	a	higher	probability of	default	than	noncriticized	loans.

Risk	ratings	are	reviewed	on	a	regular	and	ongoing	basis	by	Credit	Risk Management	and	are	adjusted	as	necessary	for	updated	information	affecting	the obligor's	ability	to	fulfill	its	obligations.

As	noted	above,	the	risk	rating	of	a	loan	considers	the	industry	in	which	the obligor	conducts	its	operations.	As	part	of	the	overall	credit	risk	management framework,	the	Firm	focuses	on	the	management	and	diversification	of	its industry	and	client	exposures,	with	particular	attention	paid	to	industries	with actual	or	potential	credit	concern.	See	Note	5	for	further	detail	on	industry concentrations.

The	table	below	provides	information	by	class	of	receivable	for	the	retained	loans	in	the	Wholesale	portfolio	segment.

| ratios) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |  | 2015 | 2014 | 2015 | 2014 |  | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Loans\tby\trisk\tratings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investment\tgrade\nNoninvestment\n\t\tgrade: | $62,150 | $63,069 | $74,330 | $61,006 | $21,786 | $27,111 |  | $11,363 | $8,393 | $98,107 | $82,087 |  | $267,736 | $241,666 |
| Noncriticized | 45,632 | 44,117 | 17,008 | 16,541 | 7,667 | 7,093 | (d) | 256 | 300 | 11,390 | 10,067 | (d) | 81,953 | 78,118 |
| Criticized\nperforming | 4,542 | 2,251 | 1,251 | 1,313 | 320 | 316 |  | 7 | 3 | 253 | 236 |  | 6,373 | 4,119 |
| Criticized\nnonaccrual | 608 | 188 | 231 | 253 | 10 | 18 |  | — | — | 139 | 140 |  | 988 | 599 |
| Total\tnoninvestment\ngrade | 50,782 | 46,556 | 18,490 | 18,107 | 7,997 | 7,427 | (d) | 263 | 303 | 11,782 | 10,443 | (d) | 89,314 | 82,836 |
| Total\tretained\tloans | $112,932 | $109,625 | $92,820 | $79,113 | $29,783 | $34,538 | (d) | $11,626 | $8,696 | $109,889 | $92,530 | (d) | $357,050 | $324,502 |
| %\tof\ttotal\tcriticized\tto\ntotal\tretained\tloans | 4.56% | 2.22% | 1.60\t% | 1.98\t% | 1.11\t% | 0.97 | % | 0.06\t% | 0.03% | 0.36% | 0.41 | % | 2.06% | 1.45% |
| %\tof\tnonaccrual\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| to\ttotal\tretained |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| loans | 0.54 | 0.17 | 0.25 | 0.32 | 0.03 | 0.05 |  | — | — | 0.13 | 0.15 |  | 0.28 | 0.18 |
| Loans\tby\tgeographic\ndistribution(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Total\tnon-U.S. | $30,063 | $33,739 | $3,003 | $2,099 | $17,166 | $20,944 |  | $1,788 | $1,122 | $42,031 | $42,961 |  | $94,051 | $100,865 |
| Total\tU.S. | 82,869 | 75,886 | 89,817 | 77,014 | 12,617 | 13,594 | (d) | 9,838 | 7,574 | 67,858 | 49,569 | (d) | 262,999 | 223,637 |
| Total\tretained\tloans | $112,932 | $109,625 | $92,820 | $79,113 | $29,783 | $34,538 | (d) | $11,626 | $8,696 | $109,889 | $92,530 | (d) | $357,050 | $324,502 |
| Net\tcharge-\noffs/(recoveries) | $26 | $22 | $(14) | $(9) | $(5) | $(12) |  | $(8) | $25 | $11 | $(14) |  | $10 | $12 |
| %\tof\tnet |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| charge- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| offs/(recoveries)\tto |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| end-of-period |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| retained\tloans | 0.02% | 0.02% | (0.02)% | (0.01)% | (0.02)% | (0.04) | % | (0.07)% | 0.29% | 0.01% | (0.02) | % | —% | —% |
| Loan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| delinquency(b) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Current\tand\tless\tthan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 30\tdays\tpast\tdue\tand |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| still\taccruing | $112,058 | $108,857 | $92,381 | $78,552 | $29,713 | $34,416 | (d) | $11,565 | $8,627 | $108,734 | $91,160 | (d) | $354,451 | $321,612 |
| 30–89\tdays\tpast\tdue\nand\tstill\taccruing | 259 | 566 | 193 | 275 | 49 | 104 |  | 55 | 69 | 988 | 1,201 |  | 1,544 | 2,215 |
| 90\tor\tmore\tdays\tpast |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| due\tand\tstill |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| accruing(c) | 7 | 14 | 15 | 33 | 11 | — |  | 6 | — | 28 | 29 |  | 67 | 76 |
| Criticized\tnonaccrual | 608 | 188 | 231 | 253 | 10 | 18 |  | — | — | 139 | 140 |  | 988 | 599 |
| Total\tretained\tloans | $112,932 | $109,625 | $92,820 | $79,113 | $29,783 | $34,538 | (d) | $11,626 | $8,696 | $109,889 | $92,530 | (d) | $357,050 | $324,502 |

(a) The	U.S.	and	non-U.S.	distribution	is	determined	based	predominantly	on	the	domicile	of	the borrower.

(b) The	credit	quality	of	wholesale	loans	is	assessed	primarily	through	ongoing	review	and	monitoring	of	an	obligor's	ability	to	meet	contractual	obligations	rather	than	relying	on	the	past	due	status,	which	is	generally	a	lagging	indicator	of credit	quality.

(c) Represents	loans	that	are	considered	well-collateralized	and	therefore	still	accruing interest.

(d) Effective	in	the	fourth	quarter	2015,	the	Firm	realigned	its	wholesale	industry	divisions	in	order	to	better	monitor	and	manage	industry	concentrations.	Prior	period	amounts	have	been	revised	to	conform	with	current	period	presentation.	For additional	information,	see	Wholesale	credit	portfolio	on	pages	122–129.

(e) Other	includes:	individuals;	SPEs;	holding	companies;	and	private	education	and	civic	organizations.	For	more	information	on	exposures	to	SPEs,	see	Note 16.

The	following	table	presents	additional	information	on	the	real	estate	class	of	loans	within	the	Wholesale	portfolio	segment	for	the	periods	indicated.	The	real	estate	class primarily	consists	of	secured	commercial	loans	mainly	to	borrowers	for	multi-family	and	commercial	lessor	properties.	Multifamily	lending	specifically	finances apartment	buildings.	Commercial	lessors	receive	financing	specifically	for	real	estate	leased	to	retail,	office	and	industrial	tenants.	Commercial	construction	and development	loans	represent	financing	for	the	construction	of	apartments,	office	and	professional	buildings	and	malls.	Other	real	estate	loans	include	lodging,	real	estate investment	trusts	("REITs"),	single-family,	homebuilders	and	other	real	estate.

| (in	millions,	except	ratios) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Real\testate\tretained\tloans | $60,290 | $51,049 | $20,062 | $17,438 | $4,920 | $4,264 | $7,548 | $6,362 | $92,820 | $79,113 |
| Criticized | 520 | 652 | 844 | 841 | 43 | 42 | 75 | 31 | 1,482 | 1,566 |
| %\tof\tcriticized\tto\ttotal\treal\testate\nretained\tloans | 0.86% | 1.28% | 4.21% | 4.82% | 0.87% | 0.98% | 0.99% | 0.49% | 1.60% | 1.98% |
| Criticized\tnonaccrual | $85 | $126 | $100 | $110 | $1 | $— | $45 | $17 | $231 | $253 |
| %\tof\tcriticized\tnonaccrual\tto\ttotal\treal\nestate\tretained\tloans | 0.14% | 0.25% | 0.50% | 0.63% | 0.02% | —% | 0.60% | 0.27% | 0.25% | 0.32% |

# Wholesale	impaired	loans	and	loan	modifications

Wholesale	impaired	loans	consist	of	loans	that	have	been	placed	on	nonaccrual	status	and/or	that	have	been	modified	in	a	TDR.	All	impaired	loans	are	evaluated	for	an asset-specific	allowance	as	described	in	Note	15.

The	table	below	sets	forth	information	about	the	Firm's	wholesale	impaired	loans.

| (in	millions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 |  | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Impaired\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |
| With\tan\tallowance | $522 | $174 | $148 | $193 | $10 | $15 | $— | $— | $46 | $89 | $726 |  | $471 |
| Without\tan\tallowance(a) | 98 | 24 | 106 | 87 | — | 3 | — | — | 94 | 52 | 298 |  | 166 |
| Total\timpaired\tloans | $620 | $198 | $254 | $280 | $10 | $18 | $— | $— | $140 | $141 | $1,024 | (c) | $637 |
| Allowance\tfor\tloan\tlosses\trelated\tto\timpaired\nloans | $220 | $34 | $27 | $36 | $3 | $4 | $— | $— | $24 | $13 | $274 |  | $87 |
| Unpaid\tprincipal\tbalance\tof\timpaired\tloans(b) | 669 | 266 | 363 | 345 | 13 | 22 | — | — | 164 | 202 | 1,209 |  | 835 |

(a) When	the	discounted	cash	flows,	collateral	value	or	market	price	equals	or	exceeds	the	recorded	investment	in	the	loan,	the	loan	does	not	require	an	allowance.	This	typically	occurs	when	the	impaired	loans	have	been	partially	charged-off and/or	there	have	been	interest	payments	received	and	applied	to	the	loan	balance.

(b) Represents	the	contractual	amount	of	principal	owed	at	December	31,	2015	and	2014.	The	unpaid	principal	balance	differs	from	the	impaired	loan	balances	due	to	various	factors,	including	charge-offs;	interest	payments	received	and	applied to	the	carrying	value;	net	deferred	loan	fees	or	costs;	and	unamortized	discount	or	premiums	on	purchased	loans.

(c) Based	upon	the	domicile	of	the	borrower,	largely	consists	of	loans	in	the

The	following	table	presents	the	Firm's	average	impaired	loans	for	the	years ended	2015,	2014	and	2013.

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Commercial\tand\tindustrial | $453 | $243 | $412 |
| Real\testate | 250 | 297 | 484 |
| Financial\tinstitutions | 13 | 20 | 17 |
| Government\tagencies | — | — | — |
| Other | 129 | 155 | 211 |
| Total(a) | $845 | $715 | $1,124 |

(a) The	related	interest	income	on	accruing	impaired	loans	and	interest	income	recognized	on	a	cash	basis	were	not material	for	the	years	ended	December	31,	2015,	2014	and	2013.

Certain	loan	modifications	are	considered	to	be	TDRs	as	they	provide	various concessions	to	borrowers	who	are	experiencing	financial	difficulty.	All	TDRs	are reported	as	impaired	loans	in	the	tables	above.	TDRs	were	not	material	as	of December	31,	2015	and	2014.

# Note	15	–	Allowance	for	credit	losses

JPMorgan	Chase's	allowance	for	loan	losses	covers	the	consumer,	including credit	card,	portfolio	segments	(primarily	scored);	and	wholesale	(risk-rated) portfolio,	and	represents	management's	estimate	of	probable	credit	losses inherent	in	the	Firm's	loan	portfolio.	The	allowance	for	loan	losses	includes	an asset-specific	component,	a	formula-based	component	and	a	component	related to	PCI	loans,	as	described	below.	Management	also	estimates	an	allowance	for wholesale	and	consumer	lending-related	commitments	using	methodologies similar	to	those	used	to	estimate	the	allowance	on	the	underlying	loans.	During 2015,	the	Firm	did	not	make	any	significant	changes	to	the	methodologies	or policies	used	to	determine	its	allowance	for	credit	losses;	such	policies	are described	in	the	following	paragraphs.

The	asset-specific	component	of	the	allowance	relates	to	loans	considered	to	be impaired,	which	includes	loans	that	have	been	modified	in	TDRs	as	well	as	risk- rated	loans	that	have	been	placed	on	nonaccrual	status.	To	determine	the	asset- specific	component	of	the	allowance,	larger	loans	are	evaluated	individually, while	smaller	loans	are	evaluated	as	pools	using	historical	loss	experience	for	the respective	class	of	assets.	Scored	loans	(i.e.,	consumer	loans)	are	pooled	by product	type,	while	risk-rated	loans	(primarily	wholesale	loans)	are	segmented by	risk	rating.

The	Firm	generally	measures	the	asset-specific	allowance	as	the	difference between	the	recorded	investment	in	the	loan	and	the	present	value	of	the	cash flows	expected	to	be	collected,	discounted	at	the	loan's	original	effective	interest rate.	Subsequent	changes	in	impairment	are	reported	as	an	adjustment	to	the provision	for	loan	losses.	In	certain	cases,	the	asset-specific	allowance	is determined	using	an	observable	market	price,	and	the	allowance	is	measured	as the	difference	between	the	recorded	investment	in	the	loan	and	the	loan's	fair value.	Impaired	collateral-dependent	loans	are	charged	down	to	the	fair	value	of collateral	less	costs	to	sell	and	therefore	may	not	be	subject	to	an	asset-specific reserve	as	are	other	impaired	loans.	See	Note	14	for	more	information	about charge-offs	and	collateral-dependent	loans.

The	asset-specific	component	of	the	allowance	for	impaired	loans	that	have	been modified	in	TDRs	incorporates	the	effects	of	foregone	interest,	if	any,	in	the present	value	calculation	and	also	incorporates	the	effect	of	the	modification	on the	loan's	expected	cash	flows,	which	considers	the	potential	for	redefault.	For residential	real	estate	loans	modified	in	TDRs,	the	Firm	develops	product- specific	probability	of	default	estimates,	which	are	applied	at	a	loan	level	to compute	expected	losses.	In	developing	these	probabilities	of	default,	the	Firm considers	the	relationship	between	the	credit	quality	characteristics	of	the underlying	loans	and	certain	assumptions	about	home	prices	and	unemployment, based	upon	industry-wide	data.	The	Firm	also	considers	its	own	historical	loss experience	to	date	based	on	actual	redefaulted	modified	loans.	For	credit	card loans	modified	in	TDRs,	expected	losses	incorporate	projected	redefaults	based on	the	Firm's	historical	experience	by	type	of	modification	program.	For wholesale	loans	modified	in	TDRs,	expected	losses	incorporate	redefaults	based on	management's	expectation	of	the	borrower's	ability	to	repay	under	the modified	terms.

The	formula-based	component	is	based	on	a	statistical	calculation	to	provide	for incurred	credit	losses	in	performing	risk-rated	loans	and	all	consumer	loans, except	for	any	loans	restructured	in	TDRs	and	PCI	loans.	See	Note	14	for	more information	on	PCI	loans.

For	scored	loans,	the	statistical	calculation	is	performed	on	pools	of	loans	with similar	risk	characteristics	(e.g.,	product	type)	and	generally	computed	by applying	loss	factors	to	outstanding	principal	balances	over	an	estimated	loss emergence	period.	The	loss	emergence	period	represents	the	time	period	between the	date	at	which	the	loss	is	estimated	to	have	been	incurred	and	the	ultimate realization	of	that	loss	(through	a	charge-off).	Estimated	loss	emergence	periods may	vary	by	product	and	may	change	over	time;	management	applies	judgment in	estimating	loss	emergence	periods,	using	available	credit	information	and trends.

Loss	factors	are	statistically	derived	and	sensitive	to	changes	in	delinquency status,	credit	scores,	collateral	values	and	other	risk	factors.	The	Firm	uses	a number	of	different	forecasting	models	to	estimate	both	the	PD	and	the	loss severity,	including	delinquency	roll	rate	models	and	credit	loss	severity	models. In	developing	PD	and	loss	severity	assumptions,	the	Firm	also	considers	known and	anticipated	changes	in	the	economic	environment,	including	changes	in home	prices,	unemployment	rates	and	other	risk	indicators.

A	nationally	recognized	home	price	index	measure	is	used	to	estimate	both	the PD	and	the	loss	severity	on	residential	real	estate	loans	at	the	metropolitan statistical	areas	("MSA")	level.	Loss	severity	estimates	are	regularly	validated	by comparison	to	actual	losses	recognized	on	defaulted	loans,	market-specific	real estate	appraisals	and	property	sales	activity.	The	economic	impact	of	potential modifications	of	residential	real	estate	loans	is	not	included	in	the	statistical calculation	because	of	the	uncertainty	regarding	the	type	and	results	of	such modifications.

For	risk-rated	loans,	the	statistical	calculation	is	the	product	of	an	estimated	PD and	an	estimated	LGD.	These	factors	are	determined	based	on	the	credit	quality and	specific	attributes	of	the	Firm's	loans	and	lending-related	commitments	to each	obligor.	In	assessing	the	risk	rating	of	a	particular	loan,	among	the	factors considered	are	the	obligor's	debt	capacity	and	financial	flexibility,	the	level	of the	obligor's	earnings,	the	amount	and	sources	for	repayment,	the	level	and nature	of	contingencies,	management	strength,	and	the	industry	and	geography	in which	the	obligor	operates.	These	factors	are	based	on	an	evaluation	of	historical and	current	information,	and	involve	subjective	assessment	and	interpretation. Emphasizing	one	factor	over	another	or	considering	additional	factors	could impact	the	risk	rating	assigned	by	the	Firm.	PD	estimates	are	based	on observable	external	through-the-cycle	data,	using	credit-rating	agency	default statistics.	LGD	estimates	are	based	on	the	Firm's	history	of	actual	credit	losses over	more	than	one	credit	cycle.	Estimates	of	PD	and	LGD	are	subject	to periodic	refinement	based	on	changes	to	underlying	external	and	Firm-specific historical	data.

Management	applies	judgment	within	an	established	framework	to	adjust	the results	of	applying	the	statistical	calculation	described	above.	The	determination of	the	appropriate	adjustment	is	based	on	management's	view	of	loss	events	that have	occurred	but	that	are	not	yet	reflected	in	the	loss	factors	and	that	relate	to current	macroeconomic	and	political	conditions,	the	quality	of	underwriting standards	and	other	relevant	internal	and	external	factors	affecting	the	credit quality	of	the	portfolio.	For	the	scored	loan	portfolios,	adjustments	to	the statistical	calculation	are	made	in	part	by	analyzing	the	historical	loss	experience for	each	major	product	segment.	Factors	related	to	unemployment,	home	prices, borrower	behavior	and	lien	position,	the	estimated	effects	of	the	mortgage foreclosure-related	settlement	with	federal	and	state	officials	and	uncertainties regarding	the	ultimate	success	of	loan	modifications	are	incorporated	into	the calculation,	as	appropriate.	For	junior	lien	products,	management	considers	the delinquency	and/or	modification	status	of	any	senior	liens	in	determining	the adjustment.	In	addition,	for	the	risk-rated	portfolios,	any	adjustments	made	to	the statistical	calculation	take	into	consideration	model	imprecision,	deteriorating conditions	within	an	industry,	product	or	portfolio	type,	geographic	location, credit	concentration,	and	current	economic	events	that	have	occurred	but	that	are not	yet	reflected	in	the	factors	used	to	derive	the	statistical	calculation.

Management	establishes	an	asset-specific	allowance	for	lending-related commitments	that	are	considered	impaired	and	computes	a	formula-based allowance	for	performing	consumer	and	wholesale	lending-related	commitments. These	are	computed	using	a	methodology	similar	to	that	used	for	the	wholesale loan	portfolio,	modified	for	expected	maturities	and	probabilities	of	drawdown.

Determining	the	appropriateness	of	the	allowance	is	complex	and	requires judgment	by	management	about	the	effect	of	matters	that	are	inherently uncertain.	Subsequent	evaluations	of	the	loan	portfolio,	in	light	of	the	factors then	prevailing,	may	result	in	significant	changes	in	the	allowances	for	loan losses	and	lending-related	commitments	in	future	periods.	At	least	quarterly,	the allowance	for	credit	losses	is	reviewed	by	the	Chief	Risk	Officer,	the	Chief Financial	Officer	and	the	Controller	of	the	Firm	and	discussed	with	the	Risk Policy	and	Audit	Committees	of	the	Board	of	Directors	of	the	Firm.	As	of December	31,	2015,	JPMorgan	Chase	deemed	the	allowance	for	credit	losses	to be	appropriate	(i.e.,	sufficient	to	absorb	probable	credit	losses	inherent	in	the portfolio).

# Allowance	for	credit	losses	and	related	information

The	table	below	summarizes	information	about	the	allowances	for	loan	losses,	and	lending-relating	commitments,	and	includes	a	breakdown	of	loans	and	lending-related commitments	by	impairment	methodology.

| Year	ended	December	31,<br>(in	millions) | Consumer,<br>excluding<br>credit	card | Credit	card |  | Wholesale | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Allowance\tfor\tloan\tlosses |  |  |  |  |  |
| Beginning\tbalance\tat\tJanuary\t1, | $7,050 | $3,439 |  | $3,696 | $14,185 |
| Gross\tcharge-offs | 1,658 | 3,488 |  | 95 | 5,241 |
| Gross\trecoveries | (704) | (366) |  | (85) | (1,155) |
| Net\tcharge-offs/(recoveries) | 954 | 3,122 |  | 10 | 4,086 |
| Write-offs\tof\tPCI\tloans(a) | 208 | — |  | — | 208 |
| Provision\tfor\tloan\tlosses | (82) | 3,122 |  | 623 | 3,663 |
| Other | — | (5) |  | 6 | 1 |
| Ending\tbalance\tat\tDecember\t31, | $5,806 | $3,434 |  | $4,315 | $13,555 |
| Allowance\tfor\tloan\tlosses\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific(b) | $364 | $460 | (c) | $274 | $1,098 |
| Formula-based | 2,700 | 2,974 |  | 4,041 | 9,715 |
| PCI | 2,742 | — |  | — | 2,742 |
| Total\tallowance\tfor\tloan\tlosses | $5,806 | $3,434 |  | $4,315 | $13,555 |
| Loans\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific | $9,606 | $1,465 |  | $1,024 | $12,095 |
| Formula-based | 293,751 | 129,922 |  | 356,022 | 779,695 |
| PCI | 40,998 | — |  | 4 | 41,002 |
| Total\tretained\tloans | $344,355 | $131,387 |  | $357,050 | $832,792 |
| Impaired\tcollateral-dependent\tloans |  |  |  |  |  |
| Net\tcharge-offs | $104 | $— |  | $16 | $120 |
| Loans\tmeasured\tat\tfair\tvalue\tof\tcollateral\tless\tcost\tto\tsell | 2,566 | — |  | 283 | 2,849 |
| Allowance\tfor\tlending-related\tcommitments |  |  |  |  |  |
| Beginning\tbalance\tat\tJanuary\t1, | $13 | $— |  | $609 | $622 |
| Provision\tfor\tlending-related\tcommitments | 1 | — |  | 163 | 164 |
| Other | — | — |  | — | — |
| Ending\tbalance\tat\tDecember\t31, | $14 | $— |  | $772 | $786 |
| Allowance\tfor\tlending-related\tcommitments\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific | $— | $— |  | $73 | $73 |
| Formula-based | 14 | — |  | 699 | 713 |
| Total\tallowance\tfor\tlending-related\tcommitments | $14 | $— |  | $772 | $786 |
| Lending-related\tcommitments\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific | $— | $— |  | $193 | $193 |
| Formula-based | 58,478 | 515,518 |  | 366,206 | 940,202 |
| Total\tlending-related\tcommitments | $58,478 | $515,518 |  | $366,399 | $940,395 |

(b) Includes	risk-rated	loans	that	have	been	placed	on	nonaccrual	status	and	loans	that	have	been	modified	in	a TDR.

(c) The	asset-specific	credit	card	allowance	for	loan	losses	is	related	to	loans	that	have	been	modified	in	a	TDR;	such	allowance	is	calculated	based	on	the	loans'	original	contractual	interest	rates	and	does	not	consider	any	incremental	penalty rates.

(d) Effective	January	1,	2015,	the	Firm	no	longer	includes	within	its	disclosure	of	wholesale	lending-related	commitments	the	unused	amount	of	advised	uncommitted	lines	of	credit	as	it	is	within	the	Firm's	discretion whether	or	not	to	make	a	loan	under	these	lines,	and	the	Firm's	approval	is	generally	required	prior	to	funding.	Prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.

| Consumer,<br>excluding<br>credit	card | Credit	card | 2014 | Wholesale |  | Total | Consumer,<br>excluding<br>credit	card | Credit	card | 2013 | Wholesale |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $8,456 | $3,795 |  | $4,013 |  | $16,264 | $12,292 | $5,501 |  | $4,143 |  | $21,936 |
| 2,132 | 3,831 |  | 151 |  | 6,114 | 2,754 | 4,472 |  | 241 |  | 7,467 |
| (814) | (402) |  | (139) |  | (1,355) | (847) | (593) |  | (225) |  | (1,665) |
| 1,318 | 3,429 |  | 12 |  | 4,759 | 1,907 | 3,879 |  | 16 |  | 5,802 |
| 533 | — |  | — |  | 533 | 53 | — |  | — |  | 53 |
| 414 | 3,079 |  | (269) |  | 3,224 | (1,872) | 2,179 |  | (119) |  | 188 |
| 31 | (6) |  | (36) |  | (11) | (4) | (6) |  | 5 |  | (5) |
| $7,050 | $3,439 |  | $3,696 |  | $14,185 | $8,456 | $3,795 |  | $4,013 |  | $16,264 |
| $539 | $500 | (c) | $87 |  | $1,126 | $601 | $971 | (c) | $181 |  | $1,753 |
| 3,186 | 2,939 |  | 3,609 |  | 9,734 | 3,697 | 2,824 |  | 3,832 |  | 10,353 |
| 3,325 | — |  | — |  | 3,325 | 4,158 | — |  | — |  | 4,158 |
| $7,050 | $3,439 |  | $3,696 |  | $14,185 | $8,456 | $3,795 |  | $4,013 |  | $16,264 |
| $12,020 | $2,029 |  | $637 |  | $14,686 | $13,785 | $3,115 |  | $845 |  | $17,745 |
| 236,263 | 125,998 |  | 323,861 |  | 686,122 | 221,609 | 124,350 |  | 307,412 |  | 653,371 |
| 46,696 | — |  | 4 |  | 46,700 | 53,055 | — |  | 6 |  | 53,061 |
| $294,979 | $128,027 |  | $324,502 |  | $747,508 | $288,449 | $127,465 |  | $308,263 |  | $724,177 |
| $133 | $— |  | $21 |  | $154 | $235 | $— |  | $37 |  | $272 |
| 3,025 | — |  | 326 |  | 3,351 | 3,105 | — |  | 362 |  | 3,467 |
| $8 | $— |  | $697 |  | $705 | $7 | $— |  | $661 |  | $668 |
| 5 | — |  | (90) |  | (85) | 1 | — |  | 36 |  | 37 |
| — | — |  | 2 |  | 2 | — | — |  | — |  | — |
| $13 | $— |  | $609 |  | $622 | $8 | $— |  | $697 |  | $705 |
| $— | $— |  | $60 |  | $60 | $— | $— |  | $60 |  | $60 |
| 13 | — |  | 549 |  | 562 | 8 | — |  | 637 |  | 645 |
| $13 | $— |  | $609 |  | $622 | $8 | $— |  | $697 |  | $705 |
| $— | $— |  | $103 |  | $103 | $— | $— |  | $206 |  | $206 |
| 58,153 | 525,963 |  | 366,778 | (d) | 950,894 | 56,057 | 529,383 |  | 344,032 | (d) | 929,472 |
| $58,153 | $525,963 |  | $366,881 |  | $950,997 | $56,057 | $529,383 |  | $344,238 |  | $929,678 |

# Note	16	–	Variable	interest	entities

For	a	further	description	of	JPMorgan	Chase's	accounting	policies	regarding	consolidation	of	VIEs,	see	Note	1.

The	following	table	summarizes	the	most	significant	types	of	Firm-sponsored	VIEs	by	business	segment.	The	Firm	considers	a	"sponsored"	VIE	to	include	any	entity where:	(1)	JPMorgan	Chase	is	the	primary	beneficiary	of	the	structure;	(2)	the	VIE	is	used	by	JPMorgan	Chase	to	securitize	Firm	assets;	(3)	the	VIE	issues	financial instruments	with	the	JPMorgan	Chase	name;	or	(4)	the	entity	is	a	JPMorgan	Chase–administered	asset-backed	commercial	paper	conduit.

The	Firm's	other	business	segments	are	also	involved	with	VIEs,	but	to	a	lesser	extent,	as	follows:

•Asset	Management:	AM	sponsors	and	manages	certain	funds	that	are	deemed	VIEs.	As	asset	manager	of	the	funds,	AM	earns	a	fee	based	on	assets	managed;	the	fee varies	with	each	fund's	investment	objective	and	is	competitively	priced.	For	fund	entities	that	qualify	as	VIEs,	AM's	interests	are,	in	certain	cases,	considered	to	be significant	variable	interests	that	result	in	consolidation	of	the	financial	results	of	these	entities.

•Commercial	Banking:	CB	makes	investments	in	and	provides	lending	to	community	development	entities	that	may	meet	the	definition	of	a	VIE.	In	addition,	CB provides	financing	and	lending-related	services	to	certain	client-sponsored	VIEs.	In	general,	CB	does	not	control	the	activities	of	these	entities	and	does	not consolidate	these	entities.

•Corporate:	The	Private	Equity	business,	within	Corporate,	is	involved	with	entities	that	may	meet	the	definition	of	VIEs.	However,	the	Firm's	Private	Equity	business is	generally	subject	to	specialized	investment	company	accounting,	which	does	not	require	the	consolidation	of	investments,	including	VIEs.

The	Firm	also	invests	in	and	provides	financing	and	other	services	to	VIEs	sponsored	by	third	parties,	as	described	on	page	271	of	this	Note.

# Significant	Firm-sponsored	variable	interest	entities

# Credit	card	securitizations

The	Card	business	securitizes	both	originated	and	purchased	credit	card	loans, primarily	through	the	Chase	Issuance	Trust	(the	"Trust").	The	Firm's	continuing involvement	in	credit	card	securitizations	includes	servicing	the	receivables, retaining	an	undivided	seller's	interest	in	the	receivables,	retaining	certain	senior and	subordinated	securities	and	maintaining	escrow	accounts.

The	Firm	is	considered	to	be	the	primary	beneficiary	of	these	Firm-sponsored credit	card	securitization	trusts	based	on	the	Firm's	ability	to	direct	the	activities of	these	VIEs	through	its	servicing	responsibilities	and	other	duties,	including making	decisions	as	to	the	receivables	that	are	transferred	into	those	trusts	and	as to	any	related	modifications	and	workouts.	Additionally,	the	nature	and	extent	of the	Firm's	other	continuing	involvement	with	the	trusts,	as	indicated	above, obligates	the	Firm	to	absorb	losses	and	gives	the	Firm	the	right	to	receive	certain benefits	from	these	VIEs	that	could	potentially	be	significant.

The	underlying	securitized	credit	card	receivables	and	other	assets	of	the securitization	trusts	are	available	only	for	payment	of	the	beneficial	interests issued	by	the	securitization	trusts;	they	are	not	available	to	pay	the	Firm's	other obligations	or	the	claims	of	the	Firm's	other	creditors.

The	agreements	with	the	credit	card	securitization	trusts	require	the	Firm	to maintain	a	minimum	undivided	interest	in	the	credit	card	trusts	(which	is generally	4%).	As	of	December	31,	2015	and	2014,	the	Firm	held	undivided interests	in	Firm-sponsored	credit	card	securitization	trusts	of	$13.6	billion	and $10.9	billion,	respectively.	The	Firm	maintained	an	average	undivided	interest	in principal	receivables	owned	by	those	trusts	of	approximately	22%	for	both	the years	ended	December	31,	2015	and	2014.	As	of	December	31,	2015	and	2014, the	Firm	also	retained	$0	million	and	$40	million	of	senior	securities,	and	as	of both	December	31,	2015	and	2014,	retained	$5.3	billion	of	subordinated securities	in	certain	of	its	credit	card	securitization	trusts.	The	Firm's	undivided interests	in	the	credit	card	trusts	and	securities	retained	are	eliminated	in consolidation.

# Firm-sponsored	mortgage	and	other	securitization	trusts

The	Firm	securitizes	(or	has	securitized)	originated	and	purchased	residential mortgages,	commercial	mortgages	and	other	consumer	loans	(including	student loans)	primarily	in	its	CCB	and	CIB	businesses.	Depending	on	the

particular	transaction,	as	well	as	the	respective	business	involved,	the	Firm	may act	as	the	servicer	of	the	loans	and/or	retain	certain	beneficial	interests	in	the securitization	trusts.

The	following	table	presents	the	total	unpaid	principal	amount	of	assets	held	in	Firm-sponsored	private-label	securitization	entities,	including	those	in	which	the	Firm	has continuing	involvement,	and	those	that	are	consolidated	by	the	Firm.	Continuing	involvement	includes	servicing	the	loans;	holding	senior	interests	or	subordinated interests;	recourse	or	guarantee	arrangements;	and	derivative	transactions.	In	certain	instances,	the	Firm's	only	continuing	involvement	is	servicing	the	loans.	See Securitization	activity	on	page	272	of	this	Note	for	further	information	regarding	the	Firm's	cash	flows	with	and	interests	retained	in	nonconsolidated	VIEs,	and	pages 272–273	of	this	Note	for	information	on	the	Firm's	loan	sales	to	U.S.	government	agencies.

|  |  | Principal	amount	outstanding |  | JPMorgan	Chase	interest	in	securitized	assets	in | nonconsolidated	VIEs(c)(d)(e) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2015\t(a)\t(in\tbillions) | Total\tassets\theld\tby\nsecuritization\tVIEs | Assets\theld\tin\nconsolidated\nsecuritization\tVIEs | Assets\theld\tin\nnonconsolidated\nsecuritization\tVIEs\twith\ncontinuing\tinvolvement | Trading\tassets | AFS\tsecurities | Total\tinterests\theld\nby\tJPMorgan\tChase |
| Securitization-related |  |  |  |  |  |  |
| Residential\tmortgage: |  |  |  |  |  |  |
| Prime/Alt-A\tand\toption\tARMs | $85.7 | $1.4 | $66.7 | $0.4 | $1.6 | $2.0 |
| Subprime | 24.4 | 0.1 | 22.6 | 0.1 | — | 0.1 |
| Commercial\tand\tother(b) | 123.5 | 0.1 | 80.3 | 0.4 | 3.5 | 3.9 |
| Total | $233.6 | $1.6 | $169.6 | $0.9 | $5.1 | $6.0 |

|  |  | Principal	amount	outstanding |  | JPMorgan	Chase	interest	in	securitized	assets	in | nonconsolidated	VIEs(c)(d)(e) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2014(a)\t(in\tbillions) | Total\tassets\theld\tby\nsecuritization\tVIEs | Assets\theld\tin\nconsolidated\nsecuritization\tVIEs | Assets\theld\tin\nnonconsolidated\nsecuritization\tVIEs\twith\ncontinuing\tinvolvement | Trading\tassets | AFS\tsecurities | Total\tinterests\theld\nby\tJPMorgan\tChase |
| Securitization-related |  |  |  |  |  |  |
| Residential\tmortgage: |  |  |  |  |  |  |
| Prime/Alt-A\tand\toption\tARMs | $96.3 | $2.7 | $78.3 | $0.5 | $0.7 | $1.2 |
| Subprime | 28.4 | 0.8 | 25.7 | 0.1 | — | 0.1 |
| Commercial\tand\tother(b) | 129.6 | 0.2 | 94.4 | 0.4 | 3.5 | 3.9 |
| Total | $254.3 | $3.7 | $198.4 | $1.0 | $4.2 | $5.2 |

(a) Excludes	U.S.	government	agency	securitizations.	See	pages	272–273	of	this	Note	for	information	on	the	Firm's	loan	sales	to	U.S.	government	agencies.

(b) Consists	of	securities	backed	by	commercial	loans	(predominantly	real	estate)	and	non-mortgage-related	consumer	receivables	purchased	from	third	parties.	The	Firm	generally	does	not	retain	a residual	interest	in	its	sponsored	commercial	mortgage	securitization	transactions.

(c) The	table	above	excludes	the	following:	retained	servicing	(see	Note	17	for	a	discussion	of	MSRs);	securities	retained	from	loan	sales	to	U.S.	government	agencies;	interest	rate	and	foreign exchange	derivatives	primarily	used	to	manage	interest	rate	and	foreign	exchange	risks	of	securitization	entities	(See	Note	6	for	further	information	on	derivatives);	senior	and	subordinated securities	of	$163	million	and	$73	million,	respectively,	at	December	31,	2015,	and	$136	million	and	$34	million,	respectively,	at	December	31,	2014,	which	the	Firm	purchased	in	connection with	CIB's	secondary	market-making	activities.

(d) Includes	interests	held	in	re-securitization	transactions.

(e) As	of	December	31,	2015	and	2014,	76%	and	77%,	respectively,	of	the	Firm's	retained	securitization	interests,	which	are	carried	at	fair	value,	were	risk-rated	"A"	or	better,	on	an	S&P-equivalent basis.	The	retained	interests	in	prime	residential	mortgages	consisted	of	$1.9	billion	and	$1.1	billion	of	investment-grade	and	$93	million	and	$185	million	of	noninvestment-grade	retained	interests at	December	31,	2015	and	2014,	respectively.	The	retained	interests	in	commercial	and	other	securitizations	trusts	consisted	of	 $3.7	billion	and	$3.7	billion	of	investment-grade	and	$198	million and	$194	million	of	noninvestment-grade	retained	interests	at	December	31,	2015	and	2014,	respectively.

# Residential	mortgage

The	Firm	securitizes	residential	mortgage	loans	originated	by	CCB,	as	well	as residential	mortgage	loans	purchased	from	third	parties	by	either	CCB	or	CIB. CCB	generally	retains	servicing	for	all	residential	mortgage	loans	originated	or purchased	by	CCB,	and	for	certain	mortgage	loans	purchased	by	CIB.	For securitizations	holding	loans	serviced	by	CCB,	the	Firm	has	the	power	to	direct the	significant	activities	of	the	VIE	because	it	is	responsible	for	decisions	related to	loan	modifications	and	workouts.	CCB	may	also	retain	an	interest	upon securitization.

In	addition,	CIB	engages	in	underwriting	and	trading	activities	involving securities	issued	by	Firm-sponsored	securitization	trusts.	As	a	result,	CIB	at times	retains	senior	and/or	subordinated	interests	(including	residual	interests)	in residential	mortgage	securitizations	at	the	time	of	securitization,	and/or reacquires	positions	in	the	secondary	market	in	the	normal	course	of	business.	In certain	instances,	as	a	result	of	the	positions	retained	or	reacquired	by	CIB	or held	by	CCB,	when	considered	together	with	the	servicing	arrangements	entered into	by	CCB,	the	Firm	is	deemed	to	be	the	primary	beneficiary	of	certain securitization	trusts.	See	the	table	on	page	271	of	this	Note	for	more	information on	consolidated	residential	mortgage	securitizations.

The	Firm	does	not	consolidate	a	residential	mortgage	securitization	(Firm- sponsored	or	third-party-sponsored)	when	it	is	not	the	servicer	(and	therefore does	not	have	the	power	to	direct	the	most	significant	activities	of	the	trust)	or does	not	hold	a	beneficial	interest	in	the	trust	that	could	potentially	be	significant to	the	trust.	At	December	31,	2015	and	2014,	the	Firm	did	not	consolidate	the assets	of	certain	Firm-sponsored	residential	mortgage	securitization	VIEs,	in which	the	Firm	had	continuing	involvement,	primarily	due	to	the	fact	that	the Firm	did	not	hold	an	interest	in	these	trusts	that	could	potentially	be	significant	to the	trusts.	See	the	table	on	page	271	of	this	Note	for	more	information	on	the consolidated	residential	mortgage	securitizations,	and	the	table	on	the	previous page	of	this	Note	for	further	information	on	interests	held	in	nonconsolidated residential	mortgage	securitizations.

# Commercial	mortgages	and	other	consumer	securitizations

CIB	originates	and	securitizes	commercial	mortgage	loans,	and	engages	in underwriting	and	trading	activities	involving	the	securities	issued	by securitization	trusts.	CIB	may	retain	unsold	senior	and/or	subordinated	interests in	commercial	mortgage	securitizations	at	the	time	of	securitization	but, generally,	the	Firm	does	not	service	commercial	loan	securitizations.	For commercial	mortgage	securitizations	the	power	to	direct	the	significant	activities of	the	VIE	generally	is	held	by	the	servicer	or	investors	in	a	specified	class	of securities	("controlling	class").	See	the	table	on	page	271	of	this	Note	for	more information	on	the	consolidated	commercial	mortgage	securitizations,	and	the table	on	the	previous	page	of	this	Note	for	further	information	on	interests	held in	nonconsolidated	securitizations.

The	Firm	retains	servicing	responsibilities	for	certain	student	loan securitizations.	The	Firm	has	the	power	to	direct	the	activities	of	these	VIEs through	these	servicing	responsibilities.	See	the	table	on	page	271	of	this	Note for	more	information	on	the	consolidated	student	loan	securitizations,	and	the table	on	the	previous	page	of	this	Note	for	further	information	on	interests	held in	nonconsolidated	securitizations.

# Re-securitizations

The	Firm	engages	in	certain	re-securitization	transactions	in	which	debt securities	are	transferred	to	a	VIE	in	exchange	for	new	beneficial	interests.	These transfers	occur	in	connection	with	both	agency	(Federal	National	Mortgage Association	("Fannie	Mae"),	Federal	Home	Loan	Mortgage	Company	("Freddie Mac")	and	Ginnie	Mae)	and	nonagency	(private-label)	sponsored	VIEs,	which may	be	backed	by	either	residential	or	commercial	mortgages.	The	Firm's consolidation	analysis	is	largely	dependent	on	the	Firm's	role	and	interest	in	the re-securitization	trusts.	During	the	years	ended	December	31,	2015,	2014	and 2013,	the	Firm	transferred	$21.9	billion,	$22.7	billion	and	$25.3	billion, respectively,	of	securities	to	agency	VIEs,	and	$777	million,	$1.1	billion	and	$55 million,	respectively,	of	securities	to	private-label	VIEs.

Most	re-securitizations	with	which	the	Firm	is	involved	are	client-driven transactions	in	which	a	specific	client	or	group	of	clients	is	seeking	a	specific return	or	risk	profile.	For	these	transactions,	the	Firm	has	concluded	that	the decision-making	power	of	the	entity	is	shared	between	the	Firm	and	its	clients, considering	the	joint	effort	and	decisions	in	establishing	the	re-securitization trust	and	its	assets,	as	well	as	the	significant	economic	interest	the	client	holds	in the	re-securitization	trust;	therefore	the	Firm	does	not	consolidate	the	re- securitization	VIE.

In	more	limited	circumstances,	the	Firm	creates	a	re-securitization	trust independently	and	not	in	conjunction	with	specific	clients.	In	these circumstances,	the	Firm	is	deemed	to	have	the	unilateral	ability	to	direct	the	most significant	activities	of	the	re-securitization	trust	because	of	the	decisions	made during	the	establishment	and	design	of	the	trust;	therefore,	the	Firm	consolidates the	re-securitization	VIE	if	the	Firm	holds	an	interest	that	could	potentially	be significant.

Additionally,	the	Firm	may	invest	in	beneficial	interests	of	third-party	re- securitizations	and	generally	purchases	these	interests	in	the	secondary	market. In	these	circumstances,	the	Firm	does	not	have	the	unilateral	ability	to	direct	the most	significant	activities	of	the	re-securitization	trust,	either	because	it	was	not involved	in	the	initial	design	of	the	trust,	or	the	Firm	is	involved	with	an independent	third-party	sponsor	and	demonstrates	shared	power	over	the creation	of	the	trust;	therefore,	the	Firm	does	not	consolidate	the	re-securitization VIE.

As	of	December	31,	2015	and	2014,	total	assets	(including	the	notional	amount of	interest-only	securities)	of	nonconsolidated	Firm-sponsored	private-label	re- securitization	entities	in	which	the	Firm	has	continuing	involvement	were	$2.2 billion	and	$2.9	billion,	respectively.	At	December	31,	2015	and	2014,	the	Firm held	$4.6	billion	and	$2.4	billion,	respectively,	of	interests	in	nonconsolidated agency	re-securitization	entities.	The	Firm's	exposure	to	non-consolidated private-label	re-securitization	entities	as	of	December	31,	2015	and	2014	was	not material.	As	of	December	31,	2015	and	2014,	the	Firm	did	not	consolidate	any agency	re-securitizations.	As	of	December	31,	2015	and	2014,	the	Firm consolidated	an	insignificant	amount	of	assets	and	liabilities	of	Firm-sponsored private-label	re-securitizations.

# Multi-seller	conduits

Multi-seller	conduit	entities	are	separate	bankruptcy	remote	entities	that	provide secured	financing,	collateralized	by	pools	of	receivables	and	other	financial assets,	to	customers	of	the	Firm.	The	conduits	fund	their	financing	facilities through	the	issuance	of	highly	rated	commercial	paper.	The	primary	source	of repayment	of	the	commercial	paper	is	the	cash	flows	from	the	pools	of	assets.	In most	instances,	the	assets	are	structured	with	deal-specific	credit	enhancements provided	to	the	conduits	by	the	customers	(i.e.,	sellers)	or	other	third	parties. Deal-specific	credit	enhancements	are	generally	structured	to	cover	a	multiple	of historical	losses	expected	on	the	pool	of	assets,	and	are	typically	in	the	form	of overcollateralization	provided	by	the	seller.	The	deal-specific	credit enhancements	mitigate	the	Firm's	potential	losses	on	its	agreements	with	the conduits.

To	ensure	timely	repayment	of	the	commercial	paper,	and	to	provide	the	conduits with	funding	to	provide	financing	to	customers	in	the	event	that	the	conduits	do not	obtain	funding	in	the	commercial	paper	market,	each	asset	pool	financed	by the	conduits	has	a	minimum	100%	deal-specific	liquidity	facility	associated	with it	provided	by	JPMorgan	Chase	Bank,	N.A.	JPMorgan	Chase	Bank,	N.A.	also provides	the	multi-seller	conduit	vehicles	with	uncommitted	program-wide liquidity	facilities	and	program-wide	credit	enhancement	in	the	form	of	standby letters	of	credit.	The	amount	of	program-wide	credit	enhancement	required	is based	upon	commercial	paper	issuance	and	approximates	10%	of	the	outstanding balance.

The	Firm	consolidates	its	Firm-administered	multi-seller	conduits,	as	the	Firm has	both	the	power	to	direct	the	significant	activities	of	the	conduits	and	a potentially	significant	economic	interest	in	the	conduits.	As	administrative	agent and	in	its	role	in	structuring	transactions,	the	Firm	makes	decisions	regarding asset	types	and	credit	quality,	and	manages	the	commercial	paper	funding	needs of	the	conduits.	The	Firm's	interests	that	could	potentially	be	significant	to	the VIEs	include	the	fees	received	as	administrative	agent	and	liquidity	and program-wide	credit	enhancement	provider,	as	well	as	the	potential	exposure created	by	the	liquidity	and	credit

enhancement	facilities	provided	to	the	conduits.	See	page	271	of	this	Note	for further	information	on	consolidated	VIE	assets	and	liabilities.

In	the	normal	course	of	business,	JPMorgan	Chase	makes	markets	in	and	invests in	commercial	paper	issued	by	the	Firm-administered	multi-seller	conduits.	The Firm	held	$15.7	billion	and	$5.7	billion	of	the	commercial	paper	issued	by	the Firm-administered	multi-seller	conduits	at	December	31,	2015	and	2014, respectively.	The	Firm's	investments	reflect	the	Firm's	funding	needs	and capacity	and	were	not	driven	by	market	illiquidity.	The	Firm	is	not	obligated under	any	agreement	to	purchase	the	commercial	paper	issued	by	the	Firm- administered	multi-seller	conduits.

Deal-specific	liquidity	facilities,	program-wide	liquidity	and	credit	enhancement provided	by	the	Firm	have	been	eliminated	in	consolidation.	The	Firm	or	the Firm-administered	multi-seller	conduits	provide	lending-related	commitments	to certain	clients	of	the	Firm-administered	multi-seller	conduits.	The	unfunded portion	of	these	commitments	was	$5.6	billion	and	$9.9	billion	at	December	31, 2015	and	2014,	respectively,	and	are	reported	as	off-balance	sheet	lending- related	commitments.	For	more	information	on	off-balance	sheet	lending-related commitments,	see	Note	29.

# VIEs	associated	with	investor	intermediation	activities

As	a	financial	intermediary,	the	Firm	creates	certain	types	of	VIEs	and	also structures	transactions	with	these	VIEs,	typically	using	derivatives,	to	meet investor	needs.	The	Firm	may	also	provide	liquidity	and	other	support.	The	risks inherent	in	the	derivative	instruments	or	liquidity	commitments	are	managed similarly	to	other	credit,	market	or	liquidity	risks	to	which	the	Firm	is	exposed. The	principal	types	of	VIEs	for	which	the	Firm	is	engaged	in	on	behalf	of	clients are	municipal	bond	vehicles.

# Municipal	bond	vehicles

Municipal	bond	vehicles	or	tender	option	bond	("TOB")	trusts	allow	investors	to finance	their	municipal	bond	investments	at	short-term	rates.	In	a	typical	TOB transaction,	the	trust	purchases	highly	rated	municipal	bond(s)	of	a	single	issuer and	funds	the	purchase	by	issuing	two	types	of	securities:	(1)	puttable	floating- rate	certificates	("Floaters")	and	(2)	inverse	floating-rate	residual	interests ("Residuals").	The	Floaters	are	typically	purchased	by	money	market	funds	or other	short-term	investors	and	may	be	tendered,	with	requisite	notice,	to	the	TOB trust.	The	Residuals	are	retained	by	the	investor	seeking	to	finance	its	municipal bond	investment.	TOB	transactions	where	the	Residual	is	held	by	a	third	party investor	are	typically	known	as	Customer	TOB	trusts,	and	Non-Customer	TOB trusts	are	transactions	where	the	Residual	is	retained	by	the	Firm.	The	Firm serves	as	sponsor	for	all	Non-Customer	TOB	transactions	and	certain	Customer TOB	transactions	established	prior	to	2014.	The	Firm	may	provide	various services	to	a	TOB	trust,	including	remarketing	agent,	liquidity	or	tender	option provider,	and/or	sponsor.

J.P.	Morgan	Securities	LLC	may	serve	as	a	remarketing	agent	on	the	Floaters	for TOB	trusts.	The	remarketing	agent	is	responsible	for	establishing	the	periodic variable	rate	on	the	Floaters,	conducting	the	initial	placement	and	remarketing tendered	Floaters.	The	remarketing	agent	may,	but	is	not	obligated	to	make markets	in	Floaters.	At	December	31,	2015	and	2014,	the	Firm	held	an insignificant	amount	of	these	Floaters	on	its	Consolidated	balance	sheets	and	did not	hold	any	significant	amounts	during	2015.

JPMorgan	Chase	Bank,	N.A.	or	J.P.	Morgan	Securities	LLC	often	serves	as	the sole	liquidity	or	tender	option	provider	for	the	TOB	trusts.	The	liquidity provider's	obligation	to	perform	is	conditional	and	is	limited	by	certain	events ("Termination	Events"),	which	include	bankruptcy	or	failure	to	pay	by	the municipal	bond	issuer	or	credit	enhancement	provider,	an	event	of	taxability	on the	municipal	bonds	or	the	immediate	downgrade	of	the	municipal	bond	to	below investment	grade.	In	addition,	the	liquidity	provider's	exposure	is	typically further	limited	by	the	high	credit	quality	of	the	underlying	municipal	bonds,	the excess	collateralization	in	the	vehicle,	or,	in	certain	transactions,	the reimbursement	agreements	with	the	Residual	holders.

Holders	of	the	Floaters	may	"put,"	or	tender,	their	Floaters	to	the	TOB	trust.	If the	remarketing	agent	cannot	successfully	remarket	the	Floaters	to	another investor,	the	liquidity	provider	either	provides	a	loan	to	the	TOB	trust	for	the purchase	of	or	directly	purchases	the	tendered	Floaters.	In	certain	Customer	TOB transactions,	the	Firm,	as	liquidity	provider,	has	entered	into	a	reimbursement agreement	with	the	Residual	holder.	In	those	transactions,	upon	the	termination of	the	vehicle,	if	the	proceeds	from	the	sale	of	the	underlying	municipal	bonds are	not	sufficient	to	repay	amounts	owed	to	the	Firm,	as	liquidity	or	tender	option provider,	the	Firm	has	recourse	to	the	third	party	Residual	holders	for	any shortfall.	Residual	holders	with	reimbursement	agreements	are	required	to	post collateral	with	the	Firm	to	support	such	reimbursement	obligations	should	the market	value	of	the	underlying	municipal	bonds	decline.	The	Firm	does	not	have any	intent	to	protect	Residual	holders	from	potential	losses	on	any	of	the underlying	municipal	bonds.

TOB	trusts	are	considered	to	be	variable	interest	entities.	The	Firm	consolidates Non-Customer	TOB	trusts	because	as	the	Residual	holder,	the	Firm	has	the	right to	make	decisions	that	significantly	impact	the	economic	performance	of	the municipal	bond	vehicle,	and	have	the	right	to	receive	benefits	and	bear	losses that	could	potentially	be	significant	to	the	municipal	bond	vehicle.	The	Firm	does not	consolidate	Customer	TOB	trusts,	since	the	Firm	does	not	have	the	power	to make	decisions	that	significantly	impact	the	economic	performance	of	the municipal	bond	vehicle.	Certain	non-consolidated	Customer	TOB	trusts	are sponsored	by	a	third	party,	and	not	the	Firm.	See	page	271	of	this	Note	for further	information	on	consolidated	municipal	bond	vehicles.

The	Firm's	exposure	to	nonconsolidated	municipal	bond	VIEs	at	December	31,	2015	and	2014,	including	the	ratings	profile	of	the	VIEs'	assets,	was	as	follows.

(a) Represents	the	excess	of	the	fair	values	of	municipal	bond	assets	available	to	repay	the	liquidity	facilities,	if	drawn.

(b) The	ratings	scale	is	presented	on	an	S&P-equivalent	basis.

# VIEs	sponsored	by	third	parties

The	Firm	enters	into	transactions	with	VIEs	structured	by	other	parties.	These include,	for	example,	acting	as	a	derivative	counterparty,	liquidity	provider, investor,	underwriter,	placement	agent,	remarketing	agent,	trustee	or	custodian. These	transactions	are	conducted	at	arm's-length,	and	individual	credit	decisions are	based	on	the	analysis	of	the	specific	VIE,	taking	into	consideration	the

quality	of	the	underlying	assets.	Where	the	Firm	does	not	have	the	power	to direct	the	activities	of	the	VIE	that	most	significantly	impact	the	VIE's	economic performance,	or	a	variable	interest	that	could	potentially	be	significant,	the	Firm records	and	reports	these	positions	on	its	Consolidated	balance	sheets	similarly	to the	way	it	would	record	and	report	positions	in	respect	of	any	other	third-party transaction.

# Consolidated	VIE	assets	and	liabilities

The	following	table	presents	information	on	assets	and	liabilities	related	to	VIEs	consolidated	by	the	Firm	as	of	December	31,	2015	and	2014.

|  |  | Assets | Assets |  |  | Liabilities |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2015\t(in\tbillions) (a) | Trading\tassets | Loans | Other(c) | Total\nassets(d) | Beneficial\ninterests\tin\nVIE\tassets(e) | Other(f) | Total\nliabilities |
| VIE\tprogram\ttype |  |  |  |  |  |  |  |
| Firm-sponsored\tcredit\tcard\ttrusts | $— | $47.4 | $0.7 | $48.1 | $27.9 | $— | $27.9 |
| Firm-administered\tmulti-seller\tconduits | — | 24.4 | — | 24.4 | 8.7 | — | 8.7 |
| Municipal\tbond\tvehicles | 2.7 | — | — | 2.7 | 2.6 | — | 2.6 |
| Mortgage\tsecuritization\tentities(b) | 0.8 | 1.4 | — | 2.2 | 0.8 | 0.7 | 1.5 |
| Student\tloan\tsecuritization\tentities | — | 1.9 | 0.1 | 2.0 | 1.8 | — | 1.8 |
| Other | 0.2 | — | 2.0 | 2.2 | 0.1 | 0.1 | 0.2 |
| Total | $3.7 | $75.1 | $2.8 | $81.6 | $41.9 | $0.8 | $42.7 |

|  |  | Assets |  |  |  | Liabilities |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2014\t(in\tbillions)(a) | Trading\tassets | Loans | Other(c) | Total\nassets(d) | Beneficial\ninterests\tin\nVIE\tassets(e) | Other(f) | Total\nliabilities |
| VIE\tprogram\ttype |  |  |  |  |  |  |  |
| Firm-sponsored\tcredit\tcard\ttrusts | $— | $48.3 | $0.7 | $49.0 | $31.2 | $— | $31.2 |
| Firm-administered\tmulti-seller\tconduits | — | 17.7 | 0.1 | 17.8 | 12.0 | — | 12.0 |
| Municipal\tbond\tvehicles | 5.3 | — | — | 5.3 | 4.9 | — | 4.9 |
| Mortgage\tsecuritization\tentities(b) | 3.3 | 0.7 | — | 4.0 | 2.1 | 0.8 | 2.9 |
| Student\tloan\tsecuritization\tentities | 0.2 | 2.2 | — | 2.4 | 2.1 | — | 2.1 |
| Other | 0.3 | — | 1.0 | 1.3 | — | 0.2 | 0.2 |
| Total | $9.1 | $68.9 | $1.8 | $79.8 | $52.3 | $1.0 | $53.3 |

(a) Excludes	intercompany	transactions,	which	were	eliminated	in	consolidation.

(b) Includes	residential	and	commercial	mortgage	securitizations	as	well	as	re-securitizations.

(c) Includes	assets	classified	as	cash,	AFS	securities,	and	other	assets	within	the	Consolidated	balance	sheets.

(d) The	assets	of	the	consolidated	VIEs	included	in	the	program	types	above	are	used	to	settle	the	liabilities	of	those	entities.	The	difference	between	total	assets	and	total	liabilities	recognized	for consolidated	VIEs	represents	the	Firm's	interest	in	the	consolidated	VIEs	for	each	program	type.

(e) The	interest-bearing	beneficial	interest	liabilities	issued	by	consolidated	VIEs	are	classified	in	the	line	item	on	the	Consolidated	balance	sheets	titled,	"Beneficial	interests	issued	by	consolidated variable	interest	entities."	The	holders	of	these	beneficial	interests	do	not	have	recourse	to	the	general	credit	of	JPMorgan	Chase.	Included	in	beneficial	interests	in	VIE	assets	are	long-term beneficial	interests	of	$30.6	billion	and	$35.4	billion	at	December	31,	2015	and	2014,	respectively.	The	maturities	of	the	long-term	beneficial	interests	as	of	December	31,	2015,	were	as	follows: $5.1	billion	under	one	year,	$21.6	billion	between	one	and	five	years,	and	 $3.9	billion	over	five	years,	all	respectively.

(f) Includes	liabilities	classified	as	accounts	payable	and	other	liabilities	in	the	Consolidated	balance	sheets.

# Loan	securitizations

The	Firm	has	securitized	and	sold	a	variety	of	loans,	including	residential mortgage,	credit	card,	student	and	commercial	(primarily	related	to	real	estate) loans,	as	well	as	debt	securities.	The	purposes	of	these	securitization	transactions were	to	satisfy	investor	demand	and	to	generate	liquidity	for	the	Firm.

For	loan	securitizations	in	which	the	Firm	is	not	required	to	consolidate	the	trust, the	Firm	records	the	transfer	of	the	loan	receivable	to	the	trust	as	a	sale	when	all of	the	following	accounting	criteria	for	a	sale	are	met:	(1)	the	transferred financial	assets	are	legally	isolated	from	the	Firm's	creditors;	(2)	the	transferee or	beneficial	interest

holder	can	pledge	or	exchange	the	transferred	financial	assets;	and	(3)	the	Firm does	not	maintain	effective	control	over	the	transferred	financial	assets	(e.g.,	the Firm	cannot	repurchase	the	transferred	assets	before	their	maturity	and	it	does not	have	the	ability	to	unilaterally	cause	the	holder	to	return	the	transferred assets).

For	loan	securitizations	accounted	for	as	a	sale,	the	Firm	recognizes	a	gain	or loss	based	on	the	difference	between	the	value	of	proceeds	received	(including cash,	beneficial	interests,	or	servicing	assets	received)	and	the	carrying	value	of the	assets	sold.	Gains	and	losses	on	securitizations	are	reported	in	noninterest revenue.

# Securitization	activity

The	following	table	provides	information	related	to	the	Firm's	securitization	activities	for	the	years	ended	December	31,	2015,	2014	and	2013,	related	to	assets	held	in JPMorgan	Chase-sponsored	securitization	entities	that	were	not	consolidated	by	the	Firm,	and	where	sale	accounting	was	achieved	based	on	the	accounting	rules	in	effect at	the	time	of	the	securitization.

|  | 2015 | 2015 | 2014 | 2014 |  | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31, | Residential | Commercial\tand | Residential | Commercial\tand | Residential | Commercial\tand |
| (in\tmillions,\texcept\trates)(a) | mortgage(d)(e) | other(e)(f) | mortgage(d)(e) | other(e)(f) | mortgage(d)(e) | other(e)(f) |
| Principal\tsecuritized | $3,008 | $11,933 | $2,558 | $11,911 | $1,404 | $11,318 |
| All\tcash\tflows\tduring\tthe\tperiod: |  |  |  |  |  |  |
| Proceeds\tfrom\tnew\tsecuritizations(b) | $3,022 | $12,011 | $2,569 | $12,079 | $1,410 | $11,507 |
| Servicing\tfees\tcollected | 528 | 3 | 557 | 4 | 576 | 5 |
| Purchases\tof\tpreviously\ttransferred\tfinancial\tassets\t(or\tthe\nunderlying\tcollateral)(c) | 3 | — | 121 | — | 294 | — |
| Cash\tflows\treceived\ton\tinterests | 407 | 597 | 179 | 578 | 156 | 325 |

(a) Excludes	re-securitization	transactions.

(b) Proceeds	from	residential	mortgage	securitizations	were	received	in	the	form	of	securities.	During	2015,	 $3.0	billion	of	residential	mortgage	securitizations	were	received	as	securities	and	classified in	level	2,	and	$59	million	were	classified	in	level	3	of	the	fair	value	hierarchy.	During	2014,	 $2.4	billion	of	residential	mortgage	securitizations	were	received	as	securities	and	classified	in	level	2, and	$185	million	were	classified	in	level	3	of	the	fair	value	hierarchy.	During	2013,	 $1.4	billion	of	residential	mortgage	securitizations	were	received	as	securities	and	classified	in	level	2.	Proceeds from	commercial	mortgage	securitizations	were	received	as	securities	and	cash.	During	2015,	$12.0	billion	of	proceeds	from	commercial	mortgage	securitizations	were	received	as	securities	and classified	in	level	2,	and	$43	million	of	proceeds	were	classified	in	level	3	of	the	fair	value	hierarchy;	and	 zero	of	proceeds	from	commercial	mortgage	securitizations	were	received	as	cash.	During 2014,	$11.4	billion	of	proceeds	from	commercial	mortgage	securitizations	were	received	as	securities	and	classified	in	level	2,	and	 $130	million	of	proceeds	were	classified	in	level	3	of	the	fair value	hierarchy:	and	$568	million	of	proceeds	from	commercial	mortgage	securitizations	were	received	as	cash.	During	2013,	$11.3	billion	of	commercial	mortgage	securitizations	were	classified in	level	2	of	the	fair	value	hierarchy,	and	$207	million	of	proceeds	from	commercial	mortgage	securitizations	were	received	as	cash.

(c) Includes	cash	paid	by	the	Firm	to	reacquire	assets	from	off–balance	sheet,	nonconsolidated	entities	–	for	example,	loan	repurchases	due	to	representation	and	warranties	and	servicer	clean-up	calls. (d) Includes	prime,	Alt-A,	subprime,	and	option	ARMs.	Excludes	certain	loan	securitization	transactions	entered	into	with	Ginnie	Mae,	Fannie	Mae	and	Freddie	Mac.

(e) Key	assumptions	used	to	measure	residential	mortgage	retained	interests	originated	during	the	year	included	weighted-average	life	(in	years)	of	 4.2,	5.9	and	3.9	for	the	years	ended	December	31, 2015,	2014	and	2013,	respectively,	and	weighted-average	discount	rate	of	2.9%,	3.4%	and	2.5%	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.	Key	assumptions	used	to measure	commercial	and	other	retained	interests	originated	during	the	year	included	weighted-average	life	(in	years)	of	6.2,	6.5	and	8.3	for	the	years	ended	December	31,	2015,	2014,	and	2013, respectively,	and	weighted-average	discount	rate	of	4.1%,	4.8%	and	3.2%	for	the	years	ended	December	31,	2015,	2014	and	2013,	respectively.

(f) Includes	commercial	and	student	loan	securitizations.

# Loans	and	excess	MSRs	sold	to	U.S.	government-sponsored	enterprises ("U.S.	GSEs"),	loans	in	securitization	transactions	pursuant	to	Ginnie	Mae guidelines,	and	other	third-party-sponsored	securitization	entities

In	addition	to	the	amounts	reported	in	the	securitization	activity	tables	above,	the Firm,	in	the	normal	course	of	business,	sells	originated	and	purchased	mortgage loans	and	certain	originated	excess	MSRs	on	a	nonrecourse	basis,	predominantly to	U.S.	GSEs.	These	loans	and	excess	MSRs

are	sold	primarily	for	the	purpose	of	securitization	by	the	U.S.	GSEs,	who provide	certain	guarantee	provisions	(e.g.,	credit	enhancement	of	the	loans).	The Firm	also	sells	loans	into	securitization	transactions	pursuant	to	Ginnie	Mae guidelines;	these	loans	are	typically	insured	or	guaranteed	by	another	U.S. government	agency.	The	Firm	does	not	consolidate	the	securitization	vehicles underlying	these	transactions	as	it	is	not	the	primary	beneficiary.	For	a	limited number	of	loan	sales,	the	Firm	is	obligated	to	share	a	portion	of	the	credit	risk associated	with	the	sold	loans

with	the	purchaser.	See	Note	29	for	additional	information	about	the	Firm's	loan sales-	and	securitization-related	indemnifications.

See	Note	17	for	additional	information	about	the	impact	of	the	Firm's	sale	of certain	excess	MSRs.

The	following	table	summarizes	the	activities	related	to	loans	sold	to	the	U.S. GSEs,	loans	in	securitization	transactions	pursuant	to	Ginnie	Mae	guidelines,	and other	third-party-sponsored	securitization	entities.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Carrying\tvalue\tof\tloans\tsold | $42,161 | $55,802 | $166,028 |
| Proceeds\treceived\tfrom\tloan\tsales\tas\ncash | $313 | $260 | $782 |
| Proceeds\tfrom\tloans\tsales\tas\nsecurities(a) | 41,615 | 55,117 | 163,373 |
| Total\tproceeds\treceived\tfrom\tloan\nsales(b) | $41,928 | $55,377 | $164,155 |
| Gains\ton\tloan\tsales(c) | $299 | $316 | $302 |

(a) Predominantly	includes	securities	from	U.S.	GSEs	and	Ginnie	Mae	that	are	generally	sold shortly	after	receipt.

(b) Excludes	the	value	of	MSRs	retained	upon	the	sale	of	loans.	Gains	on	loan	sales	include	the value	of	MSRs.

(c) The	carrying	value	of	the	loans	accounted	for	at	fair	value	approximated	the	proceeds received	upon	loan	sale.

# Options	to	repurchase	delinquent	loans

In	addition	to	the	Firm's	obligation	to	repurchase	certain	loans	due	to	material breaches	of	representations	and	warranties	as	discussed	in	Note	29,	the	Firm	also has	the	option	to	repurchase	delinquent	loans	that	it	services	for	Ginnie	Mae	loan pools,	as	well	as	for	other	U.S.	government	agencies	under	certain	arrangements. The	Firm	typically	elects	to	repurchase	delinquent	loans	from	Ginnie	Mae	loan pools	as	it	continues	to	service	them	and/or	manage	the	foreclosure	process	in accordance	with	the	applicable	requirements,	and	such	loans	continue	to	be insured	or	guaranteed.	When	the	Firm's	repurchase	option	becomes	exercisable, such	loans	must	be	reported	on	the	Consolidated	balance	sheets	as	a	loan	with	a corresponding	liability.	As	of	December	31,	2015	and	2014,	the	Firm	had recorded	on	its	Consolidated	balance	sheets	$11.1	billion	and	$12.4	billion, respectively,	of	loans	that	either	had	been	repurchased	or	for	which	the	Firm	had an	option	to	repurchase.	Predominantly	all	of	these	amounts	relate	to	loans	that have	been	repurchased	from	Ginnie	Mae	loan	pools.	Additionally,	real	estate owned	resulting	from	voluntary	repurchases	of	loans	was	$343	million	and	$464 million	as	of	December	31,	2015	and	2014,	respectively.	Substantially	all	of these	loans	and	real	estate	owned	are	insured	or	guaranteed	by	U.S.	government agencies.	For	additional	information,	refer	to	Note	14.

# Loan	delinquencies	and	liquidation	losses

The	table	below	includes	information	about	components	of	nonconsolidated	securitized	financial	assets,	in	which	the	Firm	has	continuing	involvement,	and delinquencies	as	of	December	31,	2015	and	2014.

|  | Securitized	assets |  | 90	days	past	due |  | Liquidation	losses |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| As\tof\tor\tfor\tthe\tyear\tended\tDecember\t31,\t(in\tmillions) | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 |
| Securitized\tloans(a) |  |  |  |  |  |  |
| Residential\tmortgage: |  |  |  |  |  |  |
| Prime/\tAlt-A\t&amp;\toption\tARMs | $66,708 | $78,294 | $8,325 | $11,363 | $1,946 | $2,166 |
| Subprime | 22,549 | 25,659 | 5,448 | 6,473 | 1,431 | 1,931 |
| Commercial\tand\tother | 80,319 | 94,438 | 1,808 | 1,522 | 375 | 1,267 |
| Total\tloans\tsecuritized(b) | $169,576 | $198,391 | $15,581 | $19,358 | $3,752 | $5,364 |

(a) Total	assets	held	in	securitization-related	SPEs	were	 $233.6	billion	and	$254.3	billion,	respectively,	at	December	31,	2015	and	2014.	The	$169.6	billion	and	$198.4	billion,	respectively,	of	loans securitized	at	December	31,	2015	and	2014,	excludes:	$62.4	billion	and	$52.2	billion,	respectively,	of	securitized	loans	in	which	the	Firm	has	no	continuing	involvement,	and	 $1.6	billion	and	$3.7 billion,	respectively,	of	loan	securitizations	consolidated	on	the	Firm's	Consolidated	balance	sheets	at	 December	31,	2015	and	2014.

(b) Includes	securitized	loans	that	were	previously	recorded	at	fair	value	and	classified	as	trading	assets.

# Note	17	–	Goodwill	and	other	intangible	assets

# Goodwill

Goodwill	is	recorded	upon	completion	of	a	business	combination	as	the difference	between	the	purchase	price	and	the	fair	value	of	the	net	assets acquired.	Subsequent	to	initial	recognition,	goodwill	is	not	amortized	but	is tested	for	impairment	during	the	fourth	quarter	of	each	fiscal	year,	or	more	often if	events	or	circumstances,	such	as	adverse	changes	in	the	business	climate, indicate	there	may	be	impairment.

The	goodwill	associated	with	each	business	combination	is	allocated	to	the related	reporting	units,	which	are	determined	based	on	how	the	Firm's businesses	are	managed	and	how	they	are	reviewed	by	the	Firm's	Operating Committee.	The	following	table	presents	goodwill	attributed	to	the	business segments.

| December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Consumer\t&amp;\tCommunity\tBanking | $30,769 | $30,941 | $30,985 |
| Corporate\t&amp;\tInvestment\tBank | 6,772 | 6,780 | 6,888 |
| Commercial\tBanking | 2,861 | 2,861 | 2,862 |
| Asset\tManagement | 6,923 | 6,964 | 6,969 |
| Corporate | — | 101 | 377 |
| Total\tgoodwill | $47,325 | $47,647 | $48,081 |

The	following	table	presents	changes	in	the	carrying	amount	of	goodwill.

| (in	millions) | 2015 |  | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tperiod | $47,647 |  | $48,081 | $48,175 |
| Changes\tduring\tthe\tperiod\tfrom: |  |  |  |  |
| Business\tcombinations | 28 |  | 43 | 64 |
| Dispositions | (160) | (b) | (80) | (5) |
| Other(a) | (190) |  | (397) | (153) |
| Balance\tat\tDecember\t31, | $47,325 |  | $47,647 | $48,081 |

(a) Includes	foreign	currency	translation	adjustments,	other	tax-related	adjustments,	and,	during 2014,	goodwill	impairment	associated	with	the	Firm's	Private	Equity	business	of	$276 million.

(b) Includes	$101	million	of	Private	Equity	goodwill,	which	was	disposed	of	as	part	of	the Private	Equity	sale	completed	in	January	2015.

# Impairment	testing

The	Firm's	goodwill	was	not	impaired	at	December	31,	2015.	Further,	except	for the	goodwill	related	to	its	Private	Equity	business,	the	Firm's	goodwill	was	not impaired	at	December	31,	2014.	$276	million	of	goodwill	was	written	off	during 2014	related	to	the	goodwill	impairment	associated	with	the	Firm's	Private Equity	business.	No	goodwill	was	written	off	due	to	impairment	during	2013.

The	goodwill	impairment	test	is	performed	in	two	steps.	In	the	first	step,	the current	fair	value	of	each	reporting	unit	is	compared	with	its	carrying	value, including	goodwill.	If	the	fair	value	is	in	excess	of	the	carrying	value	(including goodwill),	then	the	reporting	unit's	goodwill	is	considered	not	to	be	impaired.	If the	fair	value	is	less	than	the	carrying	value	(including	goodwill),	then	a	second step	is	performed.	In	the	second	step,	the	implied	current	fair	value	of	the

reporting	unit's	goodwill	is	determined	by	comparing	the	fair	value	of	the reporting	unit	(as	determined	in	step	one)	to	the	fair	value	of	the	net	assets	of	the reporting	unit,	as	if	the	reporting	unit	were	being	acquired	in	a	business combination.	The	resulting	implied	current	fair	value	of	goodwill	is	then compared	with	the	carrying	value	of	the	reporting	unit's	goodwill.	If	the	carrying value	of	the	goodwill	exceeds	its	implied	current	fair	value,	then	an	impairment charge	is	recognized	for	the	excess.	If	the	carrying	value	of	goodwill	is	less	than its	implied	current	fair	value,	then	no	goodwill	impairment	is	recognized.

The	Firm	uses	the	reporting	units'	allocated	equity	plus	goodwill	capital	as	a proxy	for	the	carrying	amounts	of	equity	for	the	reporting	units	in	the	goodwill impairment	testing.	Reporting	unit	equity	is	determined	on	a	similar	basis	as	the allocation	of	equity	to	the	Firm's	lines	of	business,	which	takes	into consideration	the	capital	the	business	segment	would	require	if	it	were	operating independently,	incorporating	sufficient	capital	to	address	regulatory	capital requirements	(including	Basel	III),	economic	risk	measures	and	capital	levels	for similarly	rated	peers.	Proposed	line	of	business	equity	levels	are	incorporated into	the	Firm's	annual	budget	process,	which	is	reviewed	by	the	Firm's	Board	of Directors.	Allocated	equity	is	further	reviewed	on	a	periodic	basis	and	updated as	needed.

The	primary	method	the	Firm	uses	to	estimate	the	fair	value	of	its	reporting	units is	the	income	approach.	The	models	project	cash	flows	for	the	forecast	period and	use	the	perpetuity	growth	method	to	calculate	terminal	values.	These	cash flows	and	terminal	values	are	then	discounted	using	an	appropriate	discount	rate. Projections	of	cash	flows	are	based	on	the	reporting	units'	earnings	forecasts, which	include	the	estimated	effects	of	regulatory	and	legislative	changes (including,	but	not	limited	to	the	Dodd-Frank	Wall	Street	Reform	and	Consumer Protection	Act	(the	"Dodd-Frank	Act")),	and	which	are	reviewed	with	the	senior management	of	the	Firm.	The	discount	rate	used	for	each	reporting	unit represents	an	estimate	of	the	cost	of	equity	for	that	reporting	unit	and	is determined	considering	the	Firm's	overall	estimated	cost	of	equity	(estimated using	the	Capital	Asset	Pricing	Model),	as	adjusted	for	the	risk	characteristics specific	to	each	reporting	unit	(for	example,	for	higher	levels	of	risk	or uncertainty	associated	with	the	business	or	management's	forecasts	and assumptions).	To	assess	the	reasonableness	of	the	discount	rates	used	for	each reporting	unit	management	compares	the	discount	rate	to	the	estimated	cost	of equity	for	publicly	traded	institutions	with	similar	businesses	and	risk characteristics.	In	addition,	the	weighted	average	cost	of	equity	(aggregating	the various	reporting	units)	is	compared	with	the	Firms'	overall	estimated	cost	of equity	to	ensure	reasonableness.

The	valuations	derived	from	the	discounted	cash	flow	models	are	then	compared with	market-based	trading	and	transaction	multiples	for	relevant	competitors. Trading	and	transaction	comparables	are	used	as	general	indicators	to

assess	the	general	reasonableness	of	the	estimated	fair	values,	although	precise conclusions	generally	cannot	be	drawn	due	to	the	differences	that	naturally	exist between	the	Firm's	businesses	and	competitor	institutions.	Management	also takes	into	consideration	a	comparison	between	the	aggregate	fair	value	of	the Firm's	reporting	units	and	JPMorgan	Chase's	market	capitalization.	In evaluating	this	comparison,	management	considers	several	factors,	including	(a) a	control	premium	that	would	exist	in	a	market	transaction,	(b)	factors	related	to the	level	of	execution	risk	that	would	exist	at	the	firmwide	level	that	do	not	exist at	the	reporting	unit	level	and	(c)	short-term	market	volatility	and	other	factors that	do	not	directly	affect	the	value	of	individual	reporting	units.

Mortgage	servicing	rights	represent	the	fair	value	of	expected	future	cash	flows for	performing	servicing	activities	for	others.	The	fair	value	considers	estimated future	servicing	fees	and	ancillary	revenue,	offset	by	estimated	costs	to	service the	loans,	and	generally	declines	over	time	as	net	servicing	cash	flows	are received,	effectively	amortizing	the	MSR	asset	against	contractual	servicing	and ancillary	fee	income.	MSRs	are	either	purchased	from	third	parties	or	recognized upon	sale	or	securitization	of	mortgage	loans	if	servicing	is	retained.

As	permitted	by	U.S.	GAAP,	the	Firm	has	elected	to	account	for	its	MSRs	at	fair value.	The	Firm	treats	its	MSRs	as	a	single	class	of	servicing	assets	based	on	the availability	of	market	inputs	used	to	measure	the	fair	value	of	its	MSR	asset	and its	treatment	of	MSRs	as	one	aggregate	pool	for	risk	management	purposes.	The Firm	estimates	the	fair	value	of	MSRs	using	an	option-adjusted	spread	("OAS") model,	which	projects	MSR	cash	flows	over	multiple	interest	rate	scenarios	in conjunction	with	the	Firm's	prepayment	model,	and	then	discounts	these	cash flows	at	risk-adjusted	rates.	The	model	considers	portfolio	characteristics, contractually	specified	servicing	fees,	prepayment	assumptions,	delinquency rates,	costs	to	service,	late	charges	and	other	ancillary	revenue,	and	other economic	factors.	The	Firm	compares	fair	value	estimates	and	assumptions	to observable	market	data	where	available,	and	also	considers	recent	market	activity and	actual	portfolio	experience.

The	fair	value	of	MSRs	is	sensitive	to	changes	in	interest	rates,	including	their effect	on	prepayment	speeds.	MSRs	typically	decrease	in	value	when	interest rates	decline	because	declining	interest	rates	tend	to	increase	prepayments	and therefore	reduce	the	expected	life	of	the	net	servicing	cash	flows	that	consist	of the	MSR	asset.	Conversely,	securities	(e.g.,	mortgage-backed	securities), principal-only	certificates	and	certain	derivatives	(i.e.,

those	for	which	the	Firm	receives	fixed-rate	interest	payments)	increase	in	value when	interest	rates	decline.	JPMorgan	Chase	uses	combinations	of	derivatives and	securities	to	manage	changes	in	the	fair	value	of	MSRs.	The	intent	is	to offset	any	interest-rate	related	changes	in	the	fair	value	of	MSRs	with	changes	in the	fair	value	of	the	related	risk	management	instruments.

The	following	table	summarizes	MSR	activity	for	the	years	ended	December	31,	2015,	2014	and	2013.

| As	of	or	for	the	year	ended	December	31,	(in	millions,	except	where	otherwise	noted) | 2015 | 2014 |  | 2013 |
| :--- | :--- | :--- | :--- | :--- |
| Fair\tvalue\tat\tbeginning\tof\tperiod | $7,436 | $9,614 |  | $7,614 |
| MSR\tactivity: |  |  |  |  |
| Originations\tof\tMSRs | 550 | 757 |  | 2,214 |
| Purchase\tof\tMSRs | 435 | 11 |  | 1 |
| Disposition\tof\tMSRs(a) | (486) | (209) |  | (725) |
| Net\tadditions | 499 | 559 |  | 1,490 |
| Changes\tdue\tto\tcollection/realization\tof\texpected\tcash\tflows | (922) | (911) |  | (1,102) |
| Changes\tin\tvaluation\tdue\tto\tinputs\tand\tassumptions:\n(b)\nChanges\tdue\tto\tmarket\tinterest\trates\tand\tother | (160) | (1,608) |  | 2,122 |
| Changes\tin\tvaluation\tdue\tto\tother\tinputs\tand\tassumptions: |  |  |  |  |
| Projected\tcash\tflows\t(e.g.,\tcost\tto\tservice) | (112) | 133 |  | 109 |
| Discount\trates | (10) | (459) | (e) | (78) |
| Prepayment\tmodel\tchanges\tand\tother(c) | (123) | 108 |  | (541) |
| Total\tchanges\tin\tvaluation\tdue\tto\tother\tinputs\tand\tassumptions | (245) | (218) |  | (510) |
| Total\tchanges\tin\tvaluation\tdue\tto\tinputs\tand\tassumptions | $(405) | $(1,826) |  | $1,612 |
| Fair\tvalue\tat\tDecember\t31, | $6,608 | $7,436 |  | $9,614 |
| Change\tin\tunrealized\tgains/(losses)\tincluded\tin\tincome\trelated\tto\tMSRs\nheld\tat\tDecember\t31, | $(405) | $(1,826) |  | $1,612 |
| Contractual\tservice\tfees,\tlate\tfees\tand\tother\tancillary\tfees\tincluded\tin\tincome | $2,533 | $2,884 |  | $3,309 |
| Third-party\tmortgage\tloans\tserviced\tat\tDecember\t31,\t(in\tbillions) | $677 | $756 |  | $822 |
| Servicer\tadvances,\tnet\tof\tan\tallowance\n\t\tfor\tuncollectible\tamounts,\tat\tDecember\t31,\t(in\tbillions) (d) | $6.5 | $8.5 |  | $9.6 |

(a) For	2014	and	2013,	predominantly	represents	excess	MSRs	transferred	to	agency-sponsored	trusts	in	exchange	for	stripped	mortgage	backed	securities	("SMBS").	In	each	transaction,	a	portion	of	the	SMBS	was acquired	by	third	parties	at	the	transaction	date;	the	Firm	acquired	and	has	retained	the	remaining	balance	of	those	SMBS	as	trading	securities.	Also	includes	sales	of	MSRs.

(b) Represents	both	the	impact	of	changes	in	estimated	future	prepayments	due	to	changes	in	market	interest	rates,	and	the	difference	between	actual	and	expected	prepayments.

(c) Represents	changes	in	prepayments	other	than	those	attributable	to	changes	in	market	interest	rates.

(d) Represents	amounts	the	Firm	pays	as	the	servicer	(e.g.,	scheduled	principal	and	interest,	taxes	and	insurance),	which	will	generally	be	reimbursed	within	a	short	period	of	time	after	the	advance	from	future	cash	flows from	the	trust	or	the	underlying	loans.	The	Firm's	credit	risk	associated	with	these	servicer	advances	is	minimal	because	reimbursement	of	the	advances	is	typically	senior	to	all	cash	payments	to	investors.	In	addition, the	Firm	maintains	the	right	to	stop	payment	to	investors	if	the	collateral	is	insufficient	to	cover	the	advance.	However,	certain	of	these	servicer	advances	may	not	be	recoverable	if	they	were	not	made	in	accordance with	applicable	rules	and	agreements.

(e) For	the	year	ending	December	31,	2014,	the	negative	impact	was	primarily	related	to	higher	capital	allocated	to	the	Mortgage	Servicing	business,	which,	in	turn,	resulted	in	an	increase	in	the	OAS.	The	resulting	OAS assumption	was	consistent	with	capital	and	return	requirements	the	Firm	believed	a	market	participant	would	consider,	taking	into	account	factors	such	as	the	operating	risk	environment	and	regulatory	and	economic capital	requirements.

The	following	table	presents	the	components	of	mortgage	fees	and	related income	(including	the	impact	of	MSR	risk	management	activities)	for	the	years ended	December	31,	2015,	2014	and	2013.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| CCB\tmortgage\tfees\tand\trelated\tincome |  |  |  |
| Net\tproduction\trevenue | $769 | $1,190 | $3,004 |
| Net\tmortgage\tservicing\trevenue: |  |  |  |
| Operating\trevenue: |  |  |  |
| Loan\tservicing\trevenue | 2,776 | 3,303 | 3,552 |
| Changes\tin\tMSR\tasset\tfair\tvalue\tdue\tto |  |  |  |
| collection/realization\tof\texpected\tcash |  |  |  |
| flows | (917) | (905) | (1,094) |
| Total\toperating\trevenue | 1,859 | 2,398 | 2,458 |
| Risk\tmanagement: |  |  |  |
| Changes\tin\tMSR\tasset\tfair\tvalue\n(a)\n\t\tdue\tto\tmarket\tinterest\trates\tand\tother | (160) | (1,606) | 2,119 |
| Other\tchanges\tin\tMSR\tasset\tfair\tvalue |  |  |  |
| due\tto\tother\tinputs\tand\tassumptions\tin |  |  |  |
| model(b) | (245) | (218) | (511) |
| Change\tin\tderivative\tfair\tvalue\tand\tother | 288 | 1,796 | (1,875) |
| Total\trisk\tmanagement | (117) | (28) | (267) |
| Total\tnet\tmortgage\tservicing\trevenue | 1,742 | 2,370 | 2,191 |
| Total\tCCB\tmortgage\tfees\tand\trelated\nincome | 2,511 | 3,560 | 5,195 |
| All\tother | 2 | 3 | 10 |
| Mortgage\tfees\tand\trelated\tincome | $2,513 | $3,563 | $5,205 |

(a) Represents	both	the	impact	of	changes	in	estimated	future	prepayments	due	to	changes	in market	interest	rates,	and	the	difference	between	actual	and	expected	prepayments.

(b) Represents	the	aggregate	impact	of	changes	in	model	inputs	and	assumptions	such	as projected	cash	flows	(e.g.,	cost	to	service),	discount	rates	and	changes	in	prepayments	other than	those	attributable	to	changes	in	market	interest	rates	(e.g.,	changes	in	prepayments	due to	changes	in	home	prices).

The	table	below	outlines	the	key	economic	assumptions	used	to	determine	the fair	value	of	the	Firm's	MSRs	at	December	31,	2015	and	2014,	and	outlines	the sensitivities	of	those	fair	values	to	immediate	adverse	changes	in	those assumptions,	as	defined	below.

| ("CPR") | 9.81% | 9.80% |
| :--- | :--- | :--- |
| Impact\ton\tfair\tvalue\tof\t10%\tadverse\tchange | $(275) | $(337) |
| Impact\ton\tfair\tvalue\tof\t20%\tadverse\tchange | (529) | (652) |
| Weighted-average\toption\tadjusted\tspread | 9.02% | 9.43% |
| Impact\ton\tfair\tvalue\tof\t100\tbasis\tpoints\tadverse\nchange | $(258) | $(300) |
| Impact\ton\tfair\tvalue\tof\t200\tbasis\tpoints\tadverse\nchange | (498) | (578) |

# CPR:	Constant	prepayment	rate.

The	sensitivity	analysis	in	the	preceding	table	is	hypothetical	and	should	be	used with	caution.	Changes	in	fair	value	based	on	variation	in	assumptions	generally cannot	be	easily	extrapolated,	because	the	relationship	of	the	change	in	the assumptions	to	the	change	in	fair	value	are	often	highly	interrelated	and	may	not be	linear.	In	this	table,	the	effect	that	a	change	in	a	particular	assumption	may have	on	the	fair	value	is	calculated	without	changing	any	other	assumption.	In reality,	changes	in	one	factor	may	result	in	changes	in	another,	which	would either	magnify	or	counteract	the	impact	of	the	initial	change.

# Note	18	–	Premises	and	equipment

Premises	and	equipment,	including	leasehold	improvements,	are	carried	at	cost less	accumulated	depreciation	and	amortization.	JPMorgan	Chase	computes depreciation	using	the	straight-line	method	over	the	estimated	useful	life	of	an asset.	For	leasehold	improvements,	the	Firm	uses	the	straight-line	method computed	over	the	lesser	of	the	remaining	term	of	the	leased	facility	or	the estimated	useful	life	of	the	leased	asset.

JPMorgan	Chase	capitalizes	certain	costs	associated	with	the	acquisition	or development	of	internal-use	software.	Once	the	software	is	ready	for	its	intended use,	these	costs	are	amortized	on	a	straight-line	basis	over	the	software's expected	useful	life	and	reviewed	for	impairment	on	an	ongoing	basis.

# Note	19	–	Deposits

At	December	31,	2015	and	2014,	noninterest-bearing	and	interest-bearing deposits	were	as	follows.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| U.S.\toffices |  |  |
| Noninterest-bearing | $392,721 | $437,558 |
| Interest-bearing |  |  |
| Demand(a) | 84,088 | 90,319 |
| Savings(b) | 486,043 | 466,730 |
| Time\t(included\t$10,916\tand\t$7,501\tat\tfair\nvalue)(c) | 92,873 | 86,301 |
| Total\tinterest-bearing\tdeposits | 663,004 | 643,350 |
| Total\tdeposits\tin\tU.S.\toffices | 1,055,725 | 1,080,908 |
| Non-U.S.\toffices |  |  |
| Noninterest-bearing | 18,921 | 19,078 |
| Interest-bearing |  |  |
| Demand | 154,773 | 217,011 |
| Savings | 2,157 | 2,673 |
| Time\t(included\t$1,600\tand\t$1,306\tat\tfair\nvalue)(c) | 48,139 | 43,757 |
| Total\tinterest-bearing\tdeposits | 205,069 | 263,441 |
| Total\tdeposits\tin\tnon-U.S.\toffices | 223,990 | 282,519 |
| Total\tdeposits | $1,279,715 | $1,363,427 |

(a) Includes	Negotiable	Order	of	Withdrawal	("NOW")	accounts,	and	certain	trust	accounts. (b) Includes	Money	Market	Deposit	Accounts	("MMDAs").

(c) Includes	structured	notes	classified	as	deposits	for	which	the	fair	value	option	has	been elected.	For	further	discussion,	see	Note	4.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| U.S.\toffices | $64,519 | $56,983 |
| Non-U.S.\toffices | 48,091 | 43,719 |
| Total | $112,610 | $100,702 |

At	December	31,	2015,	the	maturities	of	interest-bearing	time	deposits	were	as follows.

| (in	millions) | U.S. | Non-U.S. | Total |
| :--- | :--- | :--- | :--- |
| 2016 | 78,246 | 47,791 | 126,037 |
| 2017 | 2,940 | 145 | 3,085 |
| 2018 | 2,172 | 39 | 2,211 |
| 2019 | 1,564 | 47 | 1,611 |
| 2020 | 1,615 | 117 | 1,732 |
| After\t5\tyears | 6,336 | — | 6,336 |
| Total | $92,873 | $48,139 | $141,012 |

# Note	20	–	Accounts	payable	and	other	liabilities

Accounts	payable	and	other	liabilities	consist	of	payables	to	customers;	payables to	brokers,	dealers	and	clearing	organizations;	payables	from	security	purchases that	did	not	settle;	income	taxes	payables;	accrued	expense,	including	interest- bearing	liabilities;	and	all	other	liabilities,	including	litigation	reserves	and obligations	to	return	securities	received	as	collateral.

The	following	table	details	the	components	of	accounts	payable	and	other liabilities.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Brokerage\tpayables(a) | $107,632 | $134,467 |
| Accounts\tpayable\tand\tother\tliabilities | 70,006 | 72,472 |
| Total | $177,638 | $206,939 |

(a) Includes	payables	to	customers,	brokers,	dealers	and	clearing	organizations,	and	payables	from security	purchases	that	did	not	settle.

# Note	21	–	Long-term	debt

JPMorgan	Chase	issues	long-term	debt	denominated	in	various	currencies,	although	predominantly	U.S.	dollars,	with	both	fixed	and	variable	interest	rates.	Included	in senior	and	subordinated	debt	below	are	various	equity-linked	or	other	indexed	instruments,	which	the	Firm	has	elected	to	measure	at	fair	value.	Changes	in	fair	value	are recorded	in	principal	transactions	revenue	in	the	Consolidated	statements	of	income.	The	following	table	is	a	summary	of	long-term	debt	carrying	values	(including unamortized	premiums	and	discounts,	issuance	costs,	valuation	adjustments	and	fair	value	adjustments,	where	applicable)	by	remaining	contractual	maturity	as	of December	31,	2015.

| (in	millions,	except	rates) |  | Under	1	year | 1-5	years | After	5	years | Total |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Parent\tcompany |  |  |  |  |  |  |  |
| Senior\tdebt: | Fixed\trate | $12,014 | $54,200 | $51,544 | $117,758 |  | $108,529 |
|  | Variable\trate | 15,158 | 23,254 | 5,766 | 44,178 |  | 42,201 |
|  | Interest\trates(a) | 0.16-7.00% | 0.24-7.25% | 0.31-6.40% | 0.16-7.25% |  | 0.18-7.25% |
| Subordinated\tdebt: | Fixed\trate | $— | $2,292 | $13,958 | $16,250 |  | $16,645 |
|  | Variable\trate | — | 1,038 | 9 | 1,047 |  | 3,452 |
|  | Interest\trates(a) | —% | 1.06-8.53% | 3.38-8.00% | 1.06-8.53% |  | 0.48-8.53% |
|  | Subtotal | $27,172 | $80,784 | $71,277 | $179,233 |  | $170,827 |
| Subsidiaries |  |  |  |  |  |  |  |
| Federal\tHome\tLoan\tBanks\t("FHLB")\nadvances: | Fixed\trate | $5 | $30 | $156 | $191 |  | $2,204 |
|  | Variable\trate | 9,700 | 56,690 | 5,000 | 71,390 |  | 62,790 |
|  | Interest\trates(a) | 0.37-0.65% | 0.17-0.72% | 0.50-0.70% | 0.17-0.72% |  | 0.11-2.04% |
| Senior\tdebt: | Fixed\trate | $631 | $1,288 | $3,631 | $5,550 |  | $5,751 |
|  | Variable\trate | 10,493 | 7,456 | 2,639 | 20,588 |  | 20,082 |
|  | Interest\trates(a) | 0.47-1.00% | 0.53-4.61% | 1.30-7.28% | 0.47-7.28% |  | 0.26-8.00% |
| Subordinated\tdebt: | Fixed\trate | $1,472 | $3,647 | $1,461 | $6,580 |  | $6,928 |
|  | Variable\trate | 1,150 | — | — | 1,150 |  | 2,362 |
|  | Interest\trates(a) | 0.83-5.88% | 6.00% | 4.38-8.25% | 0.83-8.25% |  | 0.57-8.25% |
|  | Subtotal | $23,451 | $69,111 | $12,887 | $105,449 |  | $100,117 |
| Junior\tsubordinated\tdebt: | Fixed\trate | $— | $— | $717 | $717 |  | $2,185 |
|  | Variable\trate | — | — | 3,252 | 3,252 |  | 3,250 |
|  | Interest\trates(a) | —% | —% | 0.83-8.75% | 0.83-8.75% |  | 0.73-8.75% |
|  | Subtotal | $— | $— | $3,969 | $3,969 |  | $5,435 |
| Total\tlong-term\tdebt(b)(c)(d)\nLong-term\tbeneficial\tinterests: |  | $50,623 | $149,895 | $88,133 | $288,651 | (f)(g) | $276,379 |
|  | Fixed\trate | $1,674 | $10,931 | $1,594 | $14,199 |  | $13,949 |
|  | Variable\trate | 3,393 | 10,642 | 2,323 | 16,358 |  | 21,418 |
|  | Interest\trates | 0.45-5.16% | 0.37-5.23% | 0.00-15.94% | 0.00-15.94% |  | 0.05-15.93% |
| Total\tlong-term\tbeneficial\tinterests(e) |  | $5,067 | $21,573 | $3,917 | $30,557 |  | $35,367 |

(a) The	interest	rates	shown	are	the	range	of	contractual	rates	in	effect	at	year-end,	including	non-U.S.	dollar	fixed-	and	variable-rate	issuances,	which	excludes	the	effects	of	the	associated	derivative	instruments	used	in hedge	accounting	relationships,	if	applicable.	The	use	of	these	derivative	instruments	modifies	the	Firm's	exposure	to	the	contractual	interest	rates	disclosed	in	the	table	above.	Including	the	effects	of	the	hedge accounting	derivatives,	the	range	of	modified	rates	in	effect	at	December	31,	2015,	for	total	long-term	debt	was	 (0.19)%	to	8.88%,	versus	the	contractual	range	of	 0.16%	to	8.75%	presented	in	the	table	above.	The interest	rate	ranges	shown	exclude	structured	notes	accounted	for	at	fair	value.

(b) Included	long-term	debt	of	$76.6	billion	and	$69.2	billion	secured	by	assets	totaling	 $171.6	billion	and	$156.7	billion	at	December	31,	2015	and	2014,	respectively.	The	amount	of	long-term	debt	secured	by	assets does	not	include	amounts	related	to	hybrid	instruments.

(d) Included	$5.5	billion	and	$2.9	billion	of	outstanding	zero-coupon	notes	at	 December	31,	2015	and	2014,	respectively.	The	aggregate	principal	amount	of	these	notes	at	their	respective	maturities	is $16.2	billion	and $7.5	billion,	respectively.	The	aggregate	principal	amount	reflects	the	contractual	principal	payment	at	maturity,	which	may	exceed	the	contractual	principal	payment	at	the	Firm's	next	call	date,	if	applicable.

(e) Included	on	the	Consolidated	balance	sheets	in	beneficial	interests	issued	by	consolidated	VIEs.	Also	included	 $787	million	and	$2.2	billion	accounted	for	at	fair	value	at	 December	31,	2015	and	2014,	respectively. Excluded	short-term	commercial	paper	and	other	short-term	beneficial	interests	of	$11.3	billion	and	$17.0	billion	at	December	31,	2015	and	2014,	respectively.

(f) At	December	31,	2015,	long-term	debt	in	the	aggregate	of	 $39.1	billion	was	redeemable	at	the	option	of	JPMorgan	Chase,	in	whole	or	in	part,	prior	to	maturity,	based	on	the	terms	specified	in	the	respective instruments.

(g) The	aggregate	carrying	values	of	debt	that	matures	in	each	of	the	five	years	subsequent	to	2015	is

The	weighted-average	contractual	interest	rates	for	total	long-term	debt excluding	structured	notes	accounted	for	at	fair	value	were	2.34%	and	2.42%	as of	December	31,	2015	and	2014,	respectively.	In	order	to	modify	exposure	to interest	rate	and	currency	exchange	rate	movements,	JPMorgan	Chase	utilizes derivative	instruments,	primarily	interest	rate	and	cross-currency	interest	rate swaps,	in	conjunction	with	some	of	its	debt	issues.	The	use	of	these	instruments modifies	the	Firm's	interest	expense	on	the	associated	debt.	The	modified weighted-average	interest	rates	for	total	long-term	debt,	including	the	effects	of related	derivative	instruments,	were	1.64%	and	1.50%	as	of	December	31,	2015 and	2014,	respectively.

JPMorgan	Chase	&	Co.	has	guaranteed	certain	long-term	debt	of	its	subsidiaries, including	both	long-term	debt	and	structured	notes.	These	guarantees	rank	on parity	with	the	Firm's	other	unsecured	and	unsubordinated	indebtedness.	The amount	of	such	guaranteed	long-term	debt	was	$152	million	and	$352	million	at December	31,	2015	and	2014,	respectively.

The	Firm's	unsecured	debt	does	not	contain	requirements	that	would	call	for	an acceleration	of	payments,	maturities	or	changes	in	the	structure	of	the	existing debt,	provide	any	limitations	on	future	borrowings	or	require	additional collateral,	based	on	unfavorable	changes	in	the	Firm's	credit	ratings,	financial ratios,	earnings	or	stock	price.

# Junior	subordinated	deferrable	interest	debentures	held	by	trusts	that issued	guaranteed	capital	debt	securities

At	December	31,	2015,	the	Firm	had	outstanding	eight	wholly	owned	Delaware statutory	business	trusts	("issuer	trusts")	that	had	issued	trust	preferred	securities.

The	junior	subordinated	deferrable	interest	debentures	issued	by	the	Firm	to	the issuer	trusts,	totaling	$4.0	billion	and	$5.4	billion	at	December	31,	2015	and 2014,	respectively,	were	reflected	on	the	Firm's	Consolidated	balance	sheets	in long-term	debt,	and	in	the	table	on	the	preceding	page	under	the	caption	"Junior subordinated	debt."	The	Firm	also	records	the	common	capital	securities	issued by	the	issuer	trusts	in	other	assets	in	its	Consolidated	balance	sheets	at December	31,	2015	and	2014.	Beginning	in	2014,	the	debentures	issued	to	the issuer	trusts	by	the	Firm,	less	the	common	capital	securities	of	the	issuer	trusts, began	being	phased	out	from	inclusion	as	Tier	1	capital	under	Basel	III.	As	of December	31,	2015	and	2014,	$992	million	and	$2.7	billion	of	these	debentures qualified	as	Tier	1	capital,	while	$3.0	billion	and	$2.7	billion	qualified	as	Tier	2 capital.

The	following	is	a	summary	of	the	outstanding	trust	preferred	securities,	including	unamortized	original	issue	discount,	issued	by	each	trust,	and	the	junior	subordinated deferrable	interest	debenture	issued	to	each	trust,	as	of	December	31,	2015.

| December	31,	2015<br>(in	millions) | Amount	of	trust<br>preferred	securities<br>issued	by	trust(a) | Principal	amount	of<br>debenture	issued	to<br>trust(b) | Issue	date | Stated	maturity	of<br>trust	preferred<br>securities	and<br>debentures | Earliest<br>redemption	date | Interest	rate	of	trust<br>preferred	securities	and<br>debentures | Interest<br>payment/distribution<br>dates |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| BANK\tONE\tCapital\tIII | $474 | $717 | 2000 | 2030 | Any\ttime | 8.75% | Semiannually |
| Chase\tCapital\tII | 483 | 496 | 1997 | 2027 | Any\ttime | LIBOR\t+\t0.50% | Quarterly |
| Chase\tCapital\tIII | 296 | 304 | 1997 | 2027 | Any\ttime | LIBOR\t+\t0.55% | Quarterly |
| Chase\tCapital\tVI | 242 | 248 | 1998 | 2028 | Any\ttime | LIBOR\t+\t0.625% | Quarterly |
| First\tChicago\tNBD\tCapital\tI | 249 | 256 | 1997 | 2027 | Any\ttime | LIBOR\t+\t0.55% | Quarterly |
| J.P.\tMorgan\tChase\tCapital\tXIII | 466 | 477 | 2004 | 2034 | Any\ttime | LIBOR\t+\t0.95% | Quarterly |
| JPMorgan\tChase\tCapital\tXXI | 836 | 832 | 2007 | 2037 | Any\ttime | LIBOR\t+\t0.95% | Quarterly |
| JPMorgan\tChase\tCapital\tXXIII | 644 | 639 | 2007 | 2047 | Any\ttime | LIBOR\t+\t1.00% | Quarterly |
| Total | $3,690 | $3,969 |  |  |  |  |  |

(a) Represents	the	amount	of	trust	preferred	securities	issued	to	the	public	by	each	trust,	including	unamortized	original-issue	discount.

(b) Represents	the	principal	amount	of	JPMorgan	Chase	debentures	issued	to	each	trust,	including	unamortized	original-issue	discount.	The	principal	amount	of	debentures	issued	to	the	trusts includes	the	impact	of	hedging	and	purchase	accounting	fair	value	adjustments	that	were	recorded	on	the	Firm's	Consolidated	Financial	Statements.

On	April	2,	2015,	the	Firm	redeemed	$1.5	billion,	or	100%	of	the	liquidation amount,	of	the	guaranteed	capital	debt	securities	("trust	preferred	securities")	of JPMorgan	Chase	Capital	XXIX	trust	preferred	securities.	On	May	8,	2013,	the Firm	redeemed	approximately	$5.0	billion,	or	100%	of	the	liquidation	amount,	of the	following	eight	series	of	trust	preferred	securities:	JPMorgan	Chase	Capital X,	XI,	XII,	XIV,	XVI,	XIX	and	XXIV,	and	BANK	ONE	Capital	VI.	Other income	for	the	year	ended	December	31,	2013,	reflected	a	modest	loss	related	to the	redemption	of	trust	preferred	securities.

# Note	22	–	Preferred	stock

At	December	31,	2015	and	2014,	JPMorgan	Chase	was	authorized	to	issue	200 million	shares	of	preferred	stock,	in	one	or	more	series,	with	a	par	value	of	$1 per	share.

In	the	event	of	a	liquidation	or	dissolution	of	the	Firm,	JPMorgan	Chase's preferred	stock	then	outstanding	takes	precedence	over	the	Firm's	common stock	for	the	payment	of	dividends	and	the	distribution	of	assets.

The	following	is	a	summary	of	JPMorgan	Chase's	non-cumulative	preferred	stock	outstanding	as	of	December	31,	2015	and	2014.

(a) Represented	by	depositary	shares.

Each	series	of	preferred	stock	has	a	liquidation	value	and	redemption	price	per share	of	$10,000,	plus	any	accrued	but	unpaid	dividends.

Dividends	on	fixed-rate	preferred	stock	are	payable	quarterly.	Dividends	on fixed-to-floating-rate	preferred	stock	are	payable	semiannually	while	at	a	fixed rate,	and	will	become	payable	quarterly	after	converting	to	a	floating	rate.

On	September	1,	2013,	the	Firm	redeemed	all	of	the	outstanding	shares	of	its 8.625%	Non-Cumulative	Preferred	Stock,	Series	J	at	their	stated	redemption value.

# Redemption	rights

Each	series	of	the	Firm's	preferred	stock	may	be	redeemed	on	any	dividend payment	date	on	or	after	the	earliest	redemption	date	for	that	series.	All outstanding	preferred	stock	series	except	Series	I	may	also	be	redeemed following	a	"capital	treatment	event",	as	described	in	the	terms	of	each	series. Any	redemption	of	the	Firm's	preferred	stock	is	subject	to	non-objection	from the	Board	of	Governors	of	the	Federal	Reserve	System	(the	"Federal	Reserve").

# Note	23	–	Common	stock

At	December	31,	2015	and	2014,	JPMorgan	Chase	was	authorized	to	issue	9.0 billion	shares	of	common	stock	with	a	par	value	of	$1	per	share.

Common	shares	issued	(newly	issued	or	distributed	from	treasury)	by	JPMorgan Chase	during	the	years	ended	December	31,	2015,	2014	and	2013	were	as follows.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Total\tissued\t–\tbalance\tat\tJanuary\t1\tand\nDecember\t31 | 4,104.9 | 4,104.9 | 4,104.9 |
| Treasury\t–\tbalance\tat\tJanuary\t1 | (390.1) | (348.8) | (300.9) |
| Purchase\tof\ttreasury\tstock | (89.8) | (82.3) | (96.1) |
| Issued\tfrom\ttreasury: |  |  |  |
| Employee\tbenefits\tand\tcompensation\nplans | 32.8 | 39.8 | 47.1 |
| Issuance\tof\tshares\tfor\twarrant\texercise | 4.7 | — | — |
| Employee\tstock\tpurchase\tplans | 1.0 | 1.2 | 1.1 |
| Total\tissued\tfrom\ttreasury | 38.5 | 41.0 | 48.2 |
| Total\ttreasury\t–\tbalance\tat\tDecember\t31 | (441.4) | (390.1) | (348.8) |
| Outstanding\tat\tDecember\t31 | 3,663.5 | 3,714.8 | 3,756.1 |

At	December	31,	2015,	2014,	and	2013,	respectively,	the	Firm	had	47.4	million, 59.8	million	and	59.8	million	warrants	outstanding	to	purchase	shares	of common	stock	(the	"Warrants").	The	Warrants	are	currently	traded	on	the	New York	Stock	Exchange,	and	they	are	exercisable,	in	whole	or	in	part,	at	any	time and	from	time	to	time	until	October	28,	2018.	The	original	warrant	exercise	price was	$42.42	per	share.	The	number	of	shares	issuable	upon	the	exercise	of	each warrant	and	the	warrant	exercise	price	is	subject	to	adjustment	upon	the occurrence	of	certain	events,	including,	but	not	limited	to,	the	extent	to	which regular	quarterly	cash	dividends	exceed	$0.38	per	share.	As	a	result	of	the	Firm's quarterly	common	stock	dividend	exceeding	$0.38	per	share	commencing	with the	second	quarter	of	2014,	the	exercise	price	of	the	Warrants	has	been	adjusted each	subsequent	quarter,	and	was	$42.284	as	of	December	31,	2015.	There	has been	no	change	in	the	number	of	shares	issuable	upon	exercise.

On	March	11,	2015,	in	conjunction	with	the	Federal	Reserve's	release	of	its	2015 Comprehensive	Capital	Analysis	and	Review	("CCAR")	results,	the	Firm's Board	of	Directors	has	authorized	a	$6.4	billion	common	equity	(i.e.,	common stock	and	warrants)	repurchase	program.	As	of	December	31,	2015,	$2.7	billion (on	a	settlement-date	basis)	of	authorized	repurchase	capacity	remained	under the	program.	This	authorization	includes	shares	repurchased	to	offset	issuances under	the	Firm's	equity-based	compensation	plans.

The	Firm	may,	from	time	to	time,	enter	into	written	trading	plans	under	Rule 10b5-1	of	the	Securities	Exchange	Act	of	1934	to	facilitate	repurchases	in accordance	with	the	common	equity	repurchase	program.	A	Rule	10b5-1 repurchase	plan	allows	the	Firm	to	repurchase	its	equity	during	periods	when	it would	not	otherwise	be	repurchasing	common	equity	—	for	example,	during internal	trading	"blackout	periods."	All	purchases	under	a	Rule	10b5-1	plan must	be	made	according	to	a	predefined	plan	established	when	the	Firm	is	not aware	of	material	nonpublic	information.	For	additional	information	regarding repurchases	of	the	Firm's	equity	securities,	see	Part	II,

Item	5:	Market	for	registrant's	common	equity,	related	stockholder	matters	and issuer	purchases	of	equity	securities,	on	page	20.

As	of	December	31,	2015,	approximately	195	million	unissued	shares	of common	stock	were	reserved	for	issuance	under	various	employee	incentive, compensation,	option	and	stock	purchase	plans,	director	compensation	plans,	and the	Warrants,	as	discussed	above.

# Note	24	–	Earnings	per	share

Earnings	per	share	("EPS")	is	calculated	under	the	two-class	method	under which	all	earnings	(distributed	and	undistributed)	are	allocated	to	each	class	of common	stock	and	participating	securities	based	on	their	respective	rights	to receive	dividends.	JPMorgan	Chase	grants	restricted	stock	and	RSUs	to	certain employees	under	its	stock-based	compensation	programs,	which	entitle recipients	to	receive	nonforfeitable	dividends	during	the	vesting	period	on	a	basis equivalent	to	the	dividends	paid	to	holders	of	common	stock;	these	unvested awards	meet	the	definition	of	participating	securities.	Options	issued	under employee	benefit	plans	that	have	an	antidilutive	effect	are	excluded	from	the computation	of	diluted	EPS.

The	following	table	presents	the	calculation	of	basic	and	diluted	EPS	for	the years	ended	December	31,	2015,	2014	and	2013.

| except	per	share	amounts) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Basic\tearnings\tper\tshare |  |  |  |
| Net\tincome | $24,442 | $21,745 | $17,886 |
| Less:\tPreferred\tstock\tdividends | 1,515 | 1,125 | 805 |
| Net\tincome\tapplicable\tto\tcommon\tequity | 22,927 | 20,620 | 17,081 |
| Less:\tDividends\tand\tundistributed\tearnings\nallocated\tto\tparticipating\tsecurities | 521 | 543 | 524 |
| Net\tincome\tapplicable\tto\tcommon\nstockholders | $22,406 | $20,077 | $16,557 |
| Total\tweighted-average\tbasic\tshares\noutstanding | 3,700.4 | 3,763.5 | 3,782.4 |
| Net\tincome\tper\tshare | $6.05 | $5.33 | $4.38 |
| Diluted\tearnings\tper\tshare\nNet\tincome\tapplicable\tto\tcommon\nstockholders | $22,406 | $20,077 | $16,557 |
| Total\tweighted-average\tbasic\tshares\noutstanding | 3,700.4 | 3,763.5 | 3,782.4 |
| Add:\tEmployee\tstock\toptions,\tSARs\tand\nwarrants(a) | 32.4 | 34.0 | 32.5 |
| Total\tweighted-average\tdiluted\tshares\noutstanding(b) | 3,732.8 | 3,797.5 | 3,814.9 |
| Net\tincome\tper\tshare | $6.00 | $5.29 | $4.34 |

(a) Excluded	from	the	computation	of	diluted	EPS	(due	to	the	antidilutive	effect)	were	certain	options	issued	under employee	benefit	plans.	The	aggregate	number	of	shares	issuable	upon	the	exercise	of	such	options	was	not material	for	the	year	ended	December	31,	2015,	and	1	million	and	6	million	for	the	years	ended	December	31, 2014	and	2013,	respectively.

(b) Participating	securities	were	included	in	the	calculation	of	diluted	EPS	using	the	two-class	method,	as	this computation	was	more	dilutive	than	the	calculation	using	the	treasury	stock	method.

# Note	25	–	Accumulated	other	comprehensive	income/(loss)

AOCI	includes	the	after-tax	change	in	unrealized	gains	and	losses	on	investment	securities,	foreign	currency	translation	adjustments	(including	the	impact	of	related derivatives),	cash	flow	hedging	activities,	and	net	loss	and	prior	service	costs/(credit)	related	to	the	Firm's	defined	benefit	pension	and	OPEB	plans.

| Year	ended	December	31,<br>(in	millions) | Unrealized	gains/(losses)<br>on	investment	securities(a) | Translation<br>adjustments,	net	of<br>hedges | Cash	flow	hedges | Defined	benefit	pension	and<br>OPEB	plans | Accumulated	other<br>comprehensive<br>income/(loss) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2012 | $6,868 | $(95) | $120 | $(2,791) | $4,102 |
| Net\tchange | (4,070) | (41) | (259) | 1,467 | (2,903) |
| Balance\tat\tDecember\t31,\t2013 | $2,798 | $(136) | $(139) | $(1,324) | $1,199 |
| Net\tchange | 1,975 | (11) | 44 | (1,018) | 990 |
| Balance\tat\tDecember\t31,\t2014 | $4,773 | $(147) | $(95) | $(2,342) | $2,189 |
| Net\tchange | (2,144) | (15) | 51 | 111 | (1,997) |
| Balance\tat\tDecember\t31,\t2015 | $2,629 | $(162) | $(44) | $(2,231) | $192 |

(a) Represents	the	after-tax	difference	between	the	fair	value	and	amortized	cost	of	securities	accounted	for	as	AFS	including,	as	of	the	date	of	transfer	during	2014,	 $9	million	of	net	unrealized	losses related	to	AFS	securities	that	were	transferred	to	HTM.	Subsequent	to	transfer,	includes	any	net	unamortized	unrealized	gains	and	losses	related	to	the	transferred	securities.

The	following	table	presents	the	before-	and	after-tax	changes	in	the	components	of	other	comprehensive	income/(loss).

|  |  | 2015 |  |  | 2014 |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t(in\tmillions) | Pretax | Tax\teffect | After-tax | Pretax | Tax\teffect | After-tax | Pretax | Tax\teffect | After-tax |
| Unrealized\tgains/(losses)\ton\tinvestment\tsecurities: |  |  |  |  |  |  |  |  |  |
| Net\tunrealized\tgains/(losses)\tarising\tduring\tthe\tperiod | $(3,315) | $1,297 | $(2,018) | $3,193 | $(1,170) | $2,023 | $(5,987) | $2,323 | $(3,664) |
| Reclassification\tadjustment\tfor\trealized\t(gains)/losses\tincluded\nin\tnet\tincome(a) | (202) | 76 | (126) | (77) | 29 | (48) | (667) | 261 | (406) |
| Net\tchange | (3,517) | 1,373 | (2,144) | 3,116 | (1,141) | 1,975 | (6,654) | 2,584 | (4,070) |
| Translation\tadjustments: |  |  |  |  |  |  |  |  |  |
| Translation(b) | (1,876) | 682 | (1,194) | (1,638) | 588 | (1,050) | (807) | 295 | (512) |
| Hedges(b) | 1,885 | (706) | 1,179 | 1,698 | (659) | 1,039 | 773 | (302) | 471 |
| Net\tchange | 9 | (24) | (15) | 60 | (71) | (11) | (34) | (7) | (41) |
| Cash\tflow\thedges: |  |  |  |  |  |  |  |  |  |
| Net\tunrealized\tgains/(losses)\tarising\tduring\tthe\tperiod | (97) | 35 | (62) | 98 | (39) | 59 | (525) | 206 | (319) |
| Reclassification\tadjustment\tfor\trealized\t(gains)/losses\tincluded\nin\tnet\tincome(c)(e) | 180 | (67) | 113 | (24) | 9 | (15) | 101 | (41) | 60 |
| Net\tchange | 83 | (32) | 51 | 74 | (30) | 44 | (424) | 165 | (259) |
| Defined\tbenefit\tpension\tand\tOPEB\tplans: |  |  |  |  |  |  |  |  |  |
| Prior\tservice\tcredits\tarising\tduring\tthe\tperiod | — | — | — | (53) | 21 | (32) | — | — | — |
| Net\tgains/(losses)\tarising\tduring\tthe\tperiod | 29 | (47) | (18) | (1,697) | 688 | (1,009) | 2,055 | (750) | 1,305 |
| Reclassification\tadjustments\tincluded\tin\nnet\tincome(d): |  |  |  |  |  |  |  |  |  |
| Amortization\tof\tnet\tloss | 282 | (106) | 176 | 72 | (29) | 43 | 321 | (124) | 197 |
| Prior\tservice\tcosts/(credits) | (36) | 14 | (22) | (44) | 17 | (27) | (43) | 17 | (26) |
| Foreign\texchange\tand\tother | 33 | (58) | (25) | 39 | (32) | 7 | (14) | 5 | (9) |
| Net\tchange | 308 | (197) | 111 | (1,683) | 665 | (1,018) | 2,319 | (852) | 1,467 |
| Total\tother\tcomprehensive\tincome/(loss) | $(3,117) | $1,120 | $(1,997) | $1,567 | $(577) | $990 | $(4,793) | $1,890 | $(2,903) |

(a) The	pretax	amount	is	reported	in	securities	gains	in	the	Consolidated	statements	of	income.

(b) Reclassifications	of	pretax	realized	gains/(losses)	on	translation	adjustments	and	related	hedges	are	reported	in	other	income/expense	in	the	Consolidated	statements	of	income.	The	amounts	were not	material	for	the	periods	presented.

(c) The	pretax	amounts	are	predominantly	recorded	in	net	interest	income	in	the	Consolidated	statements	of	income.

(d) The	pretax	amount	is	reported	in	compensation	expense	in	the	Consolidated	statements	of	income.

(e) In	2015,	the	Firm	reclassified	approximately	$150	million	of	net	losses	from	AOCI	to	other	income	because	the	Firm	determined	that	it	is	probable	that	the	forecasted	interest	payment	cash	flows will	not	occur.	For	additional	information,	see	Note	6.

# Note	26	–	Income	taxes

JPMorgan	Chase	and	its	eligible	subsidiaries	file	a	consolidated	U.S.	federal income	tax	return.	JPMorgan	Chase	uses	the	asset	and	liability	method	to provide	income	taxes	on	all	transactions	recorded	in	the	Consolidated	Financial Statements.	This	method	requires	that	income	taxes	reflect	the	expected	future tax	consequences	of	temporary	differences	between	the	carrying	amounts	of assets	or	liabilities	for	book	and	tax	purposes.	Accordingly,	a	deferred	tax	asset or	liability	for	each	temporary	difference	is	determined	based	on	the	tax	rates that	the	Firm	expects	to	be	in	effect	when	the	underlying	items	of	income	and expense	are	realized.	JPMorgan	Chase's	expense	for	income	taxes	includes	the current	and	deferred	portions	of	that	expense.	A	valuation	allowance	is established	to	reduce	deferred	tax	assets	to	the	amount	the	Firm	expects	to realize.

Due	to	the	inherent	complexities	arising	from	the	nature	of	the	Firm's businesses,	and	from	conducting	business	and	being	taxed	in	a	substantial number	of	jurisdictions,	significant	judgments	and	estimates	are	required	to	be made.	Agreement	of	tax	liabilities	between	JPMorgan	Chase	and	the	many	tax jurisdictions	in	which	the	Firm	files	tax	returns	may	not	be	finalized	for	several years.	Thus,	the	Firm's	final	tax-related	assets	and	liabilities	may	ultimately	be different	from	those	currently	reported.

# Effective	tax	rate	and	expense

A	reconciliation	of	the	applicable	statutory	U.S.	income	tax	rate	to	the	effective tax	rate	for	each	of	the	years	ended	December	31,	2015,	2014	and	2013,	is presented	in	the	following	table.

# Effective	tax	rate

| Year	ended	December	31, | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Statutory\tU.S.\tfederal\ttax\trate | 35.0\t% | 35.0\t% | 35.0\t% |
| Increase/(decrease)\tin\ttax\trate\tresulting\nfrom: |  |  |  |
| U.S.\tstate\tand\tlocal\tincome\ttaxes,\tnet\nof\tU.S.\tfederal\tincome\ttax\tbenefit | 1.5 | 2.7 | 2.2 |
| Tax-exempt\tincome | (3.3) | (3.1) | (3.0) |
| Non-U.S.\tsubsidiary\tearnings(a) | (3.9) | (2.0) | (4.8) |
| Business\ttax\tcredits | (3.7) | (3.3) | (3.4) |
| Nondeductible\tlegal\texpense | 0.8 | 2.3 | 7.8 |
| Tax\taudit\tresolutions | (5.7) | (1.4) | (0.6) |
| Other,\tnet | (0.3) | (1.0) | (0.3) |
| Effective\ttax\trate | 20.4\t% | 29.2\t% | 32.9\t% |

(a) Predominantly	includes	earnings	of	U.K.	subsidiaries	that	are	deemed	to	be	reinvested indefinitely.

The	components	of	income	tax	expense/(benefit)	included	in	the	Consolidated statements	of	income	were	as	follows	for	each	of	the	years	ended	December	31, 2015,	2014,	and	2013.

# Income	tax	expense/(benefit)

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Current\tincome\ttax\texpense/(benefit) |  |  |  |
| U.S.\tfederal | $3,160 | $2,382 | $(654) |
| Non-U.S. | 1,220 | 1,353 | 1,308 |
| U.S.\tstate\tand\tlocal | 547 | 857 | (4) |
| Total\tcurrent\tincome\ttax\texpense/(benefit) | 4,927 | 4,592 | 650 |
| Deferred\tincome\ttax\texpense/(benefit) |  |  |  |
| U.S.\tfederal | 1,213 | 3,890 | 7,216 |
| Non-U.S. | (95) | 71 | 10 |
| U.S.\tstate\tand\tlocal | 215 | 401 | 913 |
| Total\tdeferred\tincome\ttax\n\t\t\t\t\texpense/(benefit) | 1,333 | 4,362 | 8,139 |
| Total\tincome\ttax\texpense | $6,260 | $8,954 | $8,789 |

Total	income	tax	expense	includes	$2.4	billion,	$451	million	and	$531	million	of tax	benefits	recorded	in	2015,	2014,	and	2013,	respectively,	as	a	result	of	tax audit	resolutions.	In	2013,	the	relationship	between	current	and	deferred	income tax	expense	was	largely	driven	by	the	reversal	of	significant	deferred	tax	assets as	well	as	prior-year	tax	adjustments	and	audit	resolutions.

# Tax	effect	of	items	recorded	in	stockholders'	equity

The	preceding	table	does	not	reflect	the	tax	effect	of	certain	items	that	are recorded	each	period	directly	in	stockholders'	equity	and	certain	tax	benefits associated	with	the	Firm's	employee	stock-based	compensation	plans.	The	tax effect	of	all	items	recorded	directly	to	stockholders'	equity	resulted	in	a	increase of	$1.5	billion	in	2015,	a	decrease	of	$140	million	in	2014,	and	an	increase	of $2.1	billion	in	2013.

# Results	from	Non-U.S.	earnings

The	following	table	presents	the	U.S.	and	non-U.S.	components	of	income before	income	tax	expense	for	the	years	ended	December	31,	2015,	2014	and 2013.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| U.S. | $23,191 | $23,422 | $17,990 |
| Non-U.S.(a) | 7,511 | 7,277 | 8,685 |
| Income\tbefore\tincome\ttax\texpense | $30,702 | $30,699 | $26,675 |

(a) For	purposes	of	this	table,	non-U.S.	income	is	defined	as	income	generated	from	operations located	outside	the	U.S.

U.S.	federal	income	taxes	have	not	been	provided	on	the	undistributed	earnings of	certain	non-U.S.	subsidiaries,	to	the	extent	that	such	earnings	have	been reinvested	abroad	for	an	indefinite	period	of	time.	Based	on	JPMorgan	Chase's ongoing	review	of	the	business	requirements	and	capital	needs	of	its	non-U.S. subsidiaries,	combined	with	the	formation	of	specific	strategies	and	steps	taken to	fulfill

these	requirements	and	needs,	the	Firm	has	determined	that	the	undistributed earnings	of	certain	of	its	subsidiaries	would	be	indefinitely	reinvested	to	fund current	and	future	growth	of	the	related	businesses.	As	management	does	not intend	to	use	the	earnings	of	these	subsidiaries	as	a	source	of	funding	for	its	U.S. operations,	such	earnings	will	not	be	distributed	to	the	U.S.	in	the	foreseeable future.	For	2015,	pretax	earnings	of	$3.5	billion	were	generated	and	will	be indefinitely	reinvested	in	these	subsidiaries.	At	December	31,	2015,	the cumulative	amount	of	undistributed	pretax	earnings	in	these	subsidiaries	were $34.6	billion.	If	the	Firm	were	to	record	a	deferred	tax	liability	associated	with these	undistributed	earnings,	the	amount	would	be	$8.2	billion	at	December	31, 2015.

These	undistributed	earnings	are	related	to	subsidiaries	located	predominantly	in the	U.K.	where	the	2015	statutory	tax	rate	was	20.25%.

# Affordable	housing	tax	credits

The	Firm	recognized	$1.6	billion,	$1.6	billion	and	$1.5	billion	of	tax	credits	and other	tax	benefits	associated	with	investments	in	affordable	housing	projects within	income	tax	expense	for	the	years	2015,	2014	and	2013,	respectively.	The amount	of	amortization	of	such	investments	reported	in	income	tax	expense under	the	current	period	presentation	during	these	years	was	$1.1	billion,	$1.1 billion	and	$989	million,	respectively.	The	carrying	value	of	these	investments, which	are	reported	in	other	assets	on	the	Firm's	Consolidated	balance	sheets, was	$7.7	billion	and	$7.3	billion	at	December	31,	2015	and	2014,	respectively. The	amount	of	commitments	related	to	these	investments,	which	are	reported	in accounts	payable	and	other	liabilities	on	the	Firm's	Consolidated	balance	sheets, was	$2.0	billion	and	$1.8	billion	at	December	31,	2015	and	2014,	respectively.

# Deferred	taxes

Deferred	income	tax	expense/(benefit)	results	from	differences	between	assets and	liabilities	measured	for	financial	reporting	purposes	versus	income	tax	return purposes.	Deferred	tax	assets	are	recognized	if,	in	management's	judgment,	their realizability	is	determined	to	be	more	likely	than	not.	If	a	deferred	tax	asset	is determined	to	be	unrealizable,	a	valuation	allowance	is	established.	The significant	components	of	deferred	tax	assets	and	liabilities	are	reflected	in	the following	table	as	of	December	31,	2015	and	2014.

| December	31,	(in	millions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets |  |  |
| Allowance\tfor\tloan\tlosses | $5,343 | $5,756 |
| Employee\tbenefits | 2,972 | 3,378 |
| Accrued\texpenses\tand\tother | 7,299 | 8,637 |
| Non-U.S.\toperations | 5,365 | 5,106 |
| Tax\tattribute\tcarryforwards | 2,602 | 570 |
| Gross\tdeferred\ttax\tassets | 23,581 | 23,447 |
| Valuation\tallowance | (735) | (820) |
| Deferred\ttax\tassets,\tnet\tof\tvaluation\nallowance | $22,846 | $22,627 |
| Deferred\ttax\tliabilities |  |  |
| Depreciation\tand\tamortization | $3,167 | $3,073 |
| Mortgage\tservicing\trights,\tnet\tof\thedges | 4,968 | 5,533 |
| Leasing\ttransactions | 3,042 | 2,495 |
| Non-U.S.\toperations | 4,285 | 4,444 |
| Other,\tnet | 4,419 | 5,392 |
| Gross\tdeferred\ttax\tliabilities | 19,881 | 20,937 |
| Net\tdeferred\ttax\tassets | $2,965 | $1,690 |

JPMorgan	Chase	has	recorded	deferred	tax	assets	of	$2.6	billion	at December	31,	2015,	in	connection	with	U.S.	federal,	state	and	local,	and	non- U.S.	net	operating	loss	("NOL")	carryforwards	and	foreign	tax	credit carryforwards.	At	December	31,	2015,	total	U.S.	federal	NOL	carryforwards were	approximately	$5.2	billion,	state	and	local	NOL	carryforwards	were	$509 million,	and	non-U.S.	NOL	carryforwards	were	$288	million.	If	not	utilized,	the U.S.	federal	NOLs	will	expire	between	2025	and	2034	and	the	state	and	local and	non-U.S.	NOL	carryforwards	will	expire	between	2016	and	2017.	Non-U.S. tax	credit	carryforwards	were	$704	million	and	will	expire	by	2023.

The	valuation	allowance	at	December	31,	2015,	was	due	to	losses	associated with	non-U.S.	subsidiaries.

# Unrecognized	tax	benefits

At	December	31,	2015,	2014	and	2013,	JPMorgan	Chase's	unrecognized	tax benefits,	excluding	related	interest	expense	and	penalties,	were	$3.5	billion,	$4.9 billion	and	$5.5	billion,	respectively,	of	which	$2.1	billion,	$3.5	billion	and	$3.7 billion,	respectively,	if	recognized,	would	reduce	the	annual	effective	tax	rate. Included	in	the	amount	of	unrecognized	tax	benefits	are	certain	items	that	would not	affect	the	effective	tax	rate	if	they	were	recognized	in	the	Consolidated statements	of	income.	These	unrecognized	items	include	the	tax	effect	of	certain temporary	differences,	the	portion	of	gross	state	and	local	unrecognized	tax benefits	that	would	be	offset	by	the	benefit	from	associated	U.S.	federal	income tax	deductions,	and	the	portion	of	gross	non-U.S.	unrecognized	tax	benefits	that would	have	offsets	in	other	jurisdictions.	JPMorgan	Chase	is	presently	under audit	by	a	number	of	taxing	authorities,	most	notably	by	the	Internal	Revenue Service	as	summarized	in	the	Tax	examination	status	table	below.	As	JPMorgan Chase	is	presently	under	audit	by	a	number	of	taxing	authorities,	it	is	reasonably possible	that	over	the	next	12	months	the	resolution	of	these	examinations	may increase	or	decrease	the	gross	balance	of	unrecognized	tax	benefits	by	as	much as	approximately	$800	million.	Upon	settlement	of	an	audit,	the	change	in	the unrecognized	tax	benefit	balance	would	result	from	payment	or	income statement	recognition.

The	following	table	presents	a	reconciliation	of	the	beginning	and	ending amount	of	unrecognized	tax	benefits	for	the	years	ended	December	31,	2015, 2014	and	2013.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tJanuary\t1, | $4,911 | $5,535 | $7,158 |
| Increases\tbased\ton\ttax\tpositions\trelated\tto\tthe\ncurrent\tperiod | 408 | 810 | 542 |
| Increases\tbased\ton\ttax\tpositions\trelated\tto\nprior\tperiods | 1,028 | 477 | 88 |
| Decreases\tbased\ton\ttax\tpositions\trelated\tto\nprior\tperiods | (2,646) | (1,902) | (2,200) |
| Decreases\trelated\tto\tcash\tsettlements\twith\ntaxing\tauthorities | (204) | (9) | (53) |
| Balance\tat\tDecember\t31, | $3,497 | $4,911 | $5,535 |

After-tax	interest	expense/(benefit)	and	penalties	related	to	income	tax	liabilities recognized	in	income	tax	expense	were	$(156)	million,	$17	million	and	$(184) million	in	2015,	2014	and	2013,	respectively.

At	December	31,	2015	and	2014,	in	addition	to	the	liability	for	unrecognized	tax benefits,	the	Firm	had	accrued	$578	million	and	$1.2	billion,	respectively,	for income	tax-related	interest	and	penalties.

# Tax	examination	status

JPMorgan	Chase	is	continually	under	examination	by	the	Internal	Revenue Service,	by	taxing	authorities	throughout	the	world,	and	by	many	states throughout	the	U.S.	The	following	table	summarizes	the	status	of	significant income	tax	examinations	of	JPMorgan	Chase	and	its	consolidated	subsidiaries	as of	December	31,	2015.

| December	31,	2015 | Periods	under<br>examination | Status |
| :--- | :--- | :--- |
|  |  | Field\texamination |
| JPMorgan\tChase\t–\tU.S. | 2003\t–\t2005 | completed;\tat\tAppellate\tlevel |
|  |  | Field\texamination\tcompleted, |
|  |  | JPMorgan\tChase\tfiled |
|  |  | amended\treturns\tand |
| JPMorgan\tChase\t–\tU.S. | 2006\t–\t2010 | intends\tto\tappeal |
| JPMorgan\tChase\t–\tU.S. | 2011\t–\t2013 | Field\tExamination |
| JPMorgan\tChase\t–\tNew\tYork\nState | 2008\t–\t2011 | Field\tExamination |
| JPMorgan\tChase\t–\tCalifornia | 2011\t–\t2012 | Field\tExamination |
|  |  | Field\texamination\tof\tcertain |
| JPMorgan\tChase\t–\tU.K. | 2006\t–\t2012 | select\tentities |

# Note	27	–	Restrictions	on	cash	and	intercompany	funds transfers

The	business	of	JPMorgan	Chase	Bank,	National	Association	("JPMorgan	Chase Bank,	N.A.")	is	subject	to	examination	and	regulation	by	the	Office	of	the Comptroller	of	the	Currency.	The	Bank	is	a	member	of	the	U.S.	Federal	Reserve System,	and	its	deposits	in	the	U.S.	are	insured	by	the	FDIC.

The	Federal	Reserve	requires	depository	institutions	to	maintain	cash	reserves with	a	Federal	Reserve	Bank.	The	average	required	amount	of	reserve	balances deposited	by	the	Firm's	bank	subsidiaries	with	various	Federal	Reserve	Banks was	approximately	$14.4	billion	and	$10.6	billion	in	2015	and	2014,	respectively.

Restrictions	imposed	by	U.S.	federal	law	prohibit	JPMorgan	Chase	&	Co. ("Parent	Company")	and	certain	of	its	affiliates	from	borrowing	from	banking subsidiaries	unless	the	loans	are	secured	in	specified	amounts.	Such	secured loans	provided	by	any	banking	subsidiary	to	the	Parent	Company	or	to	any particular	affiliate,	together	with	certain	other	transactions	with	such	affiliate, (collectively	referred	to	as	"covered	transactions"),	are	generally	limited	to	10% of	the	banking	subsidiary's	total	capital,	as	determined	by	the	risk-based	capital guidelines;	the	aggregate	amount	of	covered	transactions	between	any	banking subsidiary	and	all	of	its	affiliates	is	limited	to	20%	of	the	banking	subsidiary's total	capital.

The	principal	sources	of	JPMorgan	Chase's	income	(on	a	parent	company-only basis)	are	dividends	and	interest	from	JPMorgan	Chase	Bank,	N.A.,	and	the	other banking	and	nonbanking	subsidiaries	of	JPMorgan	Chase.	In	addition	to dividend	restrictions	set	forth	in	statutes	and	regulations,	the	Federal	Reserve,	the Office	of	the	Comptroller	of	the	Currency	("OCC")	and	the	FDIC	have	authority under	the	Financial	Institutions	Supervisory	Act	to	prohibit	or	to	limit	the payment	of	dividends	by	the	banking	organizations	they	supervise,	including JPMorgan	Chase	and	its	subsidiaries	that	are	banks	or	bank	holding	companies, if,	in	the	banking	regulator's	opinion,	payment	of	a	dividend	would	constitute	an unsafe	or	unsound	practice	in	light	of	the	financial	condition	of	the	banking organization.

At	January	1,	2016,	JPMorgan	Chase's	banking	subsidiaries	could	pay,	in	the aggregate,	approximately	$25	billion	in	dividends	to	their	respective	bank holding	companies	without	the	prior	approval	of	their	relevant	banking regulators.	The	capacity	to	pay	dividends	in	2016	will	be	supplemented	by	the banking	subsidiaries'	earnings	during	the	year.

In	compliance	with	rules	and	regulations	established	by	U.S.	and	non-U.S. regulators,	as	of	December	31,	2015	and	2014,	cash	in	the	amount	of	$12.6 billion	and	$16.8	billion,	respectively,	were	segregated	in	special	bank	accounts for	the	benefit	of	securities	and	futures	brokerage	customers.	Also,	as	of December	31,	2015	and	2014,	the	Firm	had	receivables	within	other	assets	of $16.2	billion	and	$14.9	billion,	respectively,	consisting	of	cash	deposited	with clearing	organizations	for	the	benefit	of	customers.	Securities	with	a	fair	value	of $20.0	billion	and	$10.1	billion,	respectively,	were	also	restricted	in	relation	to customer	activity.	In	addition,	as	of	December	31,	2015	and	2014,	the	Firm	had other	restricted	cash	of	$3.7	billion	and	$3.3	billion,	respectively,	primarily representing	cash	reserves	held	at	non-U.S.	central	banks	and	held	for	other general	purposes.

# Note	28	–	Regulatory	capital

The	Federal	Reserve	establishes	capital	requirements,	including	well-capitalized standards,	for	the	consolidated	financial	holding	company.	The	OCC	establishes similar	capital	requirements	and	standards	for	the	Firm's	national	banks, including	JPMorgan	Chase	Bank,	N.A.	and	Chase	Bank	USA,	N.A.

Basel	III	capital	rules,	for	large	and	internationally	active	U.S.	bank	holding companies	and	banks,	including	the	Firm	and	its	insured	depository	institution ("IDI")	subsidiaries,	revised,	among	other	things,	the	definition	of	capital	and introduced	a	new	common	equity	tier	1	capital	("CET1	capital")	requirement. Basel	III	presents	two	comprehensive	methodologies	for	calculating	risk- weighted	assets	("RWA"),	a	general	(Standardized)	approach,	which	replaced Basel	I	RWA	effective	January	1,	2015	("Basel	III	Standardized")	and	an advanced	approach,	which	replaced	Basel	II	RWA	("Basel	III	Advanced");	and sets	out	minimum	capital	ratios	and	overall	capital	adequacy	standards.	Certain of	the	requirements	of	Basel	III	are	subject	to	phase-in	periods	that	began	on January	1,	2014	and	continue	through	the	end	of	2018	("transitional	period").

There	are	three	categories	of	risk-based	capital	under	the	Basel	III	Transitional rules:	CET1	capital,	as	well	as	Tier	1	capital	and	Tier	2	capital.	CET1	capital predominantly	includes	common	stockholders'	equity	(including	capital	for AOCI	related	to	debt	and	equity	securities	classified	as	AFS	as	well	as	for defined	benefit	pension	and	OPEB	plans),	less	certain	deductions	for	goodwill, MSRs	and	deferred	tax	assets	that	arise	from	NOL	and	tax	credit	carryforwards. Tier	1	capital	predominantly	consists	of	CET1	capital	as	well	as	perpetual preferred	stock.	Tier	2	capital	includes	long-term	debt	qualifying	as	Tier	2	and qualifying	allowance	for	credit	losses.	Total	capital	is	Tier	1	capital	plus	Tier	2 capital.

The	following	tables	present	the	regulatory	capital,	assets	and	risk-based	capital ratios	for	JPMorgan	Chase	and	its	significant	national	bank	subsidiaries	under both	Basel	III	Standardized	Transitional	and	Basel	III	Advanced	Transitional	at December	31,	2015	and	2014.

# JPMorgan	Chase	&	Co.(f)

|  | Basel	III	Standardized	Transitional | Basel	III	Standardized	Transitional | Basel	III	Advanced	Transitional |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\nexcept\tratios) | Dec\t31,\n2015 | Dec\t31,\n2014 | Dec\t31,\n2015 | Dec\t31,\n2014 |
| Regulatory\tcapital |  |  |  |  |
| CET1\tcapital | $175,398 | $164,426 | $175,398 | $164,426 |
| Tier\t1\tcapital(a) | 200,482 | 186,263 | 200,482 | 186,263 |
| Total\tcapital | 234,413 | 221,117 | 224,616 | 210,576 |
| Assets |  |  |  |  |
| Risk-weighted(b) | 1,465,262 | 1,472,602 | 1,485,336 | 1,608,240 |
| Adjusted\taverage(c) | 2,361,177 | 2,464,915 | 2,361,177 | 2,464,915 |
| Capital\tratios(d) |  |  |  |  |
| CET1 | 12.0% | 11.2% | 11.8% | 10.2% |
| Tier\t1(a) | 13.7 | 12.6 | 13.5 | 11.6 |
| Total | 16.0 | 15.0 | 15.1 | 13.1 |
| Tier\t1\tleverage(e) | 8.5 | 7.6 | 8.5 | 7.6 |

|  | Basel	III	Standardized	Transitional | Basel	III	Standardized	Transitional | Basel	III	Advanced	Transitional |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\nexcept\tratios) | Dec\t31,\n2015 | Dec\t31,\n2014 | Dec\t31,\n2015 | Dec\t31,\n2014 |
| Regulatory\tcapital |  |  |  |  |
| CET1\tcapital | $168,857 | $156,567 | $168,857 | $156,567 |
| Tier\t1\tcapital(a) | 169,222 | 156,891 | 169,222 | 156,891 |
| Total\tcapital | 183,262 | 173,322 | 176,423 | 166,326 |
| Assets |  |  |  |  |
| Risk-weighted(b) | 1,264,056 | 1,230,358 | 1,249,607 | 1,330,175 |
| Adjusted\taverage(c) | 1,913,448 | 1,968,131 | 1,913,448 | 1,968,131 |
| Capital\tratios(d) |  |  |  |  |
| CET1 | 13.4% | 12.7% | 13.5% | 11.8% |
| Tier\t1(a) | 13.4 | 12.8 | 13.5 | 11.8 |
| Total | 14.5 | 14.1 | 14.1 | 12.5 |
| Tier\t1\tleverage(e) | 8.8 | 8.0 | 8.8 | 8.0 |

|  | Basel	III	Standardized	Transitional | Basel	III	Standardized	Transitional | Basel	III	Advanced	Transitional |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\nexcept\tratios) | Dec\t31,\n2015 | Dec\t31,\n2014 | Dec\t31,\n2015 | Dec\t31,\n2014 |
| Regulatory\tcapital |  |  |  |  |
| CET1\tcapital | $15,419 | $14,556 | $15,419 | $14,556 |
| Tier\t1\tcapital(a) | 15,419 | 14,556 | 15,419 | 14,556 |
| Total\tcapital | 21,418 | 20,517 | 20,069 | 19,206 |
| Assets |  |  |  |  |
| Risk-weighted(b) | 105,807 | 103,468 | 181,775 | 157,565 |
| Adjusted\taverage(c) | 134,152 | 128,111 | 134,152 | 128,111 |
| Capital\tratios(d) |  |  |  |  |
| CET1 | 14.6% | 14.1% | 8.5% | 9.2% |
| Tier\t1(a) | 14.6 | 14.1 | 8.5 | 9.2 |
| Total | 20.2 | 19.8 | 11.0 | 12.2 |
| Tier\t1\tleverage(e) | 11.5 | 11.4 | 11.5 | 11.4 |
| (a) | At\tDecember\t31,\t2015,\ttrust\tpreferred\tsecurities\tincluded\tin\tBasel\tIII\tTier\t1\tcapital\twere | At\tDecember\t31,\t2015,\ttrust\tpreferred\tsecurities\tincluded\tin\tBasel\tIII\tTier\t1\tcapital\twere | At\tDecember\t31,\t2015,\ttrust\tpreferred\tsecurities\tincluded\tin\tBasel\tIII\tTier\t1\tcapital\twere | $992 |

(a) At	December	31,	2015,	trust	preferred	securities	included	in	Basel	III	Tier	1	capital	were $992 million	and	$420	million	for	JPMorgan	Chase	and	JPMorgan	Chase	Bank,	N.A.,	respectively.	At December	31,	2015	Chase	Bank	USA,	N.A.	had	no	trust	preferred	securities.

(c) Adjusted	average	assets,	for	purposes	of	calculating	the	Tier	1	leverage	ratio,	includes	total quarterly	average	assets	adjusted	for	unrealized	gains/(losses)	on	securities,	less	deductions	for goodwill	and	other	intangible	assets,	defined	benefit	pension	plan	assets,	and	deferred	tax	assets related	to	net	operating	loss	carryforwards.

(d) For	each	of	the	risk-based	capital	ratios,	the	capital	adequacy	of	the	Firm	and	its	national	bank subsidiaries	are	evaluated	against	the	Basel	III	approach,	Standardized	or	Advanced,	resulting	in the	lower	ratio	(the	"Collins	Floor"),	as	required	by	the	Collins	Amendment	of	the	Dodd-Frank Act.

(e) The	Tier	1	leverage	ratio	is	not	a	risk-based	measure	of	capital.	This	ratio	is	calculated	by	dividing Tier	1	capital	by	adjusted	average	assets.

(f) Asset	and	capital	amounts	for	 JPMorgan	Chase's	banking	subsidiaries	reflect	intercompany transactions;	whereas	the	respective	amounts	for	JPMorgan	Chase	reflect	the	elimination	of intercompany	transactions.

Note:Rating	agencies	allow	measures	of	capital	to	be	adjusted	upward	for	deferred	tax	liabilities,	which have	resulted	from	both	non-taxable	business	combinations	and	from	tax-deductible	goodwill.	The Firm	had	deferred	tax	liabilities	resulting	from	non-taxable	business	combinations	of	$105	million and	$130	million	at	December	31,	2015,	and	2014,	respectively;	and	deferred	tax	liabilities resulting	from	tax-deductible	goodwill	of	$3.0	billion	and	$2.7	billion	at	December	31,	2015,	and 2014,	respectively.

Under	the	risk-based	capital	guidelines	of	the	Federal	Reserve,	JPMorgan	Chase is	required	to	maintain	minimum	ratios	of	CET1,	Tier	1	and	Total	capital	to	risk- weighted	assets,	as	well	as	minimum	leverage	ratios	(which	are	defined	as	Tier	1 capital	divided	by	adjusted	quarterly	average	assets).	Failure	to	meet	these minimum	requirements	could	cause	the	Federal	Reserve	to	take	action.	Bank subsidiaries	also	are	subject	to	these	capital	requirements	by	their	respective primary	regulators.	The	following	table	presents	the	minimum	ratios	to	which	the Firm	and	its	national	bank	subsidiaries	are	subject	as	of	December	31,	2015.

|  | Minimum	capital<br>ratios(a) | Well-capitalized	ratios<br>BHC(b) | IDI(c) |
| :--- | :--- | :--- | :--- |
| Capital\tratios |  |  |  |
| CET1 | 4.5% | —% | 6.5% |
| Tier\t1 | 6.0 | 6.0 | 8.0 |
| Total | 8.0 | 10.0 | 10.0 |
| Tier\t1\tleverage | 4.0 | — | 5.0 |

(a) As	defined	by	the	regulations	issued	by	the	Federal	Reserve,	OCC	and	FDIC	and	to	which	the	Firm and	its	national	bank	subsidiaries	are	subject.

(b) Represents	requirements	for	bank	holding	companies	pursuant	to	regulations	issued	by	the	Federal Reserve.

(c) Represents	requirements	for	bank	subsidiaries	pursuant	to	regulations	issued	under	the	FDIC Improvement	Act.

As	of	December	31,	2015	and	2014,	JPMorgan	Chase	and	all	of	its	banking subsidiaries	were	well-capitalized	and	met	all	capital	requirements	to	which	each was	subject.

# Note	29	–	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	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.

To	provide	for	probable	credit	losses	inherent	in	wholesale	and	certain	consumer lending-commitments,	an	allowance	for	credit	losses	on	lending-related commitments	is	maintained.	See	Note	15	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 December	31,	2015	and	2014.	The	amounts	in	the	table	below	for	credit	card	and home	equity	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	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	home	equity	lines	of	credit	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.

|  | Contractual	amount | Contractual	amount | Contractual	amount | Contractual	amount | Contractual	amount |  | Carrying	value(j) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | 2015 |  |  | 2014 | 2015 | 2014 |
| By\tremaining\tmaturity\tat\tDecember\t31,\n(in\tmillions) | Expires\tin\t1\nyear\tor\tless | Expires\tafter\n1\tyear\tthrough\n3\tyears | Expires\tafter\n3\tyears\nthrough\n5\tyears | Expires\tafter\t5\nyears | Total | Total |  |  |
| Lending-related |  |  |  |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard: |  |  |  |  |  |  |  |  |
| Home\tequity\t–\tsenior\tlien | $1,546 | $3,817 | $726 | $4,743 | $10,832 | $11,807 | $— | $— |
| Home\tequity\t–\tjunior\tlien | 2,375 | 4,354 | 657 | 4,538 | 11,924 | 14,859 | — | — |
| Prime\tmortgage(a) | 12,992 | — | — | — | 12,992 | 8,579 | — | — |
| Subprime\tmortgage | — | — | — | — | — | — | — | — |
| Auto | 8,907 | 1,160 | 80 | 90 | 10,237 | 10,462 | 2 | 2 |
| Business\tbanking | 11,085 | 699 | 92 | 475 | 12,351 | 11,894 | 12 | 11 |
| Student\tand\tother | 4 | 3 | — | 135 | 142 | 552 | — | — |
| Total\tconsumer,\texcluding\tcredit\tcard | 36,909 | 10,033 | 1,555 | 9,981 | 58,478 | 58,153 | 14 | 13 |
| Credit\tcard | 515,518 | — | — | — | 515,518 | 525,963 | — | — |
| Total\tconsumer(b) | 552,427 | 10,033 | 1,555 | 9,981 | 573,996 | 584,116 | 14 | 13 |
| Wholesale: |  |  |  |  |  |  |  |  |
| (c)(d)(e)\nOther\tunfunded\tcommitments\tto\textend\tcredit | 85,861 | 89,925 | 140,640 | 6,899 | 323,325 | 318,278 | 649 | 491 |
| Standby\tletters\tof\tcredit\tand\tother\tfinancial\tguarantees (c)(d)(e) | 16,083 | 14,287 | 5,819 | 2,944 | 39,133 | 44,272 | 548 | 671 |
| Other\tletters\tof\tcredit(c) | 3,570 | 304 | 67 | — | 3,941 | 4,331 | 2 | 1 |
| Total\twholesale(f)(g) | 105,514 | 104,516 | 146,526 | 9,843 | 366,399 | 366,881 | 1,199 | 1,163 |
| Total\tlending-related | $657,941 | $114,549 | $148,081 | $19,824 | $940,395 | $950,997 | $1,213 | $1,176 |
| Other\tguarantees\tand\tcommitments |  |  |  |  |  |  |  |  |
| Securities\tlending\tindemnification\tagreements\tand\tguarantees(h) | $183,329 | $— | $— | $— | $183,329 | $171,059 | $— | $— |
| Derivatives\tqualifying\tas\tguarantees | 3,194 | 285 | 11,160 | 39,145 | 53,784 | 53,589 | 222 | 80 |
| Unsettled\treverse\trepurchase\tand\tsecurities\tborrowing\tagreements | 42,482 | — | — | — | 42,482 | 40,993 | — | — |
| Unsettled\trepurchase\tand\tsecurities\tlending\tagreements | 21,798 | — | — | — | 21,798 | 42,578 | — | — |
| Loan\tsale\tand\tsecuritization-related\tindemnifications: |  |  |  |  |  |  |  |  |
| Mortgage\trepurchase\tliability | \tNA | \tNA | \tNA | \tNA | NA | NA | 148 | 275 |
| Loans\tsold\twith\trecourse | \tNA | \tNA | \tNA | \tNA | 4,274 | 6,063 | 82 | 102 |
| Other\tguarantees\tand\tcommitments(i) | 369 | 2,603 | 1,075 | 1,533 | 5,580 | 5,720 | (94) | (121) |

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

(b) Predominantly	all	consumer	lending-related	commitments	are	in	the	U.S.

(c) At	December	31,	2015	and	2014,	reflects	the	contractual	amount	net	of	risk	participations	totaling	 $385	million	and	$243	million,	respectively,	for	other	unfunded	commitments	to	extend	credit;	 $11.2	billion	and $13.0	billion,	respectively,	for	standby	letters	of	credit	and	other	financial	guarantees;	and	 $341	million	and	$469	million,	respectively,	for	other	letters	of	credit.	In	regulatory	filings	with	the	Federal	Reserve	these commitments	are	shown	gross	of	risk	participations.

(d) At	December	31,	2015	and	2014,	included	credit	enhancements	and	bond	and	commercial	paper	liquidity	commitments	to	U.S.	states	and	municipalities,	hospitals	and	other	nonprofit	entities	of $12.3	billion	and $14.8	billion,	respectively,	within	other	unfunded	commitments	to	extend	credit;	and	 $9.6	billion	and	$13.3	billion,	respectively,	within	standby	letters	of	credit	and	other	financial	guarantees.	Other	unfunded commitments	to	extend	credit	also	include	liquidity	facilities	to	nonconsolidated	municipal	bond	VIEs;	see	Note	16.

(e) Effective	in	2015,	commitments	to	issue	standby	letters	of	credit,	including	those	that	could	be	issued	under	multipurpose	facilities,	are	presented	as	other	unfunded	commitments	to	extend	credit.	Previously,	such commitments	were	presented	as	standby	letters	of	credit	and	other	financial	guarantees.	At	December	31,	2014,	these	commitments	were	$45.6	billion.	Prior	period	amounts	have	been	revised	to	conform	with	current period	presentation.

(f) At	December	31,	2015	and	2014,	the	U.S.	portion	of	the	contractual	amount	of	total	wholesale	lending-related	commitments	was	 77%	and	73%,	respectively.

(h) At	December	31,	2015	and	2014,	collateral	held	by	the	Firm	in	support	of	securities	lending	indemnification	agreements	was	 $190.6	billion	and	$177.1	billion,	respectively.	Securities	lending	collateral	consist	of primarily	cash	and	securities	issued	by	governments	that	are	members	of	the	Organisation	for	Economic	Co-operation	and	Development	("OECD")	and	U.S.	government	agencies.

(i) At	December	31,	2015	and	2014,	included	unfunded	commitments	of	 $50	million	and	$147	million,	respectively,	to	third-party	private	equity	funds;	and	 $871	million	and	$961	million,	respectively,	to	other	equity investments.	These	commitments	included	$73	million	and	$150	million,	respectively,	related	to	investments	that	are	generally	fair	valued	at	net	asset	value	as	discussed	in	Note	3.	In	addition,	at December	31,	2015 and	2014,	included	letters	of	credit	hedged	by	derivative	transactions	and	managed	on	a	market	risk	basis	of	 $4.6	billion	and	$4.5	billion,	respectively.

(j) For	lending-related	products,	the	carrying	value	represents	the	allowance	for	lending-related	commitments	and	the	guarantee	liability;	for	derivative-related	products,	the	carrying	value	represents	the	fair	value.

# 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.

Also	included	in	other	unfunded	commitments	to	extend	credit	are	commitments to	noninvestment-grade	counterparties	in	connection	with	leveraged	finance activities,	which	were	$32.1	billion	and	$23.4	billion	at	December	31,	2015	and 2014,	respectively.	For	further	information,	see	Note	3	and	Note	4.

The	Firm	acts	as	a	settlement	and	custody	bank	in	the	U.S.	tri-party	repurchase transaction	market.	In	its	role	as	settlement	and	custody	bank,	the	Firm	is exposed	to	the	intra-day	credit	risk	of	its	cash	borrower	clients,	usually	broker- dealers.	This	exposure	arises	under	secured	clearance	advance	facilities	that	the Firm	extends	to	its	clients	(i.e.	cash	borrowers);	these	facilities	contractually limit	the	Firm's	intra-day	credit	risk	to	the	facility	amount and	must	be	repaid	by	the	end	of	the	day.	As	of	December	31,	2015	and	2014, the	secured	clearance	advance	facility	maximum	outstanding	commitment amount	was	$2.9	billion	and	$12.6	billion,	respectively.

# Guarantees

U.S.	GAAP	requires	that	a	guarantor	recognize,	at	the	inception	of	a	guarantee,	a liability	in	an	amount	equal	to	the	fair	value	of	the	obligation	undertaken	in issuing	the	guarantee.	U.S.	GAAP	defines	a	guarantee	as	a	contract	that contingently	requires	the	guarantor	to	pay	a	guaranteed	party	based	upon:	(a) changes	in	an	underlying	asset,	liability	or	equity	security	of	the	guaranteed party;	or	(b)	a	third	party's	failure	to	perform	under	a	specified	agreement.	The Firm	considers	the	following	off–balance	sheet	lending-related	arrangements	to be	guarantees	under	U.S.	GAAP:	standby	letters	of	credit	and	financial guarantees,	securities	lending	indemnifications,	certain	indemnification agreements	included	within	third-party	contractual	arrangements	and	certain derivative	contracts.

As	required	by	U.S.	GAAP,	the	Firm	initially	records	guarantees	at	the	inception date	fair	value	of	the	obligation	assumed	(e.g.,	the	amount	of	consideration received	or	the	net	present	value	of	the	premium	receivable).	For	certain	types	of guarantees,	the	Firm	records	this	fair	value	amount	in	other	liabilities	with	an offsetting	entry	recorded	in	cash	(for	premiums	received),	or	other	assets	(for premiums	receivable).	Any	premium	receivable	recorded	in	other	assets	is reduced	as	cash	is	received	under	the	contract,	and	the	fair	value	of	the	liability recorded	at	inception	is	amortized	into	income	as	lending	and	deposit-related fees	over	the	life	of	the	guarantee	contract.	For	indemnifications	provided	in sales	agreements,	a	portion	of	the	sale	proceeds	is	allocated	to	the	guarantee, which	adjusts	the	gain	or	loss	that	would	otherwise	result	from	the	transaction. For	these	indemnifications,	the	initial	liability	is	amortized	to	income	as	the Firm's	risk	is	reduced	(i.e.,	over	time	or	when	the	indemnification	expires).	Any contingent	liability	that	exists	as	a	result	of	issuing	the	guarantee	or indemnification	is	recognized	when	it	becomes	probable	and	reasonably estimable.	The	contingent	portion	of	the	liability	is	not	recognized	if	the estimated	amount	is	less	than	the	carrying	amount	of	the	liability	recognized	at inception	(adjusted	for	any	amortization).	The	recorded	amounts	of	the	liabilities related	to	guarantees	and	indemnifications	at	December	31,	2015	and	2014, excluding	the	allowance	for	credit	losses	on	lending-related	commitments,	are discussed	below.

# Standby	letters	of	credit	and	other	financial	guarantees

Standby	letters	of	credit	("SBLC")	and	other	financial	guarantees	are	conditional lending	commitments	issued	by	the	Firm	to	guarantee	the	performance	of	a customer	to	a	third	party	under	certain	arrangements,	such	as	commercial	paper facilities,	bond	financings,	acquisition	financings,	trade	and	similar	transactions. The	carrying	values	of	standby	and	other	letters	of	credit	were	$550	million	and $672	million	at	December	31,	2015	and	2014,	respectively,	which	were	classified in	accounts	payable	and	other	liabilities	on	the	Consolidated	balance	sheets; these	carrying	values	included	$123	million	and	$118	million,	respectively,	for the	allowance	for	lending-related	commitments,	and	$427	million	and	$554 million,	respectively,	for	the	guarantee	liability	and	corresponding	asset.

The	following	table	summarizes	the	types	of	facilities	under	which	standby	letters	of	credit	and	other	letters	of	credit	arrangements	are	outstanding	by	the	ratings	profiles of	the	Firm's	customers,	as	of	December	31,	2015	and	2014.

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

|  | 2015 |  | 2014 |  |
| :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions) | Standby\tletters\tof\ncredit\tand\tother\tfinancial\nguarantees(b) | Other\tletters\nof\tcredit | Standby\tletters\tof\ncredit\tand\tother\tfinancial\nguarantees(b) | Other\tletters\nof\tcredit |
| Investment-grade(a) | $31,751 | $3,290 | $37,709 | $3,476 |
| Noninvestment-grade(a) | 7,382 | 651 | 6,563 | 855 |
| Total\tcontractual\tamount | $39,133 | $3,941 | $44,272 | $4,331 |
| Allowance\tfor\tlending-related\tcommitments | $121 | $2 | $117 | $1 |
| Commitments\twith\tcollateral | 18,825 | 996 | 20,750 | 1,509 |

(a) The	ratings	scale	is	based	on	the	Firm's	internal	ratings,	which	generally	correspond	to	ratings	as	defined	by	S&P	and Moody's.

(b) Effective	in	2015,	commitments	to	issue	standby	letters	of	credit,	including	those	that	could	be	issued	under	multipurpose	facilities,	are	presented	as	other	unfunded	commitments	to	extend	credit.	Previously,	such	commitments	were presented	as	standby	letters	of	credit	and	other	financial	guarantees.	At	December	31,	2014,	these	commitments	were	$45.6	billion.	Prior	period	amounts	have	been	revised	to	conform	with	current	period	presentation.

# Securities	lending	indemnifications

Through	the	Firm's	securities	lending	program,	customers'	securities,	via custodial	and	non-custodial	arrangements,	may	be	lent	to	third	parties.	As	part	of this	program,	the	Firm	provides	an	indemnification	in	the	lending	agreements which	protects	the	lender	against	the	failure	of	the	borrower	to	return	the	lent securities.	To	minimize	its	liability	under	these	indemnification	agreements,	the Firm	obtains	cash	or	other	highly	liquid	collateral	with	a	market	value	exceeding 100%	of	the	value	of	the	securities	on	loan	from	the	borrower.	Collateral	is marked	to	market	daily	to	help	assure	that	collateralization	is	adequate. Additional	collateral	is	called	from	the	borrower	if	a	shortfall	exists,	or	collateral may	be	released	to	the	borrower	in	the	event	of	overcollateralization.	If	a borrower	defaults,	the	Firm	would	use	the	collateral	held	to	purchase replacement	securities	in	the	market	or	to	credit	the	lending	customer	with	the cash	equivalent	thereof.

# Derivatives	qualifying	as	guarantees

In	addition	to	the	contracts	described	above,	the	Firm	transacts	certain	derivative contracts	that	have	the	characteristics	of	a	guarantee	under	U.S.	GAAP.	These contracts	include	written	put	options	that	require	the	Firm	to	purchase	assets upon	exercise	by	the	option	holder	at	a	specified	price	by	a	specified	date	in	the future.	The	Firm	may	enter	into	written	put	option	contracts	in	order	to	meet client	needs,	or	for	other	trading	purposes.	The	terms	of	written	put	options	are typically	five	years	or	less.	Derivatives	deemed	to	be	guarantees	also	include contracts	such	as	stable	value	derivatives	that	require	the	Firm	to	make	a payment	of	the	difference	between	the	market	value	and	the	book	value	of	a counterparty's	reference	portfolio	of	assets	in	the	event	that	market	value	is	less than	book	value	and	certain	other	conditions	have	been	met.	Stable	value derivatives,	commonly	referred	to	as	"stable	value	wraps",	are	transacted	in	order to	allow	investors	to	realize	investment	returns	with	less	volatility	than	an unprotected	portfolio	and	are	typically	longer-term	or	may	have	no	stated maturity,	but	allow	the	Firm	to	terminate	the	contract	under	certain	conditions.

Derivatives	deemed	to	be	guarantees	are	recorded	on	the	Consolidated	balance sheets	at	fair	value	in	trading	assets	and	trading	liabilities.	The	total	notional value	of	the	derivatives	that	the	Firm	deems	to	be	guarantees	was	$53.8	billion and	$53.6	billion	at	December	31,	2015	and	2014,	respectively.	The	notional amount	generally	represents	the	Firm's	maximum	exposure	to	derivatives qualifying	as	guarantees.	However,	exposure	to	certain	stable	value	contracts	is contractually	limited	to	a	substantially	lower	percentage	of	the	notional	amount; the	notional	amount	on	these	stable	value	contracts	was	$28.4	billion	and $27.5	billion	at	December	31,	2015	and	2014,	respectively,	and	the	maximum exposure	to	loss	was	$3.0	billion	and	$2.9	billion	at	December	31,	2015	and 2014,	respectively.	The	fair	values	of	the	contracts	reflect	the	probability	of whether	the	Firm	will	be	required	to	perform	under	the	contract.	The	fair	value	of derivatives	that	the	Firm	deems	to	be	guarantees	were	derivative	payables	of $236	million	and	$102	million	and	derivative	receivables	of	$14	million	and $22	million	at	December	31,	2015	and

2014,	respectively.	The	Firm	reduces	exposures	to	these	contracts	by	entering into	offsetting	transactions,	or	by	entering	into	contracts	that	hedge	the	market risk	related	to	the	derivative	guarantees.

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.	For	a	further	discussion	of	credit	derivatives,	see	Note	6.

# Unsettled	reverse	repurchase	and	securities	borrowing	agreements,	and unsettled	repurchase	and	securities	lending	agreements

In	the	normal	course	of	business,	the	Firm	enters	into	reverse	repurchase agreements	and	securities	borrowing	agreements,	which	are	secured	financing agreements.	Such	agreements	settle	at	a	future	date.	At	settlement,	these commitments	result	in	the	Firm	advancing	cash	to	and	receiving	securities collateral	from	the	counterparty.	The	Firm	also	enters	into	repurchase	agreements and	securities	lending	agreements.	At	settlement,	these	commitments	result	in	the Firm	receiving	cash	from	and	providing	securities	collateral	to	the	counterparty. These	agreements	generally	do	not	meet	the	definition	of	a	derivative,	and therefore,	are	not	recorded	on	the	Consolidated	balance	sheets	until	settlement date.	These	agreements	predominantly	consist	of	agreements	with	regular-way settlement	periods.	For	a	further	discussion	of	securities	purchased	under	resale agreements	and	securities	borrowed,	and	securities	sold	under	repurchase agreements	and	securities	loaned,	see	Note	13.

# Loan	sales-	and	securitization-related	indemnifications

# Mortgage	repurchase	liability

In	connection	with	the	Firm's	mortgage	loan	sale	and	securitization	activities with	U.S.	GSEs,	as	described	in	Note	16,	the	Firm	has	made	representations	and warranties	that	the	loans	sold	meet	certain	requirements.	The	Firm	has	been,	and may	be,	required	to	repurchase	loans	and/or	indemnify	U.S.	GSEs	(e.g.,	with "make-whole"	payments	to	reimburse	U.S.	GSEs	for	their	realized	losses	on liquidated	loans).	To	the	extent	that	repurchase	demands	that	are	received	relate to	loans	that	the	Firm	purchased	from	third	parties	that	remain	viable,	the	Firm typically	will	have	the	right	to	seek	a	recovery	of	related	repurchase	losses	from the	third	party.	Generally,	the	maximum	amount	of	future	payments	the	Firm would	be	required	to	make	for	breaches	of	these	representations	and	warranties would	be	equal	to	the	unpaid	principal	balance	of	such	loans	that	are	deemed	to have	defects	that	were	sold	to	purchasers	(including	securitization-related	SPEs) plus,	in	certain	circumstances,	accrued	interest	on	such	loans	and	certain expense.	The	carrying	values	of	the	repurchase	liabilities	were	$148	million	and $275	million	at	December	31,	2015	and	2014,	respectively.

# Private	label	securitizations

The	liability	related	to	repurchase	demands	associated	with	private	label securitizations	is	separately	evaluated	by	the	Firm	in	establishing	its	litigation reserves.

On	November	15,	2013,	the	Firm	announced	that	it	had	reached	a	$4.5	billion agreement	with	21	major	institutional	investors	to	make	a	binding	offer	to	the trustees	of	330	residential	mortgage-backed	securities	trusts	issued	by J.P.Morgan,	Chase,	and	Bear	Stearns	("RMBS	Trust	Settlement")	to	resolve	all representation	and	warranty	claims,	as	well	as	all	servicing	claims,	on	all	trusts issued	by	J.P.	Morgan,	Chase,	and	Bear	Stearns	between	2005	and	2008.	For further	information	see	Note	31.

In	addition,	from	2005	to	2008,	Washington	Mutual	made	certain	loan	level representations	and	warranties	in	connection	with	approximately	$165	billion	of residential	mortgage	loans	that	were	originally	sold	or	deposited	into	private- label	securitizations	by	Washington	Mutual.	Of	the	$165	billion,	approximately $81	billion	has	been	repaid.	In	addition,	approximately	$50	billion	of	the principal	amount	of	such	loans	has	liquidated	with	an	average	loss	severity	of 59%.	Accordingly,	the	remaining	outstanding	principal	balance	of	these	loans	as of	December	31,	2015,	was	approximately	$33	billion,	of	which	$6	billion	was 60	days	or	more	past	due.	The	Firm	believes	that	any	repurchase	obligations related	to	these	loans	remain	with	the	FDIC	receivership.

# For	additional	information	regarding	litigation,	see	Note	31.

# Loans	sold	with	recourse

The	Firm	provides	servicing	for	mortgages	and	certain	commercial	lending products	on	both	a	recourse	and	nonrecourse	basis.	In	nonrecourse	servicing,	the principal	credit	risk	to	the	Firm	is	the	cost	of	temporary	servicing	advances	of funds	(i.e.,	normal	servicing	advances).	In	recourse	servicing,	the	servicer	agrees to	share	credit	risk	with	the	owner	of	the	mortgage	loans,	such	as	Fannie	Mae	or Freddie	Mac	or	a	private	investor,	insurer	or	guarantor.	Losses	on	recourse servicing	predominantly	occur	when	foreclosure	sales	proceeds	of	the	property underlying	a	defaulted	loan	are	less	than	the	sum	of	the	outstanding	principal balance,	plus	accrued	interest	on	the	loan	and	the	cost	of	holding	and	disposing of	the	underlying	property.	The	Firm's	securitizations	are	predominantly nonrecourse,	thereby	effectively	transferring	the	risk	of	future	credit	losses	to	the purchaser	of	the	mortgage-backed	securities	issued	by	the	trust.	At	December	31, 2015	and	2014,	the	unpaid	principal	balance	of	loans	sold	with	recourse	totaled $4.3	billion	and	$6.1	billion,	respectively.	The	carrying	value	of	the	related liability	that	the	Firm	has	recorded,	which	is	representative	of	the	Firm's	view	of the	likelihood	it	will	have	to	perform	under	its	recourse	obligations,	was	$82 million	and	$102	million	at	December	31,	2015	and	2014,	respectively.

# Other	off-balance	sheet	arrangements

# Indemnification	agreements	–	general

In	connection	with	issuing	securities	to	investors,	the	Firm	may	enter	into contractual	arrangements	with	third	parties	that	require	the	Firm	to	make	a payment	to	them	in	the	event	of	a	change	in	tax	law	or	an	adverse	interpretation of	tax	law.	In	certain	cases,	the	contract	also	may	include	a	termination	clause, which	would	allow	the	Firm	to	settle	the	contract	at	its	fair	value	in	lieu	of making	a	payment	under	the	indemnification	clause.	The	Firm	may	also	enter into

indemnification	clauses	in	connection	with	the	licensing	of	software	to	clients ("software	licensees")	or	when	it	sells	a	business	or	assets	to	a	third	party	("third- party	purchasers"),	pursuant	to	which	it	indemnifies	software	licensees	for	claims of	liability	or	damages	that	may	occur	subsequent	to	the	licensing	of	the software,	or	third-party	purchasers	for	losses	they	may	incur	due	to	actions	taken by	the	Firm	prior	to	the	sale	of	the	business	or	assets.	It	is	difficult	to	estimate	the Firm's	maximum	exposure	under	these	indemnification	arrangements,	since	this would	require	an	assessment	of	future	changes	in	tax	law	and	future	claims	that may	be	made	against	the	Firm	that	have	not	yet	occurred.	However,	based	on historical	experience,	management	expects	the	risk	of	loss	to	be	remote.

# Card	charge-backs

Commerce	Solutions,	Card's	merchant	services	business,	is	a	global	leader	in payment	processing	and	merchant	acquiring.

Under	the	rules	of	Visa	USA,	Inc.,	and	MasterCard	International,	JPMorgan Chase	Bank,	N.A.,	is	primarily	liable	for	the	amount	of	each	processed	card	sales transaction	that	is	the	subject	of	a	dispute	between	a	cardmember	and	a merchant.	If	a	dispute	is	resolved	in	the	cardmember's	favor,	Commerce Solutions	will	(through	the	cardmember's	issuing	bank)	credit	or	refund	the amount	to	the	cardmember	and	will	charge	back	the	transaction	to	the	merchant. If	Commerce	Solutions	is	unable	to	collect	the	amount	from	the	merchant, Commerce	Solutions	will	bear	the	loss	for	the	amount	credited	or	refunded	to	the cardmember.	Commerce	Solutions	mitigates	this	risk	by	withholding	future settlements,	retaining	cash	reserve	accounts	or	by	obtaining	other	security. However,	in	the	unlikely	event	that:	(1)	a	merchant	ceases	operations	and	is unable	to	deliver	products,	services	or	a	refund;	(2)	Commerce	Solutions	does not	have	sufficient	collateral	from	the	merchant	to	provide	customer	refunds; and	(3)	Commerce	Solutions	does	not	have	sufficient	financial	resources	to provide	customer	refunds,	JPMorgan	Chase	Bank,	N.A.,	would	recognize	the loss.

Commerce	Solutions	incurred	aggregate	losses	of	$12	million,	$10	million,	and $14	million	on	$949.3	billion,	$847.9	billion,	and	$750.1	billion	of	aggregate volume	processed	for	the	years	ended	December	31,	2015,	2014	and	2013, respectively.	Incurred	losses	from	merchant	charge-backs	are	charged	to	other expense,	with	the	offset	recorded	in	a	valuation	allowance	against	accrued interest	and	accounts	receivable	on	the	Consolidated	balance	sheets.	The carrying	value	of	the	valuation	allowance	was	$20	million	and	$4	million	at December	31,	2015	and	2014,	respectively,	which	the	Firm	believes,	based	on historical	experience	and	the	collateral	held	by	Commerce	Solutions	of	$136 million	and	$174	million	at	December	31,	2015	and	2014,	respectively,	is representative	of	the	payment	or	performance	risk	to	the	Firm	related	to	charge- backs.

# Clearing	Services	–	Client	Credit	Risk

The	Firm	provides	clearing	services	for	clients	by	entering	into	securities purchases	and	sales	and	derivative	transactions,	with	CCPs,	including	ETDs	such as	futures	and	options,	as	well	as	OTC-cleared	derivative	contracts.	As	a	clearing member,	the	Firm	stands	behind	the	performance	of	its	clients,	collects	cash	and securities	collateral	(margin)	as	well	as	any	settlement	amounts	due	from	or	to clients,	and	remits	them	to	the	relevant	CCP	or	client	in	whole	or	part.	There	are two	types	of	margin.	Variation	margin	is	posted	on	a	daily	basis	based	on	the value	of	clients'	derivative	contracts.	Initial	margin	is	posted	at	inception	of	a derivative	contract,	generally	on	the	basis	of	the	potential	changes	in	the variation	margin	requirement	for	the	contract.

As	clearing	member,	the	Firm	is	exposed	to	the	risk	of	nonperformance	by	its clients,	but	is	not	liable	to	clients	for	the	performance	of	the	CCPs.	Where possible,	the	Firm	seeks	to	mitigate	its	risk	to	the	client	through	the	collection	of appropriate	amounts	of	margin	at	inception	and	throughout	the	life	of	the transactions.	The	Firm	can	also	cease	providing	clearing	services	if	clients	do	not adhere	to	their	obligations	under	the	clearing	agreement.	In	the	event	of	non- performance	by	a	client,	the	Firm	would	close	out	the	client's	positions	and access	available	margin.	The	CCP	would	utilize	any	margin	it	holds	to	make itself	whole,	with	any	remaining	shortfalls	required	to	be	paid	by	the	Firm	as	a clearing	member.

The	Firm	reflects	its	exposure	to	nonperformance	risk	of	the	client	through	the recognition	of	margin	payables	or	receivables	to	clients	and	CCPs,	but	does	not reflect	the	clients'	underlying	securities	or	derivative	contracts	on	its Consolidated	Financial	Statements.

It	is	difficult	to	estimate	the	Firm's	maximum	possible	exposure	through	its	role as	a	clearing	member,	as	this	would	require	an	assessment	of	transactions	that clients	may	execute	in	the	future.	However,	based	upon	historical	experience, and	the	credit	risk	mitigants	available	to	the	Firm,	management	believes	it	is unlikely	that	the	Firm	will	have	to	make	any	material	payments	under	these arrangements	and	the	risk	of	loss	is	expected	to	be	remote.

For	information	on	the	derivatives	that	the	Firm	executes	for	its	own	account	and records	in	its	Consolidated	Financial	Statements,	see	Note	6.

# Exchange	&	Clearing	House	Memberships

The	Firm	is	a	member	of	several	securities	and	derivative	exchanges	and	clearing houses,	both	in	the	U.S.	and	other	countries,	and	it	provides	clearing	services. Membership	in	some	of	these	organizations	requires	the	Firm	to	pay	a	pro	rata share	of	the	losses	incurred	by	the	organization	as	a	result	of	the	default	of another	member.	Such	obligations	vary	with	different	organizations.	These obligations	may	be	limited	to	members	who	dealt	with	the	defaulting	member	or to	the	amount	(or	a	multiple	of	the	amount)	of	the	Firm's	contribution	to	the guarantee	fund	maintained	by	a	clearing	house	or	exchange	as	part	of	the resources	available	to	cover	any	losses	in	the	event	of	a	member	default. Alternatively,	these	obligations	may	be	a	full	pro-rata	share

of	the	residual	losses	after	applying	the	guarantee	fund.	Additionally,	certain clearing	houses	require	the	Firm	as	a	member	to	pay	a	pro	rata	share	of	losses resulting	from	the	clearing	house's	investment	of	guarantee	fund	contributions and	initial	margin,	unrelated	to	and	independent	of	the	default	of	another member.	Generally	a	payment	would	only	be	required	should	such	losses	exceed the	resources	of	the	clearing	house	or	exchange	that	are	contractually	required	to absorb	the	losses	in	the	first	instance.	It	is	difficult	to	estimate	the	Firm's maximum	possible	exposure	under	these	membership	agreements,	since	this would	require	an	assessment	of	future	claims	that	may	be	made	against	the	Firm that	have	not	yet	occurred.	However,	based	on	historical	experience, management	expects	the	risk	of	loss	to	be	remote.

# Guarantees	of	subsidiaries

In	the	normal	course	of	business,	JPMorgan	Chase	&	Co.	("Parent	Company") may	provide	counterparties	with	guarantees	of	certain	of	the	trading	and	other obligations	of	its	subsidiaries	on	a	contract-by-contract	basis,	as	negotiated	with the	Firm's	counterparties.	The	obligations	of	the	subsidiaries	are	included	on	the Firm's	Consolidated	balance	sheets	or	are	reflected	as	off-balance	sheet commitments;	therefore,	the	Parent	Company	has	not	recognized	a	separate liability	for	these	guarantees.	The	Firm	believes	that	the	occurrence	of	any	event that	would	trigger	payments	by	the	Parent	Company	under	these	guarantees	is remote.

The	Parent	Company	has	guaranteed	certain	debt	of	its	subsidiaries,	including both	long-term	debt	and	structured	notes.	These	guarantees	are	not	included	in the	table	on	page	291	of	this	Note.	For	additional	information,	see	Note	21.

JPMorgan	Chase	Financial	Company	LLC	("JPMFC"),	a	direct,	100%-owned finance	subsidiary	of	the	Parent	Company,	was	formed	on	September	30,	2015, for	the	purpose	of	issuing	debt	and	other	securities	in	offerings	to	investors.	Any securities	issued	by	JPMFC	will	be	fully	and	unconditionally	guaranteed	by	the Parent	Company,	and	these	guarantees	will	rank	on	a	parity	with	the	Firm's unsecured	and	unsubordinated	indebtedness.	As	of	December	31,	2015,	no securities	had	been	issued	by	JPMFC.

# Note	30	–	Commitments,	pledged	assets	and	collateral

# Lease	commitments

At	December	31,	2015,	JPMorgan	Chase	and	its	subsidiaries	were	obligated under	a	number	of	noncancelable	operating	leases	for	premises	and	equipment used	primarily	for	banking	purposes,	and	for	energy-related	tolling	service agreements.	Certain	leases	contain	renewal	options	or	escalation	clauses providing	for	increased	rental	payments	based	on	maintenance,	utility	and	tax increases,	or	they	require	the	Firm	to	perform	restoration	work	on	leased premises.	No	lease	agreement	imposes	restrictions	on	the	Firm's	ability	to	pay dividends,	engage	in	debt	or	equity	financing	transactions	or	enter	into	further lease	agreements.

The	following	table	presents	required	future	minimum	rental	payments	under operating	leases	with	noncancelable	lease	terms	that	expire	after	December	31, 2015.

Year	ended	December	31,	(in	millions)

| Year	ended	December	31,	(in	millions) |  |
| :--- | :--- |
| 2016 | $1,668 |
| 2017 | 1,647 |
| 2018 | 1,447 |
| 2019 | 1,263 |
| 2020 | 1,125 |
| After\t2020 | 4,679 |
| Total\tminimum\tpayments\trequired | 11,829 |
| Less:\tSublease\trentals\tunder\tnoncancelable\tsubleases | (1,889) |
| Net\tminimum\tpayment\trequired | $9,940 |

Total	rental	expense	was	as	follows.

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Gross\trental\texpense | $2,015 | $2,255 | $2,187 |
| Sublease\trental\tincome | (411) | (383) | (341) |
| Net\trental\texpense | $1,604 | $1,872 | $1,846 |

# Pledged	assets

The	Firm	may	pledge	financial	assets	that	it	owns	to	maintain	potential borrowing	capacity	with	central	banks	and	for	other	purposes,	including	to secure	borrowings	and	public	deposits,	and	to	collateralize	repurchase	and	other securities	financing	agreements.	Certain	of	these	pledged	assets	may	be	sold	or repledged	by	the	secured	parties	and	are	identified	as	financial	instruments owned	(pledged	to	various	parties)	on	the	Consolidated	balance	sheets.	At December	31,	2015	and	2014,	the	Firm	had	pledged	assets	of	$385.6	billion	and $324.5	billion,	respectively,	at	Federal	Reserve	Banks	and	FHLBs.	In	addition, as	of	December	31,	2015	and	2014,	the	Firm	had	pledged	$50.7	billion	and	$60.1 billion,	respectively,	of	financial	assets	that	may	not	be	sold	or	repledged	by	the secured	parties.	Total	assets	pledged	do	not	include	assets	of	consolidated	VIEs; these	assets	are	used	to	settle	the	liabilities	of	those	entities.	See	Note	16	for additional	information	on	assets	and	liabilities	of	consolidated	VIEs.	For additional	information	on	the	Firm's	securities	financing	activities	and	long-term debt,	see	Note	13	and	Note	21,	respectively.	The	significant	components	of	the Firm's	pledged	assets	were	as	follows.

| December	31,	(in	billions) | 2015 | 2014 |
| :--- | :--- | :--- |
| Securities | $124.3 | $118.7 |
| Loans | 298.6 | 248.2 |
| Trading\tassets\tand\tother | 144.9 | 169.0 |
| Total\tassets\tpledged | $567.8 | $535.9 |

# Collateral

At	December	31,	2015	and	2014,	the	Firm	had	accepted	assets	as	collateral	that it	could	sell	or	repledge,	deliver	or	otherwise	use	with	a	fair	value	of approximately	$748.5	billion	and	$761.7	billion,	respectively.	This	collateral	was generally	obtained	under	resale	agreements,	securities	borrowing	agreements, customer	margin	loans	and	derivative	agreements.	Of	the	collateral	received, approximately	$580.9	billion	and	$596.8	billion,	respectively,	were	sold	or repledged,	generally	as	collateral	under	repurchase	agreements,	securities lending	agreements	or	to	cover	short	sales	and	to	collateralize	deposits	and derivative	agreements.

# Note	31	–	Litigation

# Contingencies

As	of	December	31,	2015,	the	Firm	and	its	subsidiaries	and	affiliates	are defendants	or	putative	defendants	in	numerous	legal	proceedings,	including private,	civil	litigations	and	regulatory/government	investigations.	The	litigations range	from	individual	actions	involving	a	single	plaintiff	to	class	action	lawsuits with	potentially	millions	of	class	members.	Investigations	involve	both	formal and	informal	proceedings,	by	both	governmental	agencies	and	self-regulatory organizations.	These	legal	proceedings	are	at	varying	stages	of	adjudication, arbitration	or	investigation,	and	involve	each	of	the	Firm's	lines	of	business	and geographies	and	a	wide	variety	of	claims	(including	common	law	tort	and contract	claims	and	statutory	antitrust,	securities	and	consumer	protection claims),	some	of	which	present	novel	legal	theories.

The	Firm	believes	the	estimate	of	the	aggregate	range	of	reasonably	possible losses,	in	excess	of	reserves	established,	for	its	legal	proceedings	is	from	$0	to approximately	$3.6	billion	at	December	31,	2015.	This	estimated	aggregate range	of	reasonably	possible	losses	is	based	upon	currently	available	information for	those	proceedings	in	which	the	Firm	believes	that	an	estimate	of	reasonably possible	loss	can	be	made.	For	certain	matters,	the	Firm	does	not	believe	that such	an	estimate	can	be	made.	The	Firm's	estimate	of	the	aggregate	range	of reasonably	possible	losses	involves	significant	judgment,	given	the	number, variety	and	varying	stages	of	the	proceedings	(including	the	fact	that	many	are	in preliminary	stages),	the	existence	in	many	such	proceedings	of	multiple defendants	(including	the	Firm)	whose	share	of	liability	has	yet	to	be determined,	the	numerous	yet-unresolved	issues	in	many	of	the	proceedings (including	issues	regarding	class	certification	and	the	scope	of	many	of	the claims)	and	the	attendant	uncertainty	of	the	various	potential	outcomes	of	such proceedings,	particularly	proceedings	that	could	result	from	government investigations.	Accordingly,	the	Firm's	estimate	will	change	from	time	to	time, and	actual	losses	may	vary	significantly.

Set	forth	below	are	descriptions	of	the	Firm's	material	legal	proceedings.

Auto	Dealer	Regulatory	Matter.	The	U.S.	Department	of	Justice	("DOJ")	is investigating	potential	statistical	disparities	in	markups	charged	to	borrowers	of different	races	and	ethnicities	by	automobile	dealers	on	loans	originated	by	those dealers	and	purchased	by	the	Firm.

CIO	Litigation.	The	Firm	has	been	sued	in	a	consolidated	shareholder	class action,	a	consolidated	putative	class	action	brought	under	the	Employee Retirement	Income	Security	Act	("ERISA")	and	seven	shareholder	derivative actions	brought	in	Delaware	state	court	and	in	New	York	federal	and	state	courts relating	to	2012	losses	in	the	synthetic	credit	portfolio	managed	by	the	Firm's Chief	Investment	Office	("CIO").	A	settlement	of	the	shareholder	class	action, under	which	the	Firm	will	pay	$150	million,

has	been	preliminarily	approved	by	the	court.	The	putative	ERISA	class	action has	been	dismissed,	and	plaintiffs	have	filed	a	notice	of	appeal.	Six	of	the	seven shareholder	derivative	actions	have	been	dismissed.

Credit	Default	Swaps	Investigations	and	Litigation.	In	July	2013,	the	European Commission	(the	"EC")	filed	a	Statement	of	Objections	against	the	Firm (including	various	subsidiaries)	and	other	industry	members	in	connection	with its	ongoing	investigation	into	the	credit	default	swaps	("CDS")	marketplace.	The EC	asserted	that	between	2006	and	2009,	a	number	of	investment	banks	acted collectively	through	the	International	Swaps	and	Derivatives	Association ("ISDA")	and	Markit	Group	Limited	("Markit")	to	foreclose	exchanges	from	the potential	market	for	exchange-traded	credit	derivatives.	In	December	2015,	the EC	announced	the	closure	of	its	investigation	as	to	the	Firm	and	other investment	banks.

Separately,	the	Firm	and	other	defendants	have	entered	separate	agreements	to settle	a	consolidated	putative	class	action	filed	in	the	United	States	District	Court for	the	Southern	District	of	New	York	on	behalf	of	purchasers	and	sellers	of CDS.	The	complaint	in	this	action	had	alleged	that	the	defendant	investment banks	and	dealers,	including	the	Firm,	as	well	as	Markit	and/or	ISDA, collectively	prevented	new	entrants	into	the	market	for	exchange-traded	CDS products.	These	settlements	are	subject	to	Court	approval.

Custody	Assets	Investigation.	The	U.K.	Financial	Conduct	Authority	("FCA") has	closed	its	previously-reported	investigation	concerning	compliance	by JPMorgan	Chase	Bank,	N.A.,	London	branch	and	J.P.	Morgan	Europe	Limited with	the	FCA's	rules	regarding	the	provision	of	custody	services	relating	to	the administration	of	client	assets.

Foreign	Exchange	Investigations	and	Litigation.	The	Firm	previously	reported settlements	with	certain	government	authorities	relating	to	its	foreign	exchange ("FX")	sales	and	trading	activities	and	controls	related	to	those	activities.	FX- related	investigations	and	inquiries	by	other,	non-U.S.	government	authorities, including	competition	authorities,	remain	ongoing,	and	the	Firm	is	cooperating with	those	matters.

The	Firm	is	also	one	of	a	number	of	foreign	exchange	dealers	defending	a	class action	filed	in	the	United	States	District	Court	for	the	Southern	District	of	New York	by	U.S.-based	plaintiffs,	principally	alleging	violations	of	federal	antitrust laws	based	on	an	alleged	conspiracy	to	manipulate	foreign	exchange	rates	(the "U.S.	class	action").	In	January	2015,	the	Firm	entered	into	a	settlement agreement	in	the	U.S.	class	action.	Following	this	settlement,	a	number	of additional	putative	class	actions	were	filed	seeking	damages	for	persons	who transacted	FX	futures	and	options	on	futures	(the	"exchanged-based	actions"), consumers	who	purchased	foreign	currencies	at	allegedly	inflated	rates	(the "consumer	actions"),	and	participants	or	beneficiaries	of	qualified	ERISA	plans (the	"ERISA	actions").	In	July	2015,	the	plaintiffs	in	the	U.S.	class	action	filed an	amended	complaint,	and	the	Court	consolidated	the	exchange-based

actions	into	the	U.S.	class	action.	The	Firm	has	entered	into	a	revised	settlement agreement	to	resolve	the	consolidated	U.S.	class	action,	including	the	exchange- based	actions,	and	that	agreement	is	subject	to	Court	approval.	The	consumer actions	and	ERISA	actions	remain	pending.

In	September	2015,	two	class	actions	were	filed	in	Canada	against	the	Firm	as well	as	a	number	of	other	FX	dealers,	principally	for	alleged	violations	of	the Canadian	Competition	Act	based	on	an	alleged	conspiracy	to	fix	the	prices	of currency	purchased	in	the	FX	market.	The	first	action	was	filed	in	the	province	of Ontario,	and	seeks	to	represent	all	persons	in	Canada	who	transacted	any	FX instrument.	The	second	action	seeks	to	represent	only	those	persons	in	Quebec who	engaged	in	FX	transactions.

General	Motors	Litigation.	JPMorgan	Chase	Bank,	N.A.	participated	in,	and	was the	Administrative	Agent	on	behalf	of	a	syndicate	of	lenders	on,	a	$1.5	billion syndicated	Term	Loan	facility	("Term	Loan")	for	General	Motors	Corporation ("GM").	In	July	2009,	in	connection	with	the	GM	bankruptcy	proceedings,	the Official	Committee	of	Unsecured	Creditors	of	Motors	Liquidation	Company ("Creditors	Committee")	filed	a	lawsuit	against	JPMorgan	Chase	Bank,	N.A.,	in its	individual	capacity	and	as	Administrative	Agent	for	other	lenders	on	the	Term Loan,	seeking	to	hold	the	underlying	lien	invalid	based	on	the	filing	of	a	UCC-3 termination	statement	relating	to	the	Term	Loan.	In	March	2013,	the	Bankruptcy Court	granted	JPMorgan	Chase	Bank,	N.A.'s	motion	for	summary	judgment	and dismissed	the	Creditors	Committee's	complaint	on	the	grounds	that	JPMorgan Chase	Bank,	N.A.	did	not	authorize	the	filing	of	the	UCC-3	termination statement	at	issue.	The	Creditors	Committee	appealed	the	Bankruptcy	Court's dismissal	of	its	claim	to	the	United	States	Court	of	Appeals	for	the	Second Circuit.	In	January	2015,	the	Court	of	Appeals	reversed	the	Bankruptcy	Court's dismissal	of	the	Creditors	Committee's	claim	and	remanded	the	case	to	the Bankruptcy	Court	with	instructions	to	enter	partial	summary	judgment	for	the Creditors	Committee	as	to	the	termination	statement.	The	proceedings	in	the Bankruptcy	Court	continue	with	respect	to,	among	other	things,	additional defenses	asserted	by	JPMorgan	Chase	Bank,	N.A.	and	the	value	of	additional collateral	on	the	Term	Loan	that	was	unaffected	by	the	filing	of	the	termination statement	at	issue.	In	addition,	certain	Term	Loan	lenders	filed	cross-claims against	JPMorgan	Chase	Bank,	N.A.	in	the	Bankruptcy	Court	seeking indemnification	and	asserting	various	claims.

Interchange	Litigation.	A	group	of	merchants	and	retail	associations	filed	a series	of	class	action	complaints	alleging	that	Visa	and	MasterCard,	as	well	as certain	banks,	conspired	to	set	the	price	of	credit	and	debit	card	interchange	fees, enacted	respective	rules	in	violation	of	antitrust	laws,	and	engaged	in tying/bundling	and	exclusive	dealing.	The	parties	have	entered	into	an	agreement to	settle	the	cases	for	a	cash	payment	of	$6.1	billion	to	the	class	plaintiffs	(of which	the	Firm's	share	is	approximately	20%)	and	an	amount	equal	to	ten	basis points	of	credit	card	interchange	for	a	period	of	eight	months	to	be

measured	from	a	date	within	60	days	of	the	end	of	the	opt-out	period.	The agreement	also	provides	for	modifications	to	each	credit	card	network's	rules, including	those	that	prohibit	surcharging	credit	card	transactions.	In	December 2013,	the	Court	issued	a	decision	granting	final	approval	of	the	settlement.	A number	of	merchants	appealed,	and	oral	argument	was	held	in	September	2015. Certain	merchants	and	trade	associations	have	also	filed	a	motion	with	the District	Court	seeking	to	set	aside	the	approval	of	the	class	settlement	on	the basis	of	alleged	improper	communications	between	one	of	MasterCard's	former outside	counsel	and	one	of	plaintiffs'	outside	counsel.	That	motion	remains pending.	Certain	merchants	that	opted	out	of	the	class	settlement	have	filed actions	against	Visa	and	MasterCard,	as	well	as	against	the	Firm	and	other banks.	Defendants'	motion	to	dismiss	those	actions	was	denied	in	July	2014.

Investment	Management	Litigation.	The	Firm	is	defending	two	pending	cases that	are	being	coordinated	for	pre-trial	purposes,	alleging	that	investment portfolios	managed	by	J.P.	Morgan	Investment	Management	("JPMIM")	were inappropriately	invested	in	securities	backed	by	residential	real	estate	collateral. Plaintiffs	Assured	Guaranty	(U.K.)	and	Ambac	Assurance	UK	Limited	claim that	JPMIM	is	liable	for	total	losses	of	more	than	$1	billion	in	market	value	of these	securities.	Discovery	has	been	completed.	In	January	2016,	plaintiffs	filed a	joint	partial	motion	for	summary	judgment	in	the	coordinated	actions.

# Lehman	Brothers	Bankruptcy	Proceedings.	In	May	2010,	Lehman	Brothers

Holdings	Inc.	("LBHI")	and	its	Official	Committee	of	Unsecured	Creditors	(the "Committee")	filed	a	complaint	(and	later	an	amended	complaint)	against JPMorgan	Chase	Bank,	N.A.	in	the	United	States	Bankruptcy	Court	for	the Southern	District	of	New	York	that	asserted	both	federal	bankruptcy	law	and state	common	law	claims,	and	sought,	among	other	relief,	to	recover	$7.9	billion in	collateral	(after	deducting	$700	million	of	returned	collateral)	that	was transferred	to	JPMorgan	Chase	Bank,	N.A.	in	the	weeks	preceding	LBHI's bankruptcy.	The	amended	complaint	also	sought	unspecified	damages	on	the grounds	that	JPMorgan	Chase	Bank,	N.A.'s	collateral	requests	hastened	LBHI's bankruptcy.	The	Bankruptcy	Court	dismissed	the	claims	in	the	amended complaint	that	sought	to	void	the	allegedly	constructively	fraudulent	and preferential	transfers	made	to	the	Firm	during	September	2008,	but	did	not dismiss	the	other	claims,	including	claims	for	duress	and	fraud.	The	Firm	filed counterclaims	against	LBHI,	including	alleging	that	LBHI	fraudulently	induced the	Firm	to	make	large	extensions	of	credit	against	inappropriate	collateral	in connection	with	the	Firm's	role	as	the	clearing	bank	for	Lehman	Brothers	Inc. ("LBI"),	LBHI's	broker-dealer	subsidiary.	These	extensions	of	credit	left	the Firm	with	more	than	$25	billion	in	claims	against	the	estate	of	LBI,	which	was repaid	principally	through	collateral	posted	by	LBHI	and	LBI.	In	September 2015,	the	District	Court,	to	which	the	case	had	been	transferred	from	the Bankruptcy	Court,	granted	summary	judgment	in	favor

of	JPMorgan	Chase	Bank,	N.A.	on	most	of	the	claims	against	it	that	the Bankruptcy	Court	had	not	previously	dismissed,	including	the	claims	for	duress and	fraud.	The	District	Court	also	denied	LBHI's	motion	for	summary	judgment on	certain	of	its	claims	and	for	dismissal	of	the	Firm's	counterclaims.	The	claims that	remained	following	the	District	Court's	ruling	challenged	the	propriety	of the	Firm's	post-petition	payment,	from	collateral	posted	by	LBHI,	of approximately	$1.9	billion	of	derivatives,	repo	and	securities	lending	claims.

In	the	Bankruptcy	Court	proceedings,	LBHI	and	several	of	its	subsidiaries	that had	been	Chapter	11	debtors	had	filed	a	separate	complaint	and	objection	to derivatives	claims	asserted	by	the	Firm	alleging	that	the	amount	of	the derivatives	claims	had	been	overstated	and	challenging	certain	set-offs	taken	by JPMorgan	Chase	entities	to	recover	on	the	claims.	In	January	2015,	LBHI	filed claims	objections	with	respect	to	guaranty	claims	asserted	by	the	Firm	arising from	close-outs	of	derivatives	transactions	with	LBI	and	one	of	its	affiliates,	and a	claim	objection	with	respect	to	derivatives	close-out	claims	acquired	by	the Firm	in	the	Washington	Mutual	transaction.

In	January	2016,	the	parties	reached	an	agreement,	approved	by	the	Bankruptcy Court,	under	which	the	Firm	will	pay	$1.42	billion	to	settle	all	of	the	claims, counterclaims	and	claims	objections,	including	all	appeal	rights,	except	for	the claims	specified	in	the	following	paragraph.	One	pro	se	objector	is	seeking	to appeal	the	settlement.

The	settlement	did	not	resolve	the	following	remaining	matters:	In	the Bankruptcy	Court	proceedings,	LBHI	and	the	Committee	filed	an	objection	to the	claims	asserted	by	JPMorgan	Chase	Bank,	N.A.	against	LBHI	with	respect	to clearing	advances	made	to	LBI,	principally	on	the	grounds	that	the	Firm	had	not conducted	the	sale	of	the	securities	collateral	held	for	its	claims	in	a commercially	reasonable	manner.	In	January	2015,	LBHI	brought	two	claims objections	relating	to	securities	lending	claims	and	a	group	of	other	smaller claims.	Discovery	with	respect	to	these	objections	is	ongoing.

LIBOR	and	Other	Benchmark	Rate	Investigations	and	Litigation.	JPMorgan Chase	has	received	subpoenas	and	requests	for	documents	and,	in	some	cases, interviews,	from	federal	and	state	agencies	and	entities,	including	the	DOJ,	the U.S.	Commodity	Futures	Trading	Commission	("CFTC"),	the	U.S.	Securities	and Exchange	Commission	("SEC")	and	various	state	attorneys	general,	as	well	as the	EC,	the	FCA,	the	Canadian	Competition	Bureau,	the	Swiss	Competition Commission	and	other	regulatory	authorities	and	banking	associations	around the	world	relating	primarily	to	the	process	by	which	interest	rates	were	submitted to	the	British	Bankers	Association	("BBA")	in	connection	with	the	setting	of	the BBA's	London	Interbank	Offered	Rate	("LIBOR")	for	various	currencies, principally	in	2007	and	2008.	Some	of	the	inquiries	also	relate	to	similar processes	by	which	information	on	rates	is	submitted	to	the

European	Banking	Federation	("EBF")	in	connection	with	the	setting	of	the EBF's	Euro	Interbank	Offered	Rates	("EURIBOR")	and	to	the	Japanese Bankers'	Association	for	the	setting	of	Tokyo	Interbank	Offered	Rates ("TIBOR"),	as	well	as	processes	for	the	setting	of	U.S.	dollar	ISDAFIX	rates	and other	reference	rates	in	various	parts	of	the	world	during	similar	time	periods. The	Firm	is	responding	to	and	continuing	to	cooperate	with	these	inquiries.	As previously	reported,	the	Firm	has	resolved	EC	inquiries	relating	to	Yen	LIBOR and	Swiss	Franc	LIBOR.	In	May	2014,	the	EC	issued	a	Statement	of	Objections outlining	its	case	against	the	Firm	(and	others)	as	to	EURIBOR,	to	which	the Firm	has	filed	a	response	and	made	oral	representations.	Other	inquiries	have been	discontinued	without	any	action	against	JPMorgan	Chase,	including	by	the FCA	and	the	Canadian	Competition	Bureau.

In	addition,	the	Firm	has	been	named	as	a	defendant	along	with	other	banks	in	a series	of	individual	and	putative	class	actions	filed	in	various	United	States District	Courts,	in	which	plaintiffs	make	varying	allegations	that	in	various periods,	starting	in	2000	or	later,	defendants	either	individually	or	collectively manipulated	the	U.S.	dollar	LIBOR,	Yen	LIBOR,	Swiss	franc	LIBOR,	Euroyen TIBOR	and/or	EURIBOR	rates	by	submitting	rates	that	were	artificially	low	or high.	Plaintiffs	allege	that	they	transacted	in	loans,	derivatives	or	other	financial instruments	whose	values	are	affected	by	changes	in	U.S.	dollar	LIBOR,	Yen LIBOR,	Swiss	franc	LIBOR,	Euroyen	TIBOR	or	EURIBOR	and	assert	a	variety of	claims	including	antitrust	claims	seeking	treble	damages.	These	matters	are	in various	stages	of	litigation.

The	U.S.	dollar	LIBOR-related	putative	class	actions	and	most	U.S.	dollar LIBOR-related	individual	actions	were	consolidated	for	pre-trial	purposes	in	the United	States	District	Court	for	the	Southern	District	of	New	York.	The	Court dismissed	certain	claims,	including	the	antitrust	claims,	and	permitted	other claims	under	the	Commodity	Exchange	Act	and	common	law	to	proceed.	Certain plaintiffs	appealed	the	dismissal	of	the	antitrust	claims,	and	the	United	States Court	of	Appeals	for	the	Second	Circuit	dismissed	the	appeal	for	lack	of jurisdiction.	In	January	2015,	the	United	States	Supreme	Court	reversed	the decision	of	the	Court	of	Appeals,	holding	that	plaintiffs	have	the	jurisdictional right	to	appeal,	and	remanded	the	case	to	the	Court	of	Appeals	for	further proceedings.	The	Court	of	Appeals	heard	oral	argument	on	remand	in	November 2015.

The	Firm	is	one	of	the	defendants	in	a	number	of	putative	class	actions	alleging that	defendant	banks	and	ICAP	conspired	to	manipulate	the	U.S.	dollar	ISDAFIX rates.	Plaintiffs	primarily	assert	claims	under	the	federal	antitrust	laws	and Commodities	Exchange	Act.

Madoff	Litigation.	Various	subsidiaries	of	the	Firm,	including	J.P.	Morgan Securities	plc,	have	been	named	as	defendants	in	lawsuits	filed	in	Bankruptcy Court	in	New	York	arising	out	of	the	liquidation	proceedings	of	Fairfield	Sentry Limited	and	Fairfield	Sigma	Limited,	so-called	Madoff	feeder	funds.

These	actions	seek	to	recover	payments	made	by	the	funds	to	defendants	totaling approximately	$155	million.	All	but	two	of	these	actions	have	been	dismissed.

In	addition,	a	putative	class	action	was	brought	by	investors	in	certain	feeder funds	against	JPMorgan	Chase	in	the	United	States	District	Court	for	the Southern	District	of	New	York,	as	was	a	motion	by	separate	potential	class plaintiffs	to	add	claims	against	the	Firm	and	certain	subsidiaries	to	an	already pending	putative	class	action	in	the	same	court.	The	allegations	in	these complaints	largely	track	those	previously	raised	--	and	resolved	as	to	the	Firm	-- by	the	court-appointed	trustee	for	Bernard	L.	Madoff	Investment	Securities	LLC. The	District	Court	dismissed	these	complaints	and	the	United	States	Court	of Appeals	for	the	Second	Circuit	affirmed	the	District	Court's	decision.	The United	States	Supreme	Court	denied	plaintiffs'	petition	for	a	writ	of	certiorari	in March	2015.	Plaintiffs	subsequently	served	a	motion	in	the	Court	of	Appeals seeking	to	have	the	Court	reconsider	its	prior	decision	in	light	of	another	recent appellate	decision.	That	motion	was	denied	in	June	2015.

The	Firm	is	a	defendant	in	five	other	Madoff-related	individual	investor	actions pending	in	New	York	state	court.	The	allegations	in	all	of	these	actions	are essentially	identical,	and	involve	claims	against	the	Firm	for,	among	other things,	aiding	and	abetting	breach	of	fiduciary	duty,	conversion	and	unjust enrichment.	In	August	2014,	the	Court	dismissed	all	claims	against	the	Firm.	In January	2016,	the	Appellate	Court	affirmed	the	dismissal.

A	putative	class	action	was	filed	in	the	United	States	District	Court	for	the District	of	New	Jersey	by	investors	who	were	net	winners	(i.e.,	Madoff customers	who	had	taken	more	money	out	of	their	accounts	than	had	been invested)	in	Madoff's	Ponzi	scheme	and	were	not	included	in	a	prior	class	action settlement.	These	plaintiffs	allege	violations	of	the	federal	securities	law,	federal and	state	racketeering	statutes	and	multiple	common	law	and	statutory	claims including	breach	of	trust,	aiding	and	abetting	embezzlement,	unjust	enrichment, conversion	and	commercial	bad	faith.	A	similar	action	was	filed	in	the	United States	District	Court	for	the	Middle	District	of	Florida,	although	it	was	not	styled as	a	class	action,	and	included	claims	pursuant	to	Florida	statutes.	The	Firm moved	to	transfer	both	the	Florida	and	New	Jersey	actions	to	the	United	States District	Court	for	the	Southern	District	of	New	York.	The	Florida	court	denied the	transfer	motion,	but	subsequently	granted	the	Firm's	motion	to	dismiss	the case	in	September	2015.	Plaintiffs	have	filed	a	notice	of	appeal,	which	is pending.	In	addition,	the	same	plaintiffs	have	re-filed	their	dismissed	state	claims in	Florida	state	court.	The	New	Jersey	court	granted	the	transfer	motion	to	the Southern	District	of	New	York,	and	the	Firm	has	moved	to	dismiss	the	case pending	in	New	York.

Three	shareholder	derivative	actions	have	also	been	filed	in	New	York	federal and	state	court	against	the	Firm,	as	nominal	defendant,	and	certain	of	its	current and	former	Board	members,	alleging	breach	of	fiduciary	duty	in

connection	with	the	Firm's	relationship	with	Bernard	Madoff	and	the	alleged failure	to	maintain	effective	internal	controls	to	detect	fraudulent	transactions. The	actions	seek	declaratory	relief	and	damages.	All	three	actions	have	been dismissed.	The	plaintiff	in	one	action	did	not	appeal,	the	dismissal	has	been affirmed	on	appeal	in	another	action,	and	one	appeal	remains	pending.

# Mortgage-Backed	Securities	and	Repurchase	Litigation	and	Related	Regulatory

Investigations.	The	Firm	and	affiliates	(together,	"JPMC"),	Bear	Stearns	and affiliates	(together,	"Bear	Stearns")	and	certain	Washington	Mutual	affiliates (together,	"Washington	Mutual")	have	been	named	as	defendants	in	a	number	of cases	in	their	various	roles	in	offerings	of	mortgage-backed	securities	("MBS"). These	cases	include	actions	by	individual	MBS	purchasers	and	actions	by monoline	insurance	companies	that	guaranteed	payments	of	principal	and	interest for	particular	tranches	of	MBS	offerings.	Following	the	settlements	referred	to below,	there	are	currently	pending	and	tolled	investor	claims	involving	MBS with	an	original	principal	balance	of	approximately	$4.2	billion,	of	which	$2.6 billion	involves	JPMC,	Bear	Stearns	or	Washington	Mutual	as	issuer	and	$1.6 billion	involves	JPMC,	Bear	Stearns	or	Washington	Mutual	solely	as underwriter.	The	Firm	and	certain	of	its	current	and	former	officers	and	Board members	have	also	been	sued	in	shareholder	derivative	actions	relating	to	the Firm's	MBS	activities,	and	trustees	have	asserted	or	have	threatened	to	assert claims	that	loans	in	securitization	trusts	should	be	repurchased.

Issuer	Litigation	–	Class	Actions.	JPMC	has	fully	resolved	all	pending	putative class	actions	on	behalf	of	purchasers	of	MBS.

Issuer	Litigation	–	Individual	Purchaser	Actions.	The	Firm	is	defending individual	actions	brought	against	JPMC,	Bear	Stearns	and	Washington	Mutual as	MBS	issuers	(and,	in	some	cases,	also	as	underwriters	of	their	own	MBS offerings).	The	Firm	has	settled	a	number	of	these	actions.	Several	actions remain	pending	in	federal	and	state	courts	across	the	U.S.	and	are	in	various stages	of	litigation.

Monoline	Insurer	Litigation.	The	Firm	has	settled	two	pending	actions	relating	to a	monoline	insurer's	guarantees	of	principal	and	interest	on	certain	classes	of	11 different	Bear	Stearns	MBS	offerings.	This	settlement	fully	resolves	all	pending actions	by	monoline	insurers	against	the	Firm	relating	to	RMBS	issued	and/or sponsored	by	the	Firm.

Underwriter	Actions.	In	actions	against	the	Firm	involving	offerings	where	the Firm	was	solely	an	underwriter	of	other	issuers'	MBS	offerings,	the	Firm	has contractual	rights	to	indemnification	from	the	issuers.	However,	those	indemnity rights	may	prove	effectively	unenforceable	in	various	situations,	such	as	where the	issuers	are	now	defunct.	Currently	there	is	one	such	action	pending	against the	Firm	relating	to	a	single	offering	of	another	issuer.

Repurchase	Litigation.	The	Firm	is	defending	a	number	of	actions	brought	by trustees,	securities	administrators	or

master	servicers	of	various	MBS	trusts	on	behalf	of	purchasers	of	securities issued	by	those	trusts.	These	cases	generally	allege	breaches	of	various representations	and	warranties	regarding	securitized	loans	and	seek	repurchase of	those	loans	or	equivalent	monetary	relief,	as	well	as	indemnification	of attorneys'	fees	and	costs	and	other	remedies.	Deutsche	Bank	National	Trust Company,	acting	as	trustee	for	various	MBS	trusts,	has	filed	such	a	suit	against JPMorgan	Chase	Bank,	N.A.	and	the	Federal	Deposit	Insurance	Corporation	(the "FDIC")	in	connection	with	a	significant	number	of	MBS	issued	by	Washington Mutual;	that	case	is	described	in	the	Washington	Mutual	Litigations	section below.	Other	repurchase	actions,	each	specific	to	one	or	more	MBS	transactions issued	by	JPMC	and/or	Bear	Stearns,	are	in	various	stages	of	litigation.

In	addition,	the	Firm	and	a	group	of	21	institutional	MBS	investors	made	a binding	offer	to	the	trustees	of	MBS	issued	by	JPMC	and	Bear	Stearns	providing for	the	payment	of	$4.5	billion	and	the	implementation	of	certain	servicing changes	by	JPMC,	to	resolve	all	repurchase	and	servicing	claims	that	have	been asserted	or	could	have	been	asserted	with	respect	to	330	MBS	trusts	created between	2005	and	2008.	The	offer	does	not	resolve	claims	relating	to Washington	Mutual	MBS.	The	trustees	(or	separate	and	successor	trustees)	for this	group	of	330	trusts	have	accepted	the	settlement	for	319	trusts	in	whole	or	in part	and	excluded	from	the	settlement	16	trusts	in	whole	or	in	part.	The	trustees' acceptance	is	subject	to	a	judicial	approval	proceeding	initiated	by	the	trustees and	pending	in	New	York	state	court.	The	judicial	approval	hearing	was	held	in January	2016,	and	the	parties	are	awaiting	a	decision.	An	investor	in	some	of	the trusts	for	which	the	settlement	has	been	accepted	has	intervened	in	the	judicial approval	proceeding	to	challenge	the	trustees'	allocation	of	the	settlement	among the	trusts.	Separately,	in	October	2015,	JPMC	reached	agreements	to	resolve repurchase	and	servicing	claims	for	four	trusts	among	the	16	that	were	previously excluded	from	the	trustee	settlement.	In	December	2015,	the	court	approved	the trustees'	decision	to	accept	these	separate	settlements.	The	trustees	are	seeking	to obtain	certain	remaining	approvals	necessary	to	effectuate	these	settlements.

Additional	actions	have	been	filed	against	third-party	trustees	that	relate	to	loan repurchase	and	servicing	claims	involving	trusts	sponsored	by	JPMC,	Bear Stearns	and	Washington	Mutual.

Derivative	Actions.	Shareholder	derivative	actions	relating	to	the	Firm's	MBS activities	have	been	filed	against	the	Firm,	as	nominal	defendant,	and	certain	of its	current	and	former	officers	and	members	of	its	Board	of	Directors,	in	New York	state	court	and	California	federal	court.	Two	of	the	New	York	actions	have been	dismissed,	one	of	which	is	on	appeal.	A	consolidated	action	in	California federal	court	has	been	dismissed	without	prejudice	for	lack	of	personal jurisdiction	and	plaintiffs	are	pursuing	discovery	relating	to	jurisdiction.

Government	Enforcement	Investigations	and	Litigation.	The	Firm	is	responding to	an	ongoing	investigation	being	conducted	by	the	DOJ's	Criminal	Division	and two	United	States	Attorney's	Offices	relating	to	MBS	offerings	securitized	and sold	by	the	Firm	and	its	subsidiaries.	The	Firm	has	also	received	subpoenas	and informal	requests	for	information	from	state	authorities	concerning	the	issuance and	underwriting	of	MBS-related	matters.	The	Firm	continues	to	respond	to	these MBS-related	regulatory	inquiries.

In	addition,	the	Firm	continues	to	cooperate	with	investigations	by	the	DOJ, including	the	United	States	Attorney's	Office	for	the	District	of	Connecticut,	and by	the	SEC	Division	of	Enforcement	and	the	Office	of	the	Special	Inspector General	for	the	Troubled	Asset	Relief	Program,	all	of	which	relate	to,	among other	matters,	communications	with	counterparties	in	connection	with	certain secondary	market	trading	in	residential	and	commercial	MBS.

The	Firm	has	entered	into	agreements	with	a	number	of	entities	that	purchased MBS	that	toll	applicable	limitations	periods	with	respect	to	their	claims,	and	has settled,	and	in	the	future	may	settle,	tolled	claims.	There	is	no	assurance	that	the Firm	will	not	be	named	as	a	defendant	in	additional	MBS-related	litigation.

Mortgage-Related	Investigations	and	Litigation.	One	shareholder	derivative action	has	been	filed	in	New	York	Supreme	Court	against	the	Firm's	Board	of Directors	alleging	that	the	Board	failed	to	exercise	adequate	oversight	as	to wrongful	conduct	by	the	Firm	regarding	mortgage	servicing.	In	December	2014, the	court	granted	defendants'	motion	to	dismiss	the	complaint	and	in	January 2016,	the	dismissal	was	affirmed	on	appeal.

The	Civil	Division	of	the	United	States	Attorney's	Office	for	the	Southern District	of	New	York	is	conducting	an	investigation	concerning	the	Firm's compliance	with	the	Fair	Housing	Act	and	Equal	Credit	Opportunity	Act	in connection	with	its	mortgage	lending	practices.	In	addition,	three	municipalities have	commenced	litigation	against	the	Firm	alleging	violations	of	an	unfair competition	law	or	the	Fair	Housing	Act.	The	municipalities	seek,	among	other things,	civil	penalties	for	the	unfair	competition	claim,	and,	for	the	Fair	Housing Act	claims,	damages	resulting	from	lost	tax	revenue	and	increased	municipal costs	associated	with	foreclosed	properties.	Two	of	the	municipal	actions	are stayed,	and	a	motion	to	dismiss	is	pending	in	the	remaining	action.

In	March	2015,	JPMorgan	Chase	Bank,	N.A	entered	into	a	settlement	agreement with	the	Executive	Office	for	United	States	Bankruptcy	Trustees	and	the	United States	Trustee	Program	(collectively,	the	"Bankruptcy	Trustee")	to	resolve	issues relating	to	mortgage	payment	change	notices	and	escrow	statements	in bankruptcy	proceedings.	In	January	2016,	the	OCC	determined	that,	among other	things,	the	mortgage	payment	change	notices	issues	that	were	the	subject	of the	settlement	with	the	Bankruptcy	Trustee	violated	the	2011	mortgage servicing-related	consent	order

entered	into	by	JPMorgan	Chase	Bank,	N.A.	and	the	OCC	(as	amended	in	2013 and	2015),	and	assessed	a	$48	million	civil	money	penalty.	The	OCC concurrently	terminated	that	consent	order.

Municipal	Derivatives	Litigation.	Several	civil	actions	were	commenced	in	New York	and	Alabama	courts	against	the	Firm	relating	to	certain	Jefferson	County, Alabama	(the	"County")	warrant	underwritings	and	swap	transactions.	The claims	in	the	civil	actions	generally	alleged	that	the	Firm	made	payments	to certain	third	parties	in	exchange	for	being	chosen	to	underwrite	more	than	$3 billion	in	warrants	issued	by	the	County	and	to	act	as	the	counterparty	for	certain swaps	executed	by	the	County.	The	County	filed	for	bankruptcy	in	November 2011.	In	June	2013,	the	County	filed	a	Chapter	9	Plan	of	Adjustment,	as amended	(the	"Plan	of	Adjustment"),	which	provided	that	all	the	above- described	actions	against	the	Firm	would	be	released	and	dismissed	with prejudice.	In	November	2013,	the	Bankruptcy	Court	confirmed	the	Plan	of Adjustment,	and	in	December	2013,	certain	sewer	rate	payers	filed	an	appeal challenging	the	confirmation	of	the	Plan	of	Adjustment.	All	conditions	to	the Plan	of	Adjustment's	effectiveness,	including	the	dismissal	of	the	actions	against the	Firm,	were	satisfied	or	waived	and	the	transactions	contemplated	by	the	Plan of	Adjustment	occurred	in	December	2013.	Accordingly,	all	the	above-described actions	against	the	Firm	have	been	dismissed	pursuant	to	the	terms	of	the	Plan	of Adjustment.	The	appeal	of	the	Bankruptcy	Court's	order	confirming	the	Plan	of Adjustment	remains	pending.

Petters	Bankruptcy	and	Related	Matters.	JPMorgan	Chase	and	certain	of	its affiliates,	including	One	Equity	Partners	("OEP"),	have	been	named	as defendants	in	several	actions	filed	in	connection	with	the	receivership	and bankruptcy	proceedings	pertaining	to	Thomas	J.	Petters	and	certain	affiliated entities	(collectively,	"Petters")	and	the	Polaroid	Corporation.	The	principal actions	against	JPMorgan	Chase	and	its	affiliates	have	been	brought	by	a	court- appointed	receiver	for	Petters	and	the	trustees	in	bankruptcy	proceedings	for three	Petters	entities.	These	actions	generally	seek	to	avoid	certain	putative transfers	in	connection	with	(i)	the	2005	acquisition	by	Petters	of	Polaroid,	which at	the	time	was	majority-owned	by	OEP;	(ii)	two	credit	facilities	that	JPMorgan Chase	and	other	financial	institutions	entered	into	with	Polaroid;	and	(iii)	a	credit line	and	investment	accounts	held	by	Petters.	The	actions	collectively	seek recovery	of	approximately	$450	million.	Defendants	have	moved	to	dismiss	the complaints	in	the	actions	filed	by	the	Petters	bankruptcy	trustees.

# Proprietary	Products	Investigations	and	Litigation.	In	December	2015,

JPMorgan	Chase	Bank,	N.A.	and	J.P.	Morgan	Securities	LLC	agreed	to	a settlement	with	the	SEC,	and	JPMorgan	Chase	Bank,	N.A.	agreed	to	a	settlement with	the	CFTC,	regarding	disclosures	to	clients	concerning	conflicts	associated with	the	Firm's	sale	and	use	of	proprietary	products,	such	as	J.P.	Morgan	mutual funds,	in	the	Firm's	wealth	management	businesses,	and	the	U.S.

Private	Bank's	disclosures	concerning	the	use	of	hedge	funds	that	pay	placement agent	fees	to	JPMorgan	Chase	broker-dealer	affiliates.	As	part	of	the	settlements, JPMorgan	Chase	Bank,	N.A.	and	J.P.	Morgan	Securities	LLC	paid	penalties, disgorgement	and	interest	totaling	approximately	$307	million.	The	Firm continues	to	cooperate	with	inquiries	from	other	government	authorities concerning	disclosure	of	conflicts	associated	with	the	Firm's	sale	and	use	of proprietary	products.	A	putative	class	action	filed	in	the	United	States	District Court	for	the	Northern	District	of	Illinois	on	behalf	of	financial	advisory	clients from	2007	to	the	present	whose	funds	were	invested	in	proprietary	funds	and who	were	charged	investment	management	fees,	was	dismissed	by	the	Court. Plaintiffs'	appeal	of	the	dismissal	is	pending.

Referral	Hiring	Practices	Investigations.	Various	regulators	are	investigating, among	other	things,	the	Firm's	compliance	with	the	Foreign	Corrupt	Practices Act	and	other	laws	with	respect	to	the	Firm's	hiring	practices	related	to candidates	referred	by	clients,	potential	clients	and	government	officials,	and	its engagement	of	consultants	in	the	Asia	Pacific	region.	The	Firm	is	responding	to and	cooperating	with	these	investigations.

Washington	Mutual	Litigations.	Proceedings	related	to	Washington	Mutual's failure	are	pending	before	the	United	States	District	Court	for	the	District	of Columbia	and	include	a	lawsuit	brought	by	Deutsche	Bank	National	Trust Company,	initially	against	the	FDIC	and	amended	to	include	JPMorgan	Chase Bank,	N.A.	as	a	defendant,	asserting	an	estimated	$6	billion	to	$10	billion	in damages	based	upon	alleged	breaches	of	certain	representations	and	warranties given	by	certain	Washington	Mutual	affiliates	in	connection	with	mortgage securitization	agreements.	The	case	includes	assertions	that	JPMorgan	Chase Bank,	N.A.	may	have	assumed	liabilities	for	the	alleged	breaches	of representations	and	warranties	in	the	mortgage	securitization	agreements.	In	June 2015,	the	court	ruled	in	favor	of	JPMorgan	Chase	Bank,	N.A.	on	the	question	of whether	the	Firm	or	the	FDIC	bears	responsibility	for	Washington	Mutual Bank's	repurchase	obligations,	holding	that	JPMorgan	Chase	Bank,	N.A. assumed	only	those	liabilities	that	were	reflected	on	Washington	Mutual	Bank's financial	accounting	records	as	of	September	25,	2008,	and	only	up	to	the amount	of	the	book	value	reflected	therein.	The	FDIC	is	appealing	that	ruling and	the	case	has	otherwise	been	stayed	pending	the	outcome	of	that	appeal.

Certain	holders	of	Washington	Mutual	Bank	debt	filed	an	action	against JPMorgan	Chase	which	alleged	that	by	acquiring	substantially	all	of	the	assets	of Washington	Mutual	Bank	from	the	FDIC,	JPMorgan	Chase	Bank,	N.A.	caused Washington	Mutual	Bank	to	default	on	its	bond	obligations.	JPMorgan	Chase and	the	FDIC	moved	to	dismiss	this	action	and	the	District	Court	dismissed	the case	except	as	to	the	plaintiffs'	claim	that	JPMorgan	Chase	tortiously	interfered with	the	plaintiffs'	bond	contracts	with	Washington	Mutual	Bank	prior	to	its closure.	The	action	has

been	stayed	pending	a	decision	on	JPMorgan	Chase's	motion	to	dismiss	the plaintiffs'	remaining	claim.

JPMorgan	Chase	has	also	filed	complaints	in	the	United	States	District	Court	for the	District	of	Columbia	against	the	FDIC,	in	its	corporate	capacity	as	well	as	in its	capacity	as	receiver	for	Washington	Mutual	Bank,	asserting	multiple	claims for	indemnification	under	the	terms	of	the	Purchase	&	Assumption	Agreement between	JPMorgan	Chase	and	the	FDIC	relating	to	JPMorgan	Chase's	purchase of	most	of	the	assets	and	certain	liabilities	of	Washington	Mutual	Bank.

Wendel.	Since	2012,	the	French	criminal	authorities	have	been	investigating	a series	of	transactions	entered	into	by	senior	managers	of	Wendel	Investissement ("Wendel")	during	the	period	from	2004	through	2007	to	restructure	their shareholdings	in	Wendel.	JPMorgan	Chase	Bank,	N.A.,	Paris	branch	provided financing	for	the	transactions	to	a	number	of	managers	of	Wendel	in	2007.	In April	2015,	JPMorgan	Chase	Bank,	N.A.	was	notified	that	the	authorities	were formally	investigating	the	role	of	its	Paris	branch	in	the	transactions,	including alleged	criminal	tax	abuse.	JPMorgan	Chase	is	responding	to	and	cooperating with	the	investigation.	In	addition,	civil	proceedings	have	been	commenced against	JPMorgan	Chase	Bank,	N.A.	by	a	number	of	the	managers.	The	claims are	separate,	involve	different	allegations	and	are	at	various	stages	of proceedings.

In	addition	to	the	various	legal	proceedings	discussed	above,	JPMorgan	Chase and	its	subsidiaries	are	named	as	defendants	or	are	otherwise	involved	in	a substantial	number	of	other	legal	proceedings	and	inquiries.	The	Firm	believes	it has	meritorious	defenses	to	the	claims	asserted	against	it	in	its	currently outstanding	legal	proceedings	and	inquiries,	and	it	intends	to	defend	itself vigorously	in	all	such	matters.	Additional	legal	proceedings	and	inquiries	may be	initiated	from	time	to	time	in	the	future.

The	Firm	has	established	reserves	for	several	hundred	of	its	currently outstanding	legal	proceedings.	In	accordance	with	the	provisions	of	U.S.	GAAP for	contingencies,	the	Firm	accrues	for	a	litigation-related	liability	when	it	is probable	that	such	a	liability	has	been	incurred	and	the	amount	of	the	loss	can	be reasonably	estimated.	The	Firm	evaluates	its	outstanding	legal	proceedings	each quarter	to	assess	its	litigation	reserves,	and	makes	adjustments	in	such	reserves, upwards	or	downward,	as	appropriate,	based	on	management's	best	judgment after	consultation	with	counsel.	During	the	years	ended	December	31,	2015, 2014	and	2013,	the	Firm	incurred	legal	expense	of	$3.0	billion,	$2.9	billion	and $11.1	billion,	respectively.	There	is	no	assurance	that	the	Firm's	litigation reserves	will	not	need	to	be	adjusted	in	the	future.

In	view	of	the	inherent	difficulty	of	predicting	the	outcome	of	legal	proceedings, particularly	where	the	claimants	seek	very	large	or	indeterminate	damages,	or where	the	matters	present	novel	legal	theories,	involve	a	large	number	of	parties or	are	in	early	stages	of	discovery,	the	Firm	cannot	state	with	confidence	what will	be	the	eventual	outcomes	of	the	currently	pending	matters,	the	timing	of their	ultimate	resolution	or	the	eventual	losses,	fines,	penalties	or	impact	related to	those	matters.	JPMorgan	Chase	believes,	based	upon	its	current	knowledge, after	consultation	with	counsel	and	after	taking	into	account	its	current	litigation reserves,	that	the	legal	proceedings	currently	pending	against	it	should	not	have	a material	adverse	effect	on	the	Firm's	consolidated	financial	condition.	The	Firm notes,	however,	that	in	light	of	the	uncertainties	involved	in	such	proceedings, there	is	no	assurance	the	ultimate	resolution	of	these	matters	will	not significantly	exceed	the	reserves	it	has	currently	accrued;	as	a	result,	the	outcome of	a	particular	matter	may	be	material	to	JPMorgan	Chase's	operating	results	for a	particular	period,	depending	on,	among	other	factors,	the	size	of	the	loss	or liability	imposed	and	the	level	of	JPMorgan	Chase's	income	for	that	period.

# Note	32	–	International	operations

The	following	table	presents	income	statement-	and	balance	sheet-related information	for	JPMorgan	Chase	by	major	international	geographic	area.	The Firm	defines	international	activities	for	purposes	of	this	footnote	presentation	as business	transactions	that	involve	clients	residing	outside	of	the	U.S.,	and	the information	presented	below	is	based	predominantly	on	the	domicile	of	the client,	the	location	from	which	the	client	relationship	is	managed,	or	the	location of	the	trading	desk.	However,	many	of	the	Firm's	U.S.	operations	serve international	businesses.

As	the	Firm's	operations	are	highly	integrated,	estimates	and	subjective assumptions	have	been	made	to	apportion	revenue	and	expense	between	U.S.	and international	operations.	These	estimates	and	assumptions	are	consistent	with	the allocations	used	for	the	Firm's	segment	reporting	as	set	forth	in	Note	33.

The	Firm's	long-lived	assets	for	the	periods	presented	are	not	considered	by management	to	be	significant	in	relation	to	total	assets.	The	majority	of	the Firm's	long-lived	assets	are	located	in	the	U.S.

| As	of	or	for	the	year	ended	December	31,	(in	millions) |  | Revenue(b) | Expense(c) | Income	before<br>income	tax<br>expense | Net	income | Total	assets |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2015 |  |  |  |  |  |  |
| Europe/Middle\tEast\tand\tAfrica |  | $14,206 | $8,871 | $5,335 | $4,158 | $347,647 |
| Asia\tand\tPacific |  | 6,151 | 4,241 | 1,910 | 1,285 | 138,747 |
| Latin\tAmerica\tand\tthe\tCaribbean |  | 1,923 | 1,508 | 415 | 253 | 48,185 |
| Total\tinternational |  | 22,280 | 14,620 | 7,660 | 5,696 | 534,579 |
| North\tAmerica(a) |  | 71,263 | 48,221 | 23,042 | 18,746 | 1,817,119 |
| Total |  | $93,543 | $62,841 | $30,702 | $24,442 | $2,351,698 |
|  | 2014 |  |  |  |  |  |
| Europe/Middle\tEast\tand\tAfrica |  | $16,013 | $10,123 | $5,890 | $3,935 | $481,328 |
| Asia\tand\tPacific |  | 6,083 | 4,478 | 1,605 | 1,051 | 147,357 |
| Latin\tAmerica\tand\tthe\tCaribbean |  | 2,047 | 1,626 | 421 | 269 | 44,567 |
| Total\tinternational |  | 24,143 | 16,227 | 7,916 | 5,255 | 673,252 |
| North\tAmerica(a) |  | 70,969 | 48,186 | 22,783 | 16,490 | 1,899,022 |
| Total |  | $95,112 | $64,413 | $30,699 | $21,745 | $2,572,274 |
|  | 2013 |  |  |  |  |  |
| Europe/Middle\tEast\tand\tAfrica |  | $15,585 | $9,069 | $6,516 | $4,842 | $514,747 |
| Asia\tand\tPacific |  | 6,168 | 4,248 | 1,920 | 1,254 | 145,999 |
| Latin\tAmerica\tand\tthe\tCaribbean |  | 2,251 | 1,626 | 625 | 381 | 41,473 |
| Total\tinternational |  | 24,004 | 14,943 | 9,061 | 6,477 | 702,219 |
| North\tAmerica(a) |  | 73,363 | 55,749 | 17,614 | 11,409 | 1,712,660 |
| Total |  | $97,367 | $70,692 | $26,675 | $17,886 | $2,414,879 |

(a) Substantially	reflects	the	U.S.

(b) Revenue	is	composed	of	net	interest	income	and	noninterest	revenue.

(c) Expense	is	composed	of	noninterest	expense	and	the	provision	for	credit	losses.

# Note	33	–	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	80–82.	For	a	further	discussion concerning	JPMorgan	Chase's	business	segments,	see	Business	Segment	Results on	pages	83–84.

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	("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 (including	Consumer	Banking/Chase	Wealth	Management	and	Business Banking),	Mortgage	Banking	(including	Mortgage	Production,	Mortgage Servicing	and	Real	Estate	Portfolios)	and	Card,	Commerce	Solutions	&	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	consisting	of	residential mortgages	and	home	equity	loans.	Card	issues	credit	cards	to	consumers	and small	businesses,	offers	payment	processing	services	to	merchants,	and	provides auto	loans	and	leases	and	student	loan	services.

The	Corporate	&	Investment	Bank	("CIB"),	which	consists	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.	Banking	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.	Banking	also	includes	Treasury Services,	which	provides	transaction	services,	consisting	of	cash	management and	liquidity	solutions.	Markets	&	Investor	Services	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	Securities	Services,	a	leading	global	custodian	which provides	custody,	fund	accounting	and	administration,	and

securities	lending	products	principally	for	asset	managers,	insurance	companies and	public	and	private	investment	funds.

Commercial	Banking	("CB")	delivers	extensive	industry	knowledge,	local expertise	and	dedicated	service	to	U.S.	and	U.S.	multinational	clients,	including corporations,	municipalities,	financial	institutions	and	nonprofit	entities	with annual	revenue	generally	ranging	from	$20	million	to	$2	billion.	In	addition,	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	("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	many	major	markets	throughout	the world.	AM	offers	investment	management	across	most	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.

# Segment	results

The	following	tables	provide	a	summary	of	the	Firm's	segment	results	as	of	or for	the	years	ended	December	31,	2015,	2014	and	2013	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).

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.	This	cost	is	included	as	a	reduction	to	net	income applicable	to	common	equity	to	be	consistent	with	the	presentation	of	firmwide 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	the	equity	allocations	to	its lines	of	business	as	refinements	are	implemented.	Each	business	segment	is allocated	capital	by	taking	into	consideration	stand-alone	peer	comparisons, regulatory	capital	requirements	(as	estimated	under	Basel	III	Advanced	Fully Phased-In	rules)	and	economic	risk.	The	amount	of	capital	assigned	to	each business	is	referred	to	as	equity.

# Segment	results	and	reconciliation

| As	of	or	for	the	year	ended | Consumer	&amp;	Community	Banking | Consumer	&amp;	Community	Banking |  | Corporate	&amp;	Investment	Bank | Corporate	&amp;	Investment	Bank |  | Commercial	Banking | Commercial	Banking |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31, |  |  |  |  |  |  |  |  |  |
| (in\tmillions,\texcept\tratios) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 |
| Noninterest\trevenue | $15,592 | $15,937 | $17,552 | $23,693 | $23,420 | $23,736 | $2,365 | $2,349 | $2,298 |
| Net\tinterest\tincome | 28,228 | 28,431 | 28,985 | 9,849 | 11,175 | 10,976 | 4,520 | 4,533 | 4,794 |
| Total\tnet\trevenue | 43,820 | 44,368 | 46,537 | 33,542 | 34,595 | 34,712 | 6,885 | 6,882 | 7,092 |
| Provision\tfor\tcredit\tlosses | 3,059 | 3,520 | 335 | 332 | (161) | (232) | 442 | (189) | 85 |
| Noninterest\texpense | 24,909 | 25,609 | 27,842 | 21,361 | 23,273 | 21,744 | 2,881 | 2,695 | 2,610 |
| Income/(loss)\tbefore\tincome\ttax\texpense/(benefit) | 15,852 | 15,239 | 18,360 | 11,849 | 11,483 | 13,200 | 3,562 | 4,376 | 4,397 |
| Income\ttax\texpense/(benefit) | 6,063 | 6,054 | 7,299 | 3,759 | 4,575 | 4,350 | 1,371 | 1,741 | 1,749 |
| Net\tincome/(loss) | $9,789 | $9,185 | $11,061 | $8,090 | $6,908 | $8,850 | $2,191 | $2,635 | $2,648 |
| Average\tcommon\tequity | $51,000 | $51,000 | $46,000 | $62,000 | $61,000 | $56,500 | $14,000 | $14,000 | $13,500 |
| Total\tassets | 502,652 | 455,634 | 452,929 | 748,691 | 861,466 | 843,248 | 200,700 | 195,267 | 190,782 |
| Return\ton\tcommon\tequity | 18% | 18% | 23% | 12% | 10% | 15% | 15% | 18% | 19% |
| Overhead\tratio | 57 | 58 | 60 | 64 | 67 | 63 | 42 | 39 | 37 |

(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.

# (table	continued	from	previous	page)

|  | Asset	Management |  |  | Corporate |  |  | Reconciling	Items(a) |  |  | Total |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 |
| $9,563 | $9,588 | $9,029 | $800 | $1,972 | $3,093 | $(1,980) | $(1,788) | $(1,660) | $50,033 | $51,478 | $54,048 |
| 2,556 | 2,440 | 2,376 | (533) | (1,960) | (3,115) | (1,110) | (985) | (697) | 43,510 | 43,634 | 43,319 |
| 12,119 | 12,028 | 11,405 | 267 | 12 | (22) | (3,090) | (2,773) | (2,357) | 93,543 | 95,112 | 97,367 |
| 4 | 4 | 65 | (10) | (35) | (28) | — | — | — | 3,827 | 3,139 | 225 |
| 8,886 | 8,538 | 8,016 | 977 | 1,159 | 10,255 | — | — | — | 59,014 | 61,274 | 70,467 |
| 3,229 | 3,486 | 3,324 | (700) | (1,112) | (10,249) | (3,090) | (2,773) | (2,357) | 30,702 | 30,699 | 26,675 |
| 1,294 | 1,333 | 1,241 | (3,137) | (1,976) | (3,493) | (3,090) | (2,773) | (2,357) | 6,260 | 8,954 | 8,789 |
| $1,935 | $2,153 | $2,083 | $2,437 | $864 | $(6,756) | $— | $— | $— | $24,442 | $21,745 | $17,886 |
| $9,000 | $9,000 | $9,000 | $79,690 | $72,400 | $71,409 | $— | $— | $— | $215,690 | $207,400 | $196,409 |
| 131,451 | 128,701 | 122,414 | 768,204 | 931,206 | 805,506 | NA | NA | NA | 2,351,698 | 2,572,274 | 2,414,879 |
| 21% | 23% | 23% | NM | NM | NM | NM | NM | NM | 11% | 10% | 9% |
| 73 | 71 | 70 | NM | NM | NM | NM | NM | NM | 63 | 64 | 72 |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport | JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  |  |  |  |  |  | 307 |

# Note	34	–	Parent	company

# Parent	company	–	Statements	of	income	and	comprehensive	income

# Parent	company	–	Statements	of	cash	flows

| (in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Operating\tactivities |  |  |  |
| Net\tincome | $24,442 | $21,745 | $17,886 |
| Less:\tNet\tincome\tof\tsubsidiaries\tand\naffiliates(a) | 26,745 | 22,972 | 25,496 |
| Parent\tcompany\tnet\tloss | (2,303) | (1,227) | (7,610) |
| Cash\tdividends\tfrom\tsubsidiaries\tand\naffiliates(a) | 17,023 | 14,714 | 1,917 |
| Other\toperating\tadjustments | 2,483 | (1,681) | 3,217 |
| Net\tcash\tprovided\tby/(used\tin)\toperating\nactivities | 17,203 | 11,806 | (2,476) |
| Investing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Deposits\twith\tbanking\tsubsidiaries | 30,085 | (31,040) | 10,679 |
| Available-for-sale\tsecurities: |  |  |  |
| Proceeds\tfrom\tpaydowns\tand\tmaturities | 120 | 12,076 | 61 |
| Purchases | — | — | (12,009) |
| Other\tchanges\tin\tloans,\tnet | 321 | (319) | (713) |
| Advances\tto\tand\tinvestments\tin\tsubsidiaries\nand\taffiliates,\tnet | (81) | 3,306 | 14,469 |
| All\tother\tinvesting\tactivities,\tnet | 153 | 32 | 22 |
| Net\tcash\tprovided\tby/(used\tin)\tinvesting\nactivities | 30,598 | (15,945) | 12,509 |
| Financing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Borrowings\tfrom\tsubsidiaries\tand\naffiliates(a) | (4,062) | 4,454 | (2,715) |
| Other\tborrowed\tfunds | (47,483) | (5,778) | (7,297) |
| Proceeds\tfrom\tthe\tissuance\tof\tlong-term\ndebt | 42,121 | 40,284 | 31,303 |
| Payments\tof\tlong-term\tdebt | (30,077) | (31,050) | (21,510) |
| Proceeds\tfrom\tissuance\tof\tpreferred\tstock | 5,893 | 8,847 | 3,873 |
| Redemption\tof\tpreferred\tstock | — | — | (1,800) |
| Treasury\tstock\tand\twarrants\trepurchased | (5,616) | (4,760) | (4,789) |
| Dividends\tpaid | (7,873) | (6,990) | (6,056) |
| All\tother\tfinancing\tactivities,\tnet | (840) | (921) | (994) |
| Net\tcash\tprovided\tby/(used\tin)\tfinancing\nactivities | (47,937) | 4,086 | (9,985) |
| Net\tincrease/(decrease)\tin\tcash\tand\tdue\nfrom\tbanks | (137) | (53) | 48 |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tbeginning |  |  |  |
| of\tthe\tyear,\tprimarily\twith\tbank |  |  |  |
| subsidiaries | 211 | 264 | 216 |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tend\tof |  |  |  |
| the\tyear,\tprimarily\twith\tbank |  |  |  |
| subsidiaries | $74 | $211 | $264 |
| Cash\tinterest\tpaid | $3,873 | $3,921 | $4,409 |
| Cash\tincome\ttaxes\tpaid,\tnet | 8,251 | 200 | 2,390 |

(a) Affiliates	include	trusts	that	issued	guaranteed	capital	debt	securities	("issuer	trusts").	The	Parent	received dividends	of	$2	million,	$2	million	and	$5	million	from	the	issuer	trusts	in	2015,	2014	and	2013,	respectively. For	further	discussion	on	these	issuer	trusts,	see	Note	21.

(c) For	information	regarding	the	Parent's	guarantees	of	its	subsidiaries'	obligations,	see	Notes	21	and 29.

# Selected	quarterly	financial	data	(unaudited)

| otherwise	noted) | 4th	quarter | 3rd	quarter | 2nd	quarter | 1st	quarter | 4th	quarter | 3rd	quarter | 2nd	quarter | 1st	quarter |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Selected\tincome\tstatement\tdata |  |  |  |  |  |  |  |  |
| Total\tnet\trevenue | $22,885 | $22,780 | $23,812 | $24,066 | $22,750 | $24,469 | $24,678 | $23,215 |
| Total\tnoninterest\texpense | 14,263 | 15,368 | 14,500 | 14,883 | 15,409 | 15,798 | 15,431 | 14,636 |
| Pre-provision\tprofit | 8,622 | 7,412 | 9,312 | 9,183 | 7,341 | 8,671 | 9,247 | 8,579 |
| Provision\tfor\tcredit\tlosses | 1,251 | 682 | 935 | 959 | 840 | 757 | 692 | 850 |
| Income\tbefore\tincome\ttax\texpense | 7,371 | 6,730 | 8,377 | 8,224 | 6,501 | 7,914 | 8,555 | 7,729 |
| Income\ttax\texpense | 1,937 | (74) | 2,087 | 2,310 | 1,570 | 2,349 | 2,575 | 2,460 |
| Net\tincome | $5,434 | $6,804 | $6,290 | $5,914 | $4,931 | $5,565 | $5,980 | $5,269 |
| Per\tcommon\tshare\tdata |  |  |  |  |  |  |  |  |
| Net\tincome:\tBasic | $1.34 | $1.70 | $1.56 | $1.46 | $1.20 | $1.37 | $1.47 | $1.29 |
| Diluted | 1.32 | 1.68 | 1.54 | 1.45 | 1.19 | 1.35 | 1.46 | 1.28 |
| Average\tshares:\tBasic | 3,674.2 | 3,694.4 | 3,707.8 | 3,725.3 | 3,730.9 | 3,755.4 | 3,780.6 | 3,787.2 |
| Diluted | 3,704.6 | 3,725.6 | 3,743.6 | 3,757.5 | 3,765.2 | 3,788.7 | 3,812.5 | 3,823.6 |
| Market\tand\tper\tcommon\tshare\tdata |  |  |  |  |  |  |  |  |
| Market\tcapitalization | $241,899 | $224,438 | $250,581 | $224,818 | $232,472 | $225,188 | $216,725 | $229,770 |
| Common\tshares\tat\tperiod-end | 3,663.5 | 3,681.1 | 3,698.1 | 3,711.1 | 3,714.8 | 3,738.2 | 3,761.3 | 3,784.7 |
| Share\tprice(a): |  |  |  |  |  |  |  |  |
| High | $69.03 | $70.61 | $69.82 | $62.96 | $63.49 | $61.85 | $61.29 | $61.48 |
| Low | 58.53 | 50.07 | 59.65 | 54.27 | 54.26 | 54.96 | 52.97 | 54.20 |
| Close | 66.03 | 60.97 | 67.76 | 60.58 | 62.58 | 60.24 | 57.62 | 60.71 |
| Book\tvalue\tper\tshare | 60.46 | 59.67 | 58.49 | 57.77 | 56.98 | 56.41 | 55.44 | 53.97 |
| Tangible\tbook\tvalue\tper\tshare\t("TBVPS")(b) | 48.13 | 47.36 | 46.13 | 45.45 | 44.60 | 44.04 | 43.08 | 41.65 |
| Cash\tdividends\tdeclared\tper\tshare | 0.44 | 0.44 | 0.44 | 0.40 | 0.40 | 0.40 | 0.40 | 0.38 |
| Selected\tratios\tand\tmetrics |  |  |  |  |  |  |  |  |
| Return\ton\tcommon\tequity\t("ROE") | 9% | 12% | 11% | 11% | 9% | 10% | 11% | 10% |
| Return\ton\ttangible\tcommon\tequity\t("ROTCE")(b) | 11 | 15 | 14 | 14 | 11 | 13 | 14 | 13 |
| Return\ton\tassets\t("ROA") | 0.90 | 1.11 | 1.01 | 0.94 | 0.78 | 0.90 | 0.99 | 0.89 |
| Overhead\tratio | 62 | 67 | 61 | 62 | 68 | 65 | 63 | 63 |
| Loans-to-deposits\tratio | 65 | 64 | 61 | 56 | 56 | 56 | 57 | 57 |
| HQLA\t(in\tbillions)(c) | $496 | $505 | $532 | $614 | $600 | $572 | $576 | $538 |
| CET1\tcapital\tratio(d) | 11.8% | 11.5% | 11.2% | 10.7% | 10.2% | 10.2% | 9.8% | 10.9% |
| Tier\t1\tcapital\tratio(d) | 13.5 | 13.3 | 12.8 | 12.1 | 11.6 | 11.5 | 11.0 | 12.0 |
| Total\tcapital\tratio(d) | 15.1 | 14.9 | 14.4 | 13.6 | 13.1 | 12.8 | 12.5 | 14.5 |
| Tier\t1\tleverage\tratio | 8.5 | 8.4 | 8.0 | 7.5 | 7.6 | 7.6 | 7.6 | 7.3 |
| Selected\tbalance\tsheet\tdata\t(period-end) |  |  |  |  |  |  |  |  |
| Trading\tassets | $343,839 | $361,708 | $377,870 | $398,981 | $398,988 | $410,657 | $392,543 | $375,204 |
| Securities | 290,827 | 306,660 | 317,795 | 331,136 | 348,004 | 366,358 | 361,918 | 351,850 |
| Loans | 837,299 | 809,457 | 791,247 | 764,185 | 757,336 | 743,257 | 746,983 | 730,971 |
| Core\tLoans | 732,093 | 698,988 | 674,767 | 641,285 | 628,785 | 607,617 | 603,440 | 582,206 |
| Total\tassets | 2,351,698 | 2,416,635 | 2,449,098 | 2,576,619 | 2,572,274 | 2,526,158 | 2,519,494 | 2,476,152 |
| Deposits | 1,279,715 | 1,273,106 | 1,287,332 | 1,367,887 | 1,363,427 | 1,334,534 | 1,319,751 | 1,282,705 |
| Long-term\tdebt(e) | 288,651 | 292,503 | 286,240 | 280,123 | 276,379 | 268,265 | 269,472 | 274,053 |
| Common\tstockholders'\tequity | 221,505 | 219,660 | 216,287 | 214,371 | 211,664 | 210,876 | 208,520 | 204,246 |
| Total\tstockholders'\tequity | 247,573 | 245,728 | 241,205 | 235,864 | 231,727 | 230,939 | 226,983 | 219,329 |
| Headcount | 234,598 | 235,678 | 237,459 | 241,145 | 241,359 | 242,388 | 245,192 | 246,994 |
| JPMorgan\tChase\t&amp;\tCo./2015\tAnnual\tReport |  |  |  |  |  |  |  | 309 |

| As	of	or	for	the	period	ended |  | 2015 |  |  |  | 2014 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratio\tdata) | 4th\tquarter | 3rd\tquarter | 2nd\tquarter | 1st\tquarter | 4th\tquarter | 3rd\tquarter | 2nd\tquarter | 1st\tquarter |
| Credit\tquality\tmetrics |  |  |  |  |  |  |  |  |
| Allowance\tfor\tcredit\tlosses | $14,341 | $14,201 | $14,535 | $14,658 | $14,807 | $15,526 | $15,974 | $16,485 |
| Allowance\tfor\tloan\tlosses\tto\ttotal\tretained\tloans | 1.63% | 1.67% | 1.78% | 1.86% | 1.90% | 2.02% | 2.08% | 2.20% |
| Allowance\tfor\tloan\tlosses\tto\tretained\tloans\texcluding\tpurchased\ncredit-impaired\tloans(f) | 1.37 | 1.40 | 1.45 | 1.52 | 1.55 | 1.63 | 1.69 | 1.75 |
| Nonperforming\tassets | $7,034 | $7,294 | $7,588 | $7,714 | $7,967 | $8,390 | $9,017 | $9,473 |
| Net\tcharge-offs | 1,064 | 963 | 1,007 | 1,052 | 1,218 | 1,114 | 1,158 | 1,269 |
| Net\tcharge-off\trate | 0.52% | 0.49% | 0.53% | 0.57% | 0.65% | 0.60% | 0.64% | 0.71% |

Note:	Effective	October	1,	2015,	and	January	1,	2015,	JPMorgan	Chase	&	Co.	("JPMorgan	Chase"	or	the	"Firm")	adopted	new	accounting	guidance,	retrospectively,	related	to	(1)	the	presentation	of	debt	issuance	costs,	and	(2)	investments	in	affordable	housing	projects	that qualify	for	the	low-income	housing	tax	credit,	respectively.	For	additional	information,	see	Explanation	and	Reconciliation	of	the	Firm's	Use	of	Non-GAAP	Financial	Measures	on	pages	80–82	,	Accounting	and	Reporting	Developments	on	page	170,	and	Note	1.

(c) HQLA	represents	the	amount	of	assets	that	qualify	for	inclusion	in	the	liquidity	coverage	ratio	under	the	final	U.S.	rule	("U.S.	LCR")	for	4Q15,	3Q15,	2Q15	and	1Q15	and	the	estimated	amounts	for	4Q14	and	3Q14	prior	to	the	effective	date	of	the	final	rule	and	under the	Basel	III	liquidity	coverage	ratio	("Basel	III	LCR")	for	2Q14	and	1Q14.	For	additional	information,	see	HQLA	on	page	160.

(d) As	of	December	31,	2015,	September	30,	2015,	June	30,	2015,	March	31,	2015,	December	31,	2014,	September	30,	2014,	and	June	30,	2014,	the	ratios	presented	are	calculated	under	the	U.S.	Basel	III	transitional	rules.	As	of	March	31,	2015	the	ratio	presented	is calculated	under	Basel	III	Standardized	Transitional	rules.	All	periods	shown	represent	the	Collins	Floor.	See	Capital	Management	on	pages	149–158	for	additional	information	on	Basel	III	and	non-GAAP	financial	measures	of	regulatory	capital.

(f) Excludes	the	impact	of	residential	real	estate	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	on pages	80–82.	For	further	discussion,	see Allowance	for	credit	losses	on	pages	130–132.

# Glossary	of	Terms

Active	foreclosures:	Loans	referred	to	foreclosure	where	formal	foreclosure proceedings	are	ongoing.	Includes	both	judicial	and	non-judicial	states.

Allowance	for	loan	losses	to	total	loans:	Represents	period-end	allowance	for loan	losses	divided	by	retained	loans.

Alternative	assets:	The	following	types	of	assets	constitute	alternative investments	–	hedge	funds,	currency,	real	estate,	private	equity	and	other investment	funds	designed	to	focus	on	nontraditional	strategies.

Assets	under	management:	Represent	assets	actively	managed	by	AM	on behalf	of	its	Private	Banking,	Institutional	and	Retail	clients.	Includes "Committed	capital	not	Called,"	on	which	AM	earns	fees.

Beneficial	interests	issued	by	consolidated	VIEs:	Represents	the	interest	of third-party	holders	of	debt,	equity	securities,	or	other	obligations,	issued	by	VIEs that	JPMorgan	Chase	consolidates.

Benefit	obligation:	Refers	to	the	projected	benefit	obligation	for	pension	plans and	the	accumulated	postretirement	benefit	obligation	for	OPEB	plans.

Central	counterparty	("CCP"):	A	CCP	is	a	clearing	house	that	interposes	itself between	counterparties	to	contracts	traded	in	one	or	more	financial	markets, becoming	the	buyer	to	every	seller	and	the	seller	to	every	buyer	and	thereby ensuring	the	future	performance	of	open	contracts.	A	CCP	becomes	counterparty to	trades	with	market	participants	through	novation,	an	open	offer	system,	or another	legally	binding	arrangement.

Chase	LiquidSM	cards:	Refers	to	a	prepaid,	reloadable	card	product.

Client	advisors:	Investment	product	specialists,	including	private	client advisors,	financial	advisors,	financial	advisor	associates,	senior	financial advisors,	independent	financial	advisors	and	financial	advisor	associate	trainees, who	advise	clients	on	investment	options,	including	annuities,	mutual	funds, stock	trading	services,	etc.,	sold	by	the	Firm	or	by	third-party	vendors	through retail	branches,	Chase	Private	Client	locations	and	other	channels.

Client	assets:	Represent	assets	under	management	as	well	as	custody, brokerage,	administration	and	deposit	accounts.

Client	deposits	and	other	third	party	liabilities:	Deposits,	as	well	as	deposits that	are	swept	to	on-balance	sheet	liabilities	(e.g.,	commercial	paper,	federal funds	purchased	and	securities	loaned	or	sold	under	repurchase	agreements)	as part	of	client	cash	management	programs.	During	the	third	quarter	2015	the	Firm completed	the	discontinuation	of	its	commercial	paper	customer	sweep	cash management	program.

# Client	investment	managed	accounts:	Assets	actively	managed	by	Chase

Wealth	Management	on	behalf	of	clients.	The	percentage	of	managed	accounts	is calculated	by	dividing	managed	account	assets	by	total	client	investment	assets.

Commercial	Card	provides	a	wide	range	of	payment	services	to	corporate	and public	sector	clients	worldwide	through	the	commercial	card	products.	Services include	procurement,	corporate	travel	and	entertainment,	expense	management services,	and	business-to-business	payment	solutions.

Core	loans:	Loans	considered	central	to	the	Firm's	ongoing	businesses;	core loans	exclude	loans	classified	as	trading	assets,	runoff	portfolios,	discontinued portfolios	and	portfolios	the	Firm	has	an	intent	to	exit.

Credit	cycle:	A	period	of	time	over	which	credit	quality	improves,	deteriorates and	then	improves	again	(or	vice	versa).	The	duration	of	a	credit	cycle	can	vary from	a	couple	of	years	to	several	years.

Credit	derivatives:	Financial	instruments	whose	value	is	derived	from	the	credit risk	associated	with	the	debt	of	a	third	party	issuer	(the	reference	entity)	which allow	one	party	(the	protection	purchaser)	to	transfer	that	risk	to	another	party (the	protection	seller).	Upon	the	occurrence	of	a	credit	event	by	the	reference entity,	which	may	include,	among	other	events,	the	bankruptcy	or	failure	to	pay its	obligations,	or	certain	restructurings	of	the	debt	of	the	reference	entity,	neither party	has	recourse	to	the	reference	entity.	The	protection	purchaser	has	recourse to	the	protection	seller	for	the	difference	between	the	face	value	of	the	CDS contract	and	the	fair	value	at	the	time	of	settling	the	credit	derivative	contract. The	determination	as	to	whether	a	credit	event	has	occurred	is	generally	made	by the	relevant	International	Swaps	and	Derivatives	Association	("ISDA") Determinations	Committee.

Deposit	margin/deposit	spread:	Represents	net	interest	income	expressed	as	a percentage	of	average	deposits.

Distributed	denial-of-service	attack:	The	use	of	a	large	number	of	remote computer	systems	to	electronically	send	a	high	volume	of	traffic	to	a	target website	to	create	a	service	outage	at	the	target.	This	is	a	form	of	cyberattack.

Exchange-traded	derivatives:	Derivative	contracts	that	are	executed	on	an exchange	and	settled	via	a	central	clearing	house.

Fee	share:	Proportion	of	fee	revenue	based	on	estimates	of	investment	banking fees	generated	across	the	industry	from	investment	banking	transactions	in M&A,	equity	and	debt	underwriting,	and	loan	syndications.	Source:	Dealogic,	a third	party	provider	of	investment	banking	fee	competitive	analysis	and	volume- based	league	tables	for	the	above	noted	industry	products.

FICO	score:	A	measure	of	consumer	credit	risk	provided	by	credit	bureaus, typically	produced	from	statistical	models	by	Fair	Isaac	Corporation	utilizing data	collected	by	the	credit	bureaus.

Forward	points:	Represents	the	interest	rate	differential	between	two currencies,	which	is	either	added	to	or	subtracted	from	the	current	exchange	rate (i.e.,	"spot	rate")	to	determine	the	forward	exchange	rate.

Group	of	Seven	("G7")	nations:	Countries	in	the	G7	are	Canada,	France, Germany,	Italy,	Japan,	the	U.K.	and	the	U.S.

G7	government	bonds:	Bonds	issued	by	the	government	of	one	of	the	G7 nations.

Headcount-related	expense:	Includes	salary	and	benefits	(excluding performance-based	incentives),	and	other	noncompensation	costs	related	to employees.

Home	equity	–	senior	lien:	Represents	loans	and	commitments	where JPMorgan	Chase	holds	the	first	security	interest	on	the	property.

Home	equity	–	junior	lien:	Represents	loans	and	commitments	where JPMorgan	Chase	holds	a	security	interest	that	is	subordinate	in	rank	to	other liens.

Impaired	loan:	Impaired	loans	are	loans	measured	at	amortized	cost,	for	which it	is	probable	that	the	Firm	will	be	unable	to	collect	all	amounts	due,	including principal	and	interest,	according	to	the	contractual	terms	of	the	agreement. Impaired	loans	include	the	following:

•All	wholesale	nonaccrual loans

•All	TDRs	(both	wholesale	and	consumer),	including	ones	that	have	returned to	accrual	status

Interchange	income:	A	fee	paid	to	a	credit	card	issuer	in	the	clearing	and settlement	of	a	sales	or	cash	advance	transaction.

Investment-grade:	An	indication	of	credit	quality	based	on	JPMorgan	Chase's internal	risk	assessment	system.	"Investment	grade"	generally	represents	a	risk profile	similar	to	a	rating	of	a	"BBB-"/"Baa3"	or	better,	as	defined	by independent	rating	agencies.

# LLC:	Limited	Liability	Company.

Loan-to-value	("LTV")	ratio:	For	residential	real	estate	loans,	the	relationship, expressed	as	a	percentage,	between	the	principal	amount	of	a	loan	and	the appraised	value	of	the	collateral	(i.e.,	residential	real	estate)	securing	the	loan.

# Origination	date	LTV	ratio

The	LTV	ratio	at	the	origination	date	of	the	loan.	Origination	date	LTV	ratios	are calculated	based	on	the	actual	appraised	values	of	collateral	(i.e.,	loan-level	data) at	the	origination	date.

# Current	estimated	LTV	ratio

An	estimate	of	the	LTV	as	of	a	certain	date.	The	current	estimated	LTV	ratios are	calculated	using	estimated	collateral	values	derived	from	a	nationally recognized	home	price	index	measured	at	the	metropolitan	statistical	area ("MSA")	level.	These	MSA-level	home	price	indices	consist	of	actual	data	to	the extent	available	and	forecasted	data	where	actual	data	is	not	available.	As	a result,	the	estimated	collateral	values	used	to	calculate	these	ratios	do	not represent	actual	appraised	loan-level	collateral	values;	as	such,	the	resulting	LTV ratios	are	necessarily	imprecise	and	should	therefore	be	viewed	as	estimates.

# Combined	LTV	ratio

The	LTV	ratio	considering	all	available	lien	positions,	as	well	as	unused	lines, related	to	the	property.	Combined	LTV	ratios	are	used	for	junior	lien	home equity	products.

Managed	basis:	A	non-GAAP	presentation	of	financial	results	that	includes reclassifications	to	present	revenue	on	a	fully	taxable-equivalent	basis. Management	uses	this	non-	GAAP	financial	measure	at	the	segment	level, because	it	believes	this	provides	information	to	enable	investors	to	understand the	underlying	operational	performance	and	trends	of	the	particular	business segment	and	facilitates	a	comparison	of	the	business	segment	with	the performance	of	competitors.

Master	netting	agreement:	An	agreement	between	two	counterparties	who have	multiple	contracts	with	each	other	that	provides	for	the	net	settlement	of	all contracts,	as	well	as	cash	collateral,	through	a	single	payment,	in	a	single currency,	in	the	event	of	default	on	or	termination	of	any	one	contract.

# Mortgage	origination	channels:

Retail	–	Borrowers	who	buy	or	refinance	a	home	through	direct	contact	with	a mortgage	banker	employed	by	the	Firm	using	a	branch	office,	the	Internet	or	by phone.	Borrowers	are	frequently	referred	to	a	mortgage	banker	by	a	banker	in	a Chase	branch,	real	estate	brokers,	home	builders	or	other	third	parties.

Correspondent	–	Banks,	thrifts,	other	mortgage	banks	and	other	financial institutions	that	sell	closed	loans	to	the	Firm.

# Mortgage	product	types:

# Alt-A

Alt-A	loans	are	generally	higher	in	credit	quality	than	subprime	loans	but	have characteristics	that	would	disqualify	the	borrower	from	a	traditional	prime	loan. Alt-A	lending	characteristics	may	include	one	or	more	of	the	following:	(i) limited	documentation;	(ii)	a	high	combined	loan-to-value	("CLTV")	ratio;	(iii) loans	secured	by	non-owner	occupied	properties;	or	(iv)	a	debt-to-income	ratio above	normal	limits.	A	substantial	proportion	of	the	Firm's	Alt-A	loans	are	those where	a	borrower	does	not	provide	complete	documentation	of	his	or	her	assets or	the	amount	or	source	of	his	or	her	income.

The	option	ARM	real	estate	loan	product	is	an	adjustable-rate	mortgage	loan	that provides	the	borrower	with	the	option	each	month	to	make	a	fully	amortizing, interest-only	or	minimum	payment.	The	minimum	payment	on	an	option	ARM loan	is	based	on	the	interest	rate	charged	during	the	introductory	period.	This introductory	rate	is	usually	significantly	below	the	fully	indexed	rate.	The	fully indexed	rate	is	calculated	using	an	index	rate	plus	a	margin.	Once	the introductory	period	ends,	the	contractual	interest	rate	charged	on	the	loan increases	to	the	fully	indexed	rate	and	adjusts	monthly	to	reflect	movements	in the	index.	The	minimum	payment	is	typically	insufficient	to	cover	interest accrued	in	the	prior	month,	and	any	unpaid	interest	is

deferred	and	added	to	the	principal	balance	of	the	loan.	Option	ARM	loans	are subject	to	payment	recast,	which	converts	the	loan	to	a	variable-rate	fully amortizing	loan	upon	meeting	specified	loan	balance	and	anniversary	date triggers.

# Prime

Prime	mortgage	loans	are	made	to	borrowers	with	good	credit	records	who	meet specific	underwriting	requirements,	including	prescriptive	requirements	related to	income	and	overall	debt	levels.	New	prime	mortgage	borrowers	provide	full documentation	and	generally	have	reliable	payment	histories.

# Subprime

Subprime	loans	are	loans	that,	prior	to	mid-2008,	were	offered	to	certain customers	with	one	or	more	high	risk	characteristics,	including	but	not	limited to:	(i)	unreliable	or	poor	payment	histories;	(ii)	a	high	LTV	ratio	of	greater	than 80%	(without	borrower-paid	mortgage	insurance);	(iii)	a	high	debt-to-income ratio;	(iv)	an	occupancy	type	for	the	loan	is	other	than	the	borrower's	primary residence;	or	(v)	a	history	of	delinquencies	or	late	payments	on	the	loan.

Multi-asset:	Any	fund	or	account	that	allocates	assets	under	management	to more	than	one	asset	class.

N/A:	Data	is	not	applicable	or	available	for	the	period	presented.

Net	charge-off/(recovery)	rate:	Represents	net	charge-offs/(recoveries) (annualized)	divided	by	average	retained	loans	for	the	reporting	period.

Net	production	revenue:	Includes	net	gains	or	losses	on	originations	and	sales of	mortgage	loans,	other	production-related	fees	and	losses	related	to	the repurchase	of	previously-sold	loans.

Net	mortgage	servicing	revenue	includes	the	following	components:

Operating	revenue	predominantly	represents	the	return	on	Mortgage	Servicing's MSR	asset	and	includes:

–	Actual	gross	income	earned	from	servicing	third-party	mortgage	loans, such	as	contractually	specified	servicing	fees	and	ancillary	income;	and

–	The	change	in	the	fair	value	of	the	MSR	asset	due	to	the	collection	or realization	of	expected	cash	flows.

Risk	management	represents	the	components	of Mortgage	Servicing's	MSR	asset	that	are	subject	to	ongoing	risk	management activities,	together	with	derivatives	and	other	instruments	used	in	those	risk management	activities.

# Net	yield	on	interest-earning	assets:	The	average	rate	for	interest-earning

assets	less	the	average	rate	paid	for	all	sources	of	funds.

# NM:	Not	meaningful.

Nonaccrual	loans:	Loans	for	which	interest	income	is	not	recognized	on	an accrual	basis.	Loans	(other	than	credit	card	loans	and	certain	consumer	loans insured	by	U.S.	government	agencies)	are	placed	on	nonaccrual	status	when	full payment	of	principal	and	interest	is	not	expected	or	when	principal	and	interest has	been	in	default	for	a	period	of	90	days	or	more	unless	the	loan	is	both	well- secured	and	in	the	process	of	collection.	Collateral-dependent	loans	are	typically maintained	on	nonaccrual	status.

Nonperforming	assets:	Nonperforming	assets	include	nonaccrual	loans, nonperforming	derivatives	and	certain	assets	acquired	in	loan	satisfaction, predominantly	real	estate	owned	and	other	commercial	and	personal	property.

Over-the-counter	("OTC")	derivatives:	Derivative	contracts	that	are negotiated,	executed	and	settled	bilaterally	between	two	derivative counterparties,	where	one	or	both	counterparties	is	a	derivatives	dealer.

Over-the-counter	cleared	("OTC-cleared")	derivatives:	Derivative	contracts that	are	negotiated	and	executed	bilaterally,	but	subsequently	settled	via	a	central clearing	house,	such	that	each	derivative	counterparty	is	only	exposed	to	the default	of	that	clearing	house.

Overhead	ratio:	Noninterest	expense	as	a	percentage	of	total	net	revenue.

Participating	securities:	Represents	unvested	stock-based	compensation	awards containing	nonforfeitable	rights	to	dividends	or	dividend	equivalents (collectively,	"dividends"),	which	are	included	in	the	earnings	per	share calculation	using	the	two-class	method.	JPMorgan	Chase	grants	restricted	stock and	RSUs	to	certain	employees	under	its	stock-based	compensation	programs, which	entitle	the	recipients	to	receive	nonforfeitable	dividends	during	the	vesting period	on	a	basis	equivalent	to	the	dividends	paid	to	holders	of	common	stock. These	unvested	awards	meet	the	definition	of	participating	securities.	Under	the two-class	method,	all	earnings	(distributed	and	undistributed)	are	allocated	to each	class	of	common	stock	and	participating	securities,	based	on	their respective	rights	to	receive	dividends.

Personal	bankers:	Retail	branch	office	personnel	who	acquire,	retain	and expand	new	and	existing	customer	relationships	by	assessing	customer	needs and	recommending	and	selling	appropriate	banking	products	and	services.

Pre-provision	profit/(loss):	Represents	total	net	revenue	less	noninterest expense.	The	Firm	believes	that	this	financial	measure	is	useful	in	assessing	the ability	of	a	lending	institution	to	generate	income	in	excess	of	its	provision	for credit	losses.

Pretax	margin:	Represents	income	before	income	tax	expense	divided	by	total net	revenue,	which	is,	in	management's	view,	a	comprehensive	measure	of pretax	performance	derived	by	measuring	earnings	after	all	costs	are	taken	into consideration.	It	is	one	basis	upon	which	management	evaluates	the	performance of	AM	against	the	performance	of	their	respective	competitors.

Principal	transactions	revenue:	Principal	transactions	revenue	includes realized	and	unrealized	gains	and	losses	recorded	on	derivatives,	other	financial instruments,	private	equity	investments,	and	physical	commodities	used	in market	making	and	client-driven	activities.	In	addition,	Principal	transactions revenue	also	includes	certain	realized	and	unrealized	gains	and	losses	related	to hedge	accounting	and	specified	risk	management	activities	including:	(a)	certain derivatives	designated	in	qualifying	hedge	accounting	relationships	(primarily fair	value	hedges	of	commodity	and	foreign	exchange	risk),	(b)	certain derivatives	used	for	specified	risk	management	purposes,	primarily	to	mitigate credit	risk,	foreign	exchange	risk	and	commodity	risk,	and	(c)	other	derivatives.

Purchased	credit-impaired	("PCI")	loans:	Represents	loans	that	were	acquired in	the	Washington	Mutual	transaction	and	deemed	to	be	credit-impaired	on	the acquisition	date	in	accordance	with	the	guidance	of	the	Financial	Accounting Standards	Board	("FASB").	The	guidance	allows	purchasers	to	aggregate	credit- impaired	loans	acquired	in	the	same	fiscal	quarter	into	one	or	more	pools, provided	that	the	loans	have	common	risk	characteristics	(e.g.,	product	type, LTV	ratios,	FICO	scores,	past	due	status,	geographic	location).	A	pool	is	then accounted	for	as	a	single	asset	with	a	single	composite	interest	rate	and	an aggregate	expectation	of	cash	flows.

Real	assets:	Real	assets	include	investments	in	productive	assets	such	as agriculture,	energy	rights,	mining	and	timber	properties	and	exclude	raw	land	to be	developed	for	real	estate	purposes.

Real	estate	investment	trust	("REIT"):	A	special	purpose	investment	vehicle that	provides	investors	with	the	ability	to	participate	directly	in	the	ownership	or financing	of	real-estate	related	assets	by	pooling	their	capital	to	purchase	and manage	income	property	(i.e.,	equity	REIT)	and/or	mortgage	loans	(i.e., mortgage	REIT).	REITs	can	be	publicly-or	privately-held	and	they	also	qualify for	certain	favorable	tax	considerations.

Receivables	from	customers:	Primarily	represents	margin	loans	to	prime	and retail	brokerage	customers	which	are	included	in	accrued	interest	and	accounts receivable	on	the	Consolidated	balance	sheets.

Reported	basis:	Financial	statements	prepared	under	U.S.	GAAP,	which excludes	the	impact	of	taxable-equivalent	adjustments.

Retained	loans:	Loans	that	are	held-for-investment	(i.e.,	excludes	loans	held- for-sale	and	loans	at	fair	value).

Revenue	wallet:	Proportion	of	fee	revenue	based	on	estimates	of	investment banking	fees	generated	across	the	industry	(i.e.,	the	revenue	wallet)	from investment	banking	transactions	in	M&A,	equity	and	debt	underwriting,	and loan	syndications.	Source:	Dealogic,	a	third	party	provider	of	investment	banking competitive	analysis	and	volume-based	league	tables	for	the	above	noted industry	products.

Risk-weighted	assets	("RWA"):	Basel	III	establishes	two	comprehensive methodologies	for	calculating	RWA	(a	Standardized	approach	and	an	Advanced approach)	which	include	capital	requirements	for	credit	risk,	market	risk,	and	in the	case	of	Basel	III	Advanced,	also	operational	risk.	Key	differences	in	the calculation	of	credit	risk	RWA	between	the	Standardized	and	Advanced approaches	are	that	for	Basel	III	Advanced,	credit	risk	RWA	is	based	on	risk- sensitive	approaches	which	largely	rely	on	the	use	of	internal	credit	models	and parameters,	whereas	for	Basel	III	Standardized,	credit	risk	RWA	is	generally based	on	supervisory	risk-weightings	which	vary	primarily	by	counterparty	type and	asset	class.	Market	risk	RWA	is	calculated	on	a	generally	consistent	basis between	Basel	III	Standardized	and	Basel	III	Advanced,	both	of	which incorporate	the	requirements	set	forth	in	Basel	2.5.

Sales	specialists:	Retail	branch	office	and	field	personnel,	including	relationship managers	and	loan	officers,	who	specialize	in	marketing	and	sales	of	various business	banking	products	(i.e.,	business	loans,	letters	of	credit,	deposit	accounts, Commerce	Solutions,	etc.)	and	mortgage	products	to	existing	and	new	clients.

Seed	capital:	Initial	JPMorgan	capital	invested	in	products,	such	as	mutual funds,	with	the	intention	of	ensuring	the	fund	is	of	sufficient	size	to	represent	a viable	offering	to	clients,	enabling	pricing	of	its	shares,	and	allowing	the manager	to	develop	a	track	record.	After	these	goals	are	achieved,	the	intent	is	to remove	the	Firm's	capital	from	the	investment.

Short	sale:	A	short	sale	is	a	sale	of	real	estate	in	which	proceeds	from	selling	the underlying	property	are	less	than	the	amount	owed	the	Firm	under	the	terms	of the	related	mortgage	and	the	related	lien	is	released	upon	receipt	of	such proceeds.

Structural	interest	rate	risk:	Represents	interest	rate	risk	of	the	non-trading assets	and	liabilities	of	the	Firm.

Structured	notes:	Structured	notes	are	predominantly	financial	instruments containing	embedded	derivatives.	Where	present,	the	embedded	derivative	is	the primary	driver	of	risk.

Suspended	foreclosures:	Loans	referred	to	foreclosure	where	formal foreclosure	proceedings	have	started	but	are	currently	on	hold,	which	could	be due	to	bankruptcy	or	loss	mitigation.	Includes	both	judicial	and	non-judicial states.

Taxable-equivalent	basis:	In	presenting	managed	results,	the	total	net	revenue for	each	of	the	business	segments	and	the	Firm	is	presented	on	a	tax-equivalent 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;	the	corresponding	income	tax	impact	related to	tax-exempt	items	is	recorded	within	income	tax	expense.

# Troubled	debt	restructuring	("TDR"):	A	TDR	is	deemed	to	occur	when	the

Firm	modifies	the	original	terms	of	a	loan	agreement	by	granting	a	concession	to a	borrower	that	is	experiencing	financial	difficulty.

Unaudited:	Financial	statements	and	information	that	have	not	been	subjected	to auditing	procedures	sufficient	to	permit	an	independent	certified	public accountant	to	express	an	opinion.

U.S.	GAAP:	Accounting	principles	generally	accepted	in	the	U.S.

U.S.	government-sponsored	enterprises	("U.S.	GSEs")	and	U.S.	GSE obligations:	In	the	U.S.,	GSEs	are	quasi-governmental,	privately-held	entities established	by	Congress	to	improve	the	flow	of	credit	to	specific	sectors	of	the economy	and	provide	certain	essential	services	to	the	public.	U.S.	GSEs	include Fannie	Mae	and	Freddie	Mac,	but	do	not	include	Ginnie	Mae,	which	is	directly owned	by	the	U.S.	Department	of	Housing	and	Urban	Development.	U.S.	GSE obligations	are	not	explicitly	guaranteed	as	to	the	timely	payment	of	principal and	interest	by	the	full	faith	and	credit	of	the	U.S.	government.

U.S.	Treasury:	U.S.	Department	of	the	Treasury.

Value-at-risk	("VaR"):	A	measure	of	the	dollar	amount	of	potential	loss	from adverse	market	moves	in	an	ordinary	market	environment.

Warehouse	loans:	Consist	of	prime	mortgages	originated	with	the	intent	to	sell that	are	accounted	for	at	fair	value	and	classified	as	trading	assets.

Washington	Mutual	transaction:	On	September	25,	2008,	JPMorgan	Chase acquired	certain	of	the	assets	of	the	banking	operations	of	Washington	Mutual Bank	("Washington	Mutual")	from	the	FDIC.

# Distribution	of	assets,	liabilities	and	stockholders'	equity;	interest	rates	and	interest	differentials

# Consolidated	average	balance	sheet,	interest	and	rates

Provided	below	is	a	summary	of	JPMorgan	Chase's	consolidated	average balances,	interest	rates	and	interest	differentials	on	a	taxable-equivalent	basis	for the	years	2013	through	2015.	Income	computed	on	a	taxable-equivalent	basis	is the	income	reported	in	the	Consolidated	statements	of	income,	adjusted	to present	interest	income

and	average	rates	earned	on	assets	exempt	from	income	taxes	(primarily	federal taxes)	on	a	basis	comparable	with	other	taxable	investments.	The	incremental	tax rate	used	for	calculating	the	taxable-equivalent	adjustment	was	approximately 38%	in	2015,	2014	and	2013.	A	substantial	portion	of	JPMorgan	Chase's securities	are	taxable.

| (Table	continued	on	next	page) |  |  | 2015 |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\n(Taxable-equivalent\tinterest\tand\trates;\tin\tmillions,\texcept\trates) | Average\nbalance |  | Interest(e) |  | Average\nrate |  |
| Assets |  |  |  |  |  |  |
| Deposits\twith\tbanks | $427,963 |  | $1,250 |  | 0.29% |  |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements | 206,637 |  | 1,592 |  | 0.77 |  |
| Securities\tborrowed | 105,273 |  | (532) | (f) | (0.50) |  |
| Trading\tassets | 206,385 |  | 6,694 |  | 3.24 |  |
| Taxable\tsecurities | 273,730 |  | 6,550 |  | 2.39 |  |
| Non-taxable\tsecurities(a) | 42,125 |  | 2,556 |  | 6.07 |  |
| Total\tsecurities | 315,855 |  | 9,106 |  | 2.88 | (h) |
| Loans | 787,318 |  | 33,321 | (g) | 4.23 |  |
| Other\tassets(b) | 38,811 |  | 652 |  | 1.68 |  |
| Total\tinterest-earning\tassets | 2,088,242 |  | 52,083 |  | 2.49 |  |
| Allowance\tfor\tloan\tlosses | (13,885) |  |  |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | 22,042 |  |  |  |  |  |
| Trading\tassets\t–\tequity\tinstruments | 105,489 |  |  |  |  |  |
| Trading\tassets\t–\tderivative\treceivables | 73,290 |  |  |  |  |  |
| Goodwill | 47,445 |  |  |  |  |  |
| Mortgage\tservicing\trights | 6,902 |  |  |  |  |  |
| Other\tintangible\tassets: |  |  |  |  |  |  |
| Purchased\tcredit\tcard\trelationships | 25 |  |  |  |  |  |
| Other\tintangibles | 1,067 |  |  |  |  |  |
| Other\tassets | 138,792 |  |  |  |  |  |
| Total\tassets | $2,469,409 |  |  |  |  |  |
| Liabilities |  |  |  |  |  |  |
| Interest-bearing\tdeposits | $872,572 |  | $1,252 |  | 0.14% |  |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements | 192,510 |  | 609 |  | 0.32 |  |
| Commercial\tpaper | 38,140 |  | 110 |  | 0.29 |  |
| (c)\nTrading\tliabilities\t–\tdebt,\tshort-term\tand\tother\tliabilities | 207,810 |  | 622 |  | 0.30 |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\tvariable\tinterest\tentities\t("VIEs") | 49,200 |  | 435 |  | 0.88 |  |
| Long-term\tdebt | 284,940 |  | 4,435 |  | 1.56 |  |
| Total\tinterest-bearing\tliabilities | 1,645,172 |  | 7,463 |  | 0.45 |  |
| Noninterest-bearing\tdeposits | 423,216 |  |  |  |  |  |
| Trading\tliabilities\t–\tequity\tinstruments | 17,282 |  |  |  |  |  |
| Trading\tliabilities\t–\tderivative\tpayables | 64,716 |  |  |  |  |  |
| All\tother\tliabilities,\tincluding\tthe\tallowance\tfor\tlending-related\tcommitments | 79,293 |  |  |  |  |  |
| Total\tliabilities | 2,229,679 |  |  |  |  |  |
| Stockholders'\tequity |  |  |  |  |  |  |
| Preferred\tstock | 24,040 |  |  |  |  |  |
| Common\tstockholders'\tequity | 215,690 |  |  |  |  |  |
| Total\tstockholders'\tequity | 239,730 | (d) |  |  |  |  |
| Total\tliabilities\tand\tstockholders'\tequity | $2,469,409 |  |  |  |  |  |
| Interest\trate\tspread |  |  |  |  | 2.04% |  |
| Net\tinterest\tincome\tand\tnet\tyield\ton\tinterest-earning\tassets |  |  | $44,620 |  | 2.14 |  |

(a) Represents	securities	which	are	tax	exempt	for	U.S.	Federal	Income	Tax purposes.

(b) Includes	margin loans.

(c) Includes	brokerage	customer	payables.

(e) Interest	includes	the	effect	of	related	hedging	derivatives.	Taxable-equivalent	amounts	are	used	where applicable.

(f) Negative	interest	income	and	yield	for	the	years	ended	December	31,	2015,	2014	and	2013,	is	the	result	of	increased	client-driven	demand	for	certain	securities	combined	with	the	impact	of	low	interest	rates;	the	offset	of	this	stock	borrow activity	is	reflected	as	lower	net	interest	expense	reported	within	short-term	and	other	liabilities.

(h) The	annualized	rate	for	securities	based	on	amortized	cost	was	2.94%	in	2015,	2.82%	in	2014,	and	2.37%	in	2013,	and	does	not	give	effect	to	changes	in	fair	value	that	are	reflected	in	accumulated	other	comprehensive income/(loss).

(i) Reflects	a	benefit	from	the	favorable	market	environments	for	dollar-roll financings.

Within	the	Consolidated	average	balance	sheets,	interest	and	rates	summary,	the	principal	amounts	of	nonaccrual	loans	have	been	included	in	the	average	loan	balances used	to	determine	the	average	interest	rate	earned	on	loans.	For	additional	information	on	nonaccrual	loans,	including	interest	accrued,	see	Note	14.

| Average<br>balance |  | 2014<br>Interest(e) |  | Average<br>rate |  | Average<br>balance |  | 2013<br>Interest(e) |  | Average<br>rate |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $358,072 |  | $1,157 |  | 0.32% |  | $268,968 |  | $918 |  | 0.34% |  |
| 230,489 |  | 1,642 |  | 0.71 |  | 231,567 |  | 1,940 |  | 0.84 |  |
| 116,540 |  | (501) | (f) | (0.43) |  | 118,300 |  | (127) | (f) | (0.11) |  |
| 210,609 |  | 7,386 |  | 3.51 |  | 227,769 |  | 8,191 |  | 3.60 |  |
| 318,970 |  | 7,617 |  | 2.39 |  | 333,285 |  | 6,916 |  | 2.07 |  |
| 34,359 |  | 2,158 |  | 6.28 |  | 23,558 |  | 1,369 |  | 5.81 |  |
| 353,329 |  | 9,775 |  | 2.77 | (h) | 356,843 |  | 8,285 |  | 2.32 | (h) |
| 739,175 |  | 32,394 | (g) | 4.38 |  | 726,450 |  | 33,621 | (g) | 4.63 |  |
| 40,879 |  | 663 |  | 1.62 |  | 40,334 |  | 538 |  | 1.33 |  |
| 2,049,093 |  | 52,516 |  | 2.56 |  | 1,970,231 |  | 53,366 |  | 2.71 |  |
| (15,418) |  |  |  |  |  | (19,819) |  |  |  |  |  |
| 25,650 |  |  |  |  |  | 35,919 |  |  |  |  |  |
| 116,650 |  |  |  |  |  | 112,680 |  |  |  |  |  |
| 67,123 |  |  |  |  |  | 72,629 |  |  |  |  |  |
| 48,029 |  |  |  |  |  | 48,102 |  |  |  |  |  |
| 8,387 |  |  |  |  |  | 8,840 |  |  |  |  |  |
| 62 |  |  |  |  |  | 214 |  |  |  |  |  |
| 1,316 |  |  |  |  |  | 1,736 |  |  |  |  |  |
| 146,343 |  |  |  |  |  | 149,058 |  |  |  |  |  |
| $2,447,235 |  |  |  |  |  | $2,379,590 |  |  |  |  |  |
| $868,838 |  | $1,633 |  | 0.19% |  | $822,781 |  | $2,067 |  | 0.25% |  |
| 208,560 |  | 604 | (i) | 0.29 | (i) | 238,551 |  | 582 | (i) | 0.24 | (i) |
| 59,916 |  | 134 |  | 0.22 |  | 53,717 |  | 112 |  | 0.21 |  |
| 220,137 |  | 712 |  | 0.32 |  | 202,894 |  | 1,104 |  | 0.54 |  |
| 47,974 |  | 405 |  | 0.84 |  | 54,798 |  | 478 |  | 0.87 |  |
| 269,814 |  | 4,409 |  | 1.63 |  | 263,603 |  | 5,007 |  | 1.90 |  |
| 1,675,239 |  | 7,897 |  | 0.47 |  | 1,636,344 |  | 9,350 |  | 0.57 |  |
| 395,463 |  |  |  |  |  | 366,361 |  |  |  |  |  |
| 16,246 |  |  |  |  |  | 14,218 |  |  |  |  |  |
| 54,758 |  |  |  |  |  | 64,553 |  |  |  |  |  |
| 81,111 |  |  |  |  |  | 90,745 |  |  |  |  |  |
| 2,222,817 |  |  |  |  |  | 2,172,221 |  |  |  |  |  |
| 17,018 |  |  |  |  |  | 10,960 |  |  |  |  |  |
| 207,400 |  |  |  |  |  | 196,409 |  |  |  |  |  |
| 224,418 | (d) |  |  |  |  | 207,369 | (d) |  |  |  |  |
| $2,447,235 |  |  |  |  |  | $2,379,590 |  |  |  |  |  |
|  |  |  |  | 2.09% |  |  |  |  |  | 2.14% |  |
|  |  | $44,619 |  | 2.18 |  |  |  | $44,016 |  | 2.23 |  |

# Interest	rates	and	interest	differential	analysis	of	net	interest	income	–	U.S.	and	non-U.S.

Presented	below	is	a	summary	of	interest	rates	and	interest	differentials segregated	between	U.S.	and	non-U.S.	operations	for	the	years	2013	through 2015.	The	segregation	of	U.S.	and	non-U.S.	components	is	based	on

the	location	of	the	office	recording	the	transaction.	Intracompany	funding generally	consists	of	dollar-denominated	deposits	originated	in	various	locations that	are	centrally	managed	by	JPMorgan	Chase's	Treasury	unit.

# (Table	continued	on	next	page)

| (Taxable-equivalent	interest	and	rates;	in	millions,	except	rates) | Average	balance | Interest |  | Average	rate |
| :--- | :--- | :--- | :--- | :--- |
| Interest-earning\tassets |  |  |  |  |
| Deposits\twith\tbanks: |  |  |  |  |
| U.S. | $388,833 | $1,021 |  | 0.26% |
| Non-U.S. | 39,130 | 229 |  | 0.59 |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements: |  |  |  |  |
| U.S. | 118,945 | 900 |  | 0.76 |
| Non-U.S. | 87,692 | 692 |  | 0.79 |
| Securities\tborrowed: |  |  |  |  |
| U.S. | 78,815 | (562) | (b) | (0.71) |
| Non-U.S. | 26,458 | 30 |  | 0.11 |
| Trading\tassets\t–\tdebt\tinstruments: |  |  |  |  |
| U.S. | 106,465 | 3,572 |  | 3.35 |
| Non-U.S. | 99,920 | 3,122 |  | 3.12 |
| Securities: |  |  |  |  |
| U.S. | 200,240 | 6,676 |  | 3.33 |
| Non-U.S. | 115,615 | 2,430 |  | 2.10 |
| Loans: |  |  |  |  |
| U.S. | 699,664 | 31,468 |  | 4.50 |
| Non-U.S. | 87,654 | 1,853 |  | 2.11 |
| Other\tassets,\tpredominantly\tU.S. | 38,811 | 652 |  | 1.68 |
| Total\tinterest-earning\tassets | 2,088,242 | 52,083 |  | 2.49 |
| Interest-bearing\tliabilities |  |  |  |  |
| Interest-bearing\tdeposits: |  |  |  |  |
| U.S. | 638,756 | 761 |  | 0.12 |
| Non-U.S. | 233,816 | 491 |  | 0.21 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements: |  |  |  |  |
| U.S. | 140,609 | 366 |  | 0.26 |
| Non-U.S. | 51,901 | 243 |  | 0.47 |
| Trading\tliabilities\t–\tdebt,\tshort-term\tand\tother\tliabilities: |  |  |  |  |
| U.S. | 166,838 | (394) | (b) | (0.24) |
| Non-U.S. | 79,112 | 1,126 |  | 1.42 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs,\tpredominantly\tU.S. | 49,200 | 435 |  | 0.88 |
| Long-term\tdebt: |  |  |  |  |
| U.S. | 273,033 | 4,386 |  | 1.61 |
| Non-U.S. | 11,907 | 49 |  | 0.41 |
| Intracompany\tfunding: |  |  |  |  |
| U.S. | (50,517) | 7 |  | — |
| Non-U.S. | 50,517 | (7) |  | — |
| Total\tinterest-bearing\tliabilities | 1,645,172 | 7,463 |  | 0.45 |
| Noninterest-bearing\tliabilities(a) | 443,070 |  |  |  |
| Total\tinvestable\tfunds | $2,088,242 | $7,463 |  | 0.36% |
| Net\tinterest\tincome\tand\tnet\tyield: |  | $44,620 |  | 2.14% |
| U.S. |  | 38,033 |  | 2.34 |
| Non-U.S. |  | 6,587 |  | 1.42 |
| Percentage\tof\ttotal\tassets\tand\tliabilities\tattributable\tto\tnon-U.S.\toperations: |  |  |  |  |
| Assets |  |  |  | 24.7 |
| Liabilities |  |  |  | 21.1 |

(a) Represents	the	amount	of	noninterest-bearing	liabilities	funding	interest-earning	assets.

(b) Negative	interest	income	and	yield,	for	the	years	ended	December	31,	2015,	2014	and	2013	is	a	result	of	increased	client-driven	demand	for	certain	securities	combined	with	the	impact	of	low	interest	rates;	the	offset of	this	stock	borrow	activity	is	reflected	as	lower	net	interest	expense	reported	within	trading	liabilities	–	debt,	short-term	and	other	liabilities.

(c) Reflects	a	benefit	from	the	favorable	market	environments	for	dollar-roll	financings.

# For	further	information,	see	the	"Net	interest	income"	discussion	in

# Consolidated	Results	of	Operations	on	pages	72–74.

| Average	balance | 2014<br>Interest |  | Average	rate |  | Average	balance | 2013<br>Interest |  | Average	rate |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $328,145 | $825 |  | 0.25% |  | $233,850 | $572 |  | 0.24% |
| 29,927 | 332 |  | 1.11 |  | 35,118 | 346 |  | 0.99 |
| 125,812 | 719 |  | 0.57 |  | 129,600 | 793 |  | 0.61 |
| 104,677 | 923 |  | 0.88 |  | 101,967 | 1,147 |  | 1.13 |
| 77,228 | (573) | (b) | (0.74) |  | 69,377 | (376) | (b) | (0.54) |
| 39,312 | 72 |  | 0.18 |  | 48,923 | 249 |  | 0.51 |
| 109,678 | 4,045 |  | 3.69 |  | 120,985 | 4,301 |  | 3.56 |
| 100,931 | 3,341 |  | 3.31 |  | 106,784 | 3,890 |  | 3.64 |
| 193,856 | 6,586 |  | 3.40 |  | 170,473 | 4,795 |  | 2.81 |
| 159,473 | 3,189 |  | 2.00 |  | 186,370 | 3,490 |  | 1.87 |
| 635,846 | 30,165 |  | 4.74 |  | 617,043 | 31,235 |  | 5.06 |
| 103,329 | 2,229 |  | 2.16 |  | 109,407 | 2,386 |  | 2.18 |
| 40,879 | 663 |  | 1.62 |  | 40,334 | 538 |  | 1.33 |
| 2,049,093 | 52,516 |  | 2.56 |  | 1,970,231 | 53,366 |  | 2.71 |
| 620,708 | 813 |  | 0.13 |  | 582,282 | 1,067 |  | 0.18 |
| 248,130 | 820 |  | 0.33 |  | 240,499 | 1,000 |  | 0.42 |
| 146,025 | 130 | (c) | 0.09 | (c) | 161,256 | 103 | (c) | 0.06 |
| 62,535 | 474 |  | 0.76 |  | 77,295 | 479 |  | 0.62 |
| 194,771 | (284) | (b) | (0.15) |  | 176,870 | 5 | (b) | — |
| 85,282 | 1,130 |  | 1.33 |  | 79,741 | 1,211 |  | 1.52 |
| 47,974 | 405 |  | 0.84 |  | 54,798 | 478 |  | 0.87 |
| 256,726 | 4,366 |  | 1.70 |  | 250,477 | 4,949 |  | 1.98 |
| 13,088 | 43 |  | 0.33 |  | 13,126 | 58 |  | 0.45 |
| (122,467) | (176) |  | — |  | (181,109) | (339) |  | — |
| 122,467 | 176 |  | — |  | 181,109 | 339 |  | — |
| 1,675,239 | 7,897 |  | 0.47 |  | 1,636,344 | 9,350 |  | 0.57 |
| 373,854 |  |  |  |  | 333,887 |  |  |  |
| $2,049,093 | $7,897 |  | 0.39% |  | $1,970,231 | $9,350 |  | 0.47% |
|  | 44,619 |  | 2.18% |  |  | 44,016 |  | 2.23% |
|  | 37,018 |  | 2.46 |  |  | 35,492 |  | 2.59 |
|  | 7,601 |  | 1.39 |  |  | 8,524 |  | 1.42 |
|  |  |  | 28.9 |  |  |  |  | 32.6 |
|  |  |  | 22.6 |  |  |  |  | 23.5 |

# Changes	in	net	interest	income,	volume	and	rate	analysis

The	table	below	presents	an	analysis	of	the	effect	on	net	interest	income	of	volume	and	rate	changes	for	the	periods	2015	versus	2014	and	2014	versus	2013.	In	this analysis,	when	the	change	cannot	be	isolated	to	either	volume	or	rate,	it	has	been	allocated	to	volume.

|  | 2015	versus	2014 | 2015	versus	2014 |  | 2014	versus	2013 | 2014	versus	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Increase/(decrease)\tdue\tto\tchange\nin: | Increase/(decrease)\tdue\tto\tchange\nin: |  | Increase/(decrease)\tdue\tto\tchange\nin: | Increase/(decrease)\tdue\tto\tchange\nin: |  |
| Year\tended\tDecember\t31,\n(On\ta\ttaxable-equivalent\tbasis:\tin\tmillions) | Volume | Rate | Net\nchange | Volume | Rate | Net\nchange |
| Interest-earning\tassets |  |  |  |  |  |  |
| Deposits\twith\tbanks: |  |  |  |  |  |  |
| U.S. | $163 | $33 | $196 | $230 | $23 | $253 |
| Non-U.S. | 53 | (156) | (103) | (56) | 42 | (14) |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements: |  |  |  |  |  |  |
| U.S. | (58) | 239 | 181 | (22) | (52) | (74) |
| Non-U.S. | (137) | (94) | (231) | 31 | (255) | (224) |
| Securities\tborrowed: |  |  |  |  |  |  |
| U.S. | (12) | 23 | 11 | (58) | (139) | (197) |
| Non-U.S. | (14) | (28) | (42) | (16) | (161) | (177) |
| Trading\tassets\t–\tdebt\tinstruments: |  |  |  |  |  |  |
| U.S. | (100) | (373) | (473) | (413) | 157 | (256) |
| Non-U.S. | (27) | (192) | (219) | (197) | (352) | (549) |
| Securities: |  |  |  |  |  |  |
| U.S. | 226 | (136) | 90 | 785 | 1,006 | 1,791 |
| Non-U.S. | (918) | 159 | (759) | (543) | 242 | (301) |
| Loans: |  |  |  |  |  |  |
| U.S. | 2,829 | (1,526) | 1,303 | 905 | (1,975) | (1,070) |
| Non-U.S. | (324) | (52) | (376) | (135) | (22) | (157) |
| Other\tassets,\tpredominantly\tU.S. | (36) | 25 | (11) | 8 | 117 | 125 |
| Change\tin\tinterest\tincome | 1,645 | (2,078) | (433) | 519 | (1,369) | (850) |
| Interest-bearing\tliabilities |  |  |  |  |  |  |
| Interest-bearing\tdeposits: |  |  |  |  |  |  |
| U.S. | 10 | (62) | (52) | 37 | (291) | (254) |
| Non-U.S. | (31) | (298) | (329) | 36 | (216) | (180) |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\nagreements: |  |  |  |  |  |  |
| U.S. | (12) | 248 | 236 | (21) | 48 | 27 |
| Non-U.S. | (50) | (181) | (231) | (113) | 108 | (5) |
| Trading\tliabilities\t–\tdebt,\tshort-term\tand\tother\tliabilities |  |  |  |  |  |  |
| U.S. | 66 | (176) | (110) | (27) | (262) | (289) |
| Non-U.S. | (81) | 77 | (4) | 71 | (152) | (81) |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs,\tpredominantly\tU.S. | 11 | 19 | 30 | (57) | (16) | (73) |
| Long-term\tdebt: |  |  |  |  |  |  |
| U.S. | 251 | (231) | 20 | 118 | (701) | (583) |
| Non-U.S. | (4) | 10 | 6 | 1 | (16) | (15) |
| Intercompany\tfunding: |  |  |  |  |  |  |
| U.S. | (1) | 184 | 183 | 72 | 91 | 163 |
| Non-U.S. | 1 | (184) | (183) | (72) | (91) | (163) |
| Change\tin\tinterest\texpense | 160 | (594) | (434) | 45 | (1,498) | (1,453) |
| Change\tin\tnet\tinterest\tincome | $1,485 | $(1,484) | $1 | $474 | $129 | $603 |

# Securities	portfolio

For	information	regarding	the	securities	portfolio	as	of	December	31,	2015	and	2014,	and	for	the	years	ended	December	31,	2015	and	2014,	see	Note	12.	For	the available–for–sale	securities	portfolio,	at	December	31,	2013,	the	fair	value	and	amortized	cost	of	U.S.	Treasury	and	government	agency	obligations	was	$99.2	billion	and $97.7	billion,	respectively;	the	fair	value	and	amortized	cost	of	all	other	available–for–sale	securities	was	$230.8	billion	and	$227.7	billion,	respectively;	and	the	total	fair value	and	amortized	cost	of	the	total	available–for–sale	securities	portfolio	was	$330.0	billion	and	$325.4	billion,	respectively.

At	December	31,	2013,	the	fair	value	and	amortized	cost	of	U.S.	Treasury	and	government	agency	obligations	in	the	held-to-maturity	securities	portfolio	was	$22.8	billion and	$23.1	billion,	respectively;	the	fair	value	and	amortized	cost	of	all	other	held-to-maturity	securities	was	$920	million;	and	the	total	fair	value	and	amortized	cost	of	the total	held-to-maturity	securities	portfolio	was	$23.7	billion	and	$24.0	billion,	respectively.

The	table	below	presents	loans	by	portfolio	segment	and	loan	class	that	are	presented	in	Credit	Risk	Management	on	page	114,	pages	115–121	and	page	122,	and	in	Note 14,	at	the	periods	indicated.

| December	31,	(in	millions) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| U.S.\tconsumer,\texcluding\tcredit\tcard\tloans |  |  |  |  |  |
| Home\tequity | $60,548 | $69,837 | $76,790 | $88,356 | $100,497 |
| Mortgage | 192,714 | 139,973 | 129,008 | 123,277 | 128,709 |
| Auto | 60,255 | 54,536 | 52,757 | 49,913 | 47,426 |
| Other | 31,304 | 31,028 | 30,508 | 31,074 | 31,795 |
| Total\tU.S.\tconsumer,\texcluding\tcredit\tcard\tloans | 344,821 | 295,374 | 289,063 | 292,620 | 308,427 |
| Credit\tcard\tLoans |  |  |  |  |  |
| U.S.\tcredit\tcard\tloans | 131,132 | 129,067 | 125,308 | 125,277 | 129,587 |
| Non-U.S.\tcredit\tcard\tloans | 331 | 1,981 | 2,483 | 2,716 | 2,690 |
| Total\tcredit\tcard\tloans | 131,463 | 131,048 | 127,791 | 127,993 | 132,277 |
| Total\tconsumer\tloans | 476,284 | 426,422 | 416,854 | 420,613 | 440,704 |
| U.S.\twholesale\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | 83,739 | 78,664 | 79,436 | 77,900 | 65,958 |
| Real\testate | 90,836 | 77,022 | 67,815 | 59,369 | 53,230 |
| Financial\tinstitutions | 12,708 | 13,743 | 11,087 | 10,708 | 8,489 |
| Government\tagencies | 9,838 | 7,574 | 8,316 | 7,962 | 7,236 |
| Other | 67,925 | 49,838 | 48,158 | 50,948 | 52,126 |
| Total\tU.S.\twholesale\tloans | 265,046 | 226,841 | 214,812 | 206,887 | 187,039 |
| Non-U.S.\twholesale\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | 30,385 | 34,782 | 36,447 | 36,674 | 31,108 |
| Real\testate | 4,577 | 2,224 | 1,621 | 1,757 | 1,748 |
| Financial\tinstitutions | 17,188 | 21,099 | 22,813 | 26,564 | 30,262 |
| Government\tagencies | 1,788 | 1,122 | 2,146 | 1,586 | 583 |
| Other | 42,031 | 44,846 | 43,725 | 39,715 | 32,276 |
| Total\tnon-U.S.\twholesale\tloans | 95,969 | 104,073 | 106,752 | 106,296 | 95,977 |
| Total\twholesale\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | 114,124 | 113,446 | 115,883 | 114,574 | 97,066 |
| Real\testate | 95,413 | 79,246 | 69,436 | 61,126 | 54,978 |
| Financial\tinstitutions | 29,896 | 34,842 | 33,900 | 37,272 | 38,751 |
| Government\tagencies | 11,626 | 8,696 | 10,462 | 9,548 | 7,819 |
| Other | 109,956 | 94,684 | 91,883 | 90,663 | 84,402 |
| Total\twholesale\tloans | 361,015 | 330,914 | 321,564 | 313,183 | 283,016 |
| Total\tloans(a) | $837,299 | $757,336 | $738,418 | $733,796 | $723,720 |
| Memo: |  |  |  |  |  |
| Loans\theld-for-sale | $1,646 | $7,217 | $12,230 | $4,406 | $2,626 |
| Loans\tat\tfair\tvalue | 2,861 | 2,611 | 2,011 | 2,555 | 2,097 |
| Total\tloans\theld-for-sale\tand\tloans\tat\tfair\tvalue | $4,507 | $9,828 | $14,241 | $6,961 | $4,723 |

(a) Loans	(other	than	purchased	credit-impaired	loans	and	those	for	which	the	fair	value	option	have	been	elected)	are	presented	net	of	unearned	income,	unamortized	discounts	and	premiums,	and	net deferred	loan	costs.	These	amounts	were	not	material	as	of	December	31,	2015,	2014,	2013,	2012	and	2011.

# Maturities	and	sensitivity	to	changes	in	interest	rates

The	table	below	sets	forth,	at	December	31,	2015,	wholesale	loan	maturity	and	distribution	between	fixed	and	floating	interest	rates	based	on	the	stated	terms	of	the	loan agreements.	The	table	below	also	presents	loans	by	loan	class	that	are	presented	in	Wholesale	credit	portfolio	on	pages	122–129	and	Note	14.	The	table	does	not	include the	impact	of	derivative	instruments.

| December	31,	2015	(in	millions) | Within<br>1	year	(a) | 1-5<br>years | After	5<br>years | Total |
| :--- | :--- | :--- | :--- | :--- |
| U.S. |  |  |  |  |
| Commercial\tand\tindustrial | $13,641 | $57,210 | $12,888 | $83,739 |
| Real\testate | 7,173 | 19,823 | 63,840 | 90,836 |
| Financial\tinstitutions | 8,093 | 4,044 | 571 | 12,708 |
| Government\tagencies | 1,040 | 3,140 | 5,658 | 9,838 |
| Other | 24,196 | 41,795 | 1,934 | 67,925 |
| Total\tU.S. | 54,143 | 126,012 | 84,891 | 265,046 |
| Non-U.S. |  |  |  |  |
| Commercial\tand\tindustrial | 9,061 | 15,913 | 5,411 | 30,385 |
| Real\testate | 1,895 | 2,626 | 56 | 4,577 |
| Financial\tinstitutions | 13,114 | 4,072 | 2 | 17,188 |
| Government\tagencies | 803 | 252 | 733 | 1,788 |
| Other | 32,901 | 8,532 | 598 | 42,031 |
| Total\tnon-U.S. | 57,774 | 31,395 | 6,800 | 95,969 |
| Total\twholesale\tloans | $111,917 | $157,407 | $91,691 | $361,015 |
| Loans\tat\tfixed\tinterest\trates |  | $8,982 | $62,274 |  |
| Loans\tat\tvariable\tinterest\trates |  | 148,425 | 29,417 |  |
| Total\twholesale\tloans |  | $157,407 | $91,691 |  |

# (a) Includes	demand	loans	and	overdrafts.

# Risk	elements

The	following	tables	set	forth	nonperforming	assets,	contractually	past-due	assets,	and	accruing	restructured	loans	by	portfolio	segment	and	loan	class	that	are	presented in	Credit	Risk	Management	on	page	114,	pages	115–116	and	page	122,	at	the	periods	indicated.

| December	31,	(in	millions) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Nonperforming\tassets |  |  |  |  |  |
| U.S.\tnonaccrual\tloans: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | $5,413 | $6,509 | $7,496 | $9,174 | $7,411 |
| Credit\tcard\tloans | — | — | — | 1 | 1 |
| Total\tU.S.\tnonaccrual\tconsumer\tloans | 5,413 | 6,509 | 7,496 | 9,175 | 7,412 |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 315 | 184 | 317 | 702 | 936 |
| Real\testate | 175 | 237 | 338 | 520 | 886 |
| Financial\tinstitutions | 4 | 12 | 19 | 60 | 76 |
| Government\tagencies | — | — | 1 | — | — |
| Other | 86 | 59 | 97 | 153 | 234 |
| Total\tU.S.\twholesale\tnonaccrual\tloans | 580 | 492 | 772 | 1,435 | 2,132 |
| Total\tU.S.\tnonaccrual\tloans | 5,993 | 7,001 | 8,268 | 10,610 | 9,544 |
| Non-U.S.\tnonaccrual\tloans: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | — | — | — | — | — |
| Credit\tcard\tloans | — | — | — | — | — |
| Total\tnon-U.S.\tnonaccrual\tconsumer\tloans | — | — | — | — | — |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 314 | 21 | 116 | 131 | 79 |
| Real\testate | 63 | 23 | 88 | 89 | — |
| Financial\tinstitutions | 6 | 7 | 8 | — | — |
| Government\tagencies | — | — | — | 5 | 16 |
| Other | 53 | 81 | 60 | 57 | 354 |
| Total\tnon-U.S.\twholesale\tnonaccrual\tloans | 436 | 132 | 272 | 282 | 449 |
| Total\tnon-U.S.\tnonaccrual\tloans | 436 | 132 | 272 | 282 | 449 |
| Total\tnonaccrual\tloans | 6,429 | 7,133 | 8,540 | 10,892 | 9,993 |
| Derivative\treceivables | 204 | 275 | 415 | 239 | 297 |
| Assets\tacquired\tin\tloan\tsatisfactions | 401 | 559 | 751 | 775 | 1,025 |
| Nonperforming\tassets | $7,034 | $7,967 | $9,706 | $11,906 | $11,315 |
| Memo: |  |  |  |  |  |
| Loans\theld-for-sale | $101 | $95 | $26 | $18 | $110 |
| Loans\tat\tfair\tvalue | 25 | 21 | 197 | 265 | 73 |
| Total\tloans\theld-for-sale\tand\tloans\tat\tfair\tvalue | $126 | $116 | $223 | $283 | $183 |

| December	31,	(in	millions) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Contractually\tpast-due\tloans(a) |  |  |  |  |  |
| U.S.\tloans: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | $290 | $367 | $428 | $525 | $551 |
| Credit\tcard\tloans | 944 | 893 | 997 | 1,268 | 1,867 |
| Total\tU.S.\tconsumer\tloans | 1,234 | 1,260 | 1,425 | 1,793 | 2,418 |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 6 | 14 | 14 | 19 | — |
| Real\testate | 15 | 33 | 14 | 69 | 84 |
| Financial\tinstitutions | 1 | — | — | 6 | 2 |
| Government\tagencies | 6 | — | — | — | — |
| Other | 28 | 26 | 16 | 30 | 6 |
| Total\tU.S.\twholesale\tloans | 56 | 73 | 44 | 124 | 92 |
| Total\tU.S.\tloans | 1,290 | 1,333 | 1,469 | 1,917 | 2,510 |
| Non-U.S.\tloans: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | — | — | — | — | — |
| Credit\tcard\tloans | — | 2 | 25 | 34 | 36 |
| Total\tnon-U.S.\tconsumer\tloans | — | 2 | 25 | 34 | 36 |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 1 | — | — | — | — |
| Real\testate | — | — | — | — | — |
| Financial\tinstitutions | 10 | — | 6 | — | — |
| Government\tagencies | — | — | — | — | — |
| Other | — | 3 | — | 14 | 8 |
| Total\tnon-U.S.\twholesale\tloans | 11 | 3 | 6 | 14 | 8 |
| Total\tnon-U.S.\tloans | 11 | 5 | 31 | 48 | 44 |
| Total\tcontractually\tpast\tdue\tloans | $1,301 | $1,338 | $1,500 | $1,965 | $2,554 |

(a) Represents	accruing	loans	past-due	90	days	or	more	as	to	principal	and	interest,	which	are	not	characterized	as	nonaccrual	loans.

| December	31,	(in	millions) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Accruing\trestructured\tloans(a) |  |  |  |  |  |
| U.S.: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | $5,980 | $7,814 | $9,173 | $9,033 | $7,310 |
| Credit\tcard\tloans(b) | 1,465 | 2,029 | 3,115 | 4,762 | 7,214 |
| Total\tU.S.\tconsumer\tloans | 7,445 | 9,843 | 12,288 | 13,795 | 14,524 |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 12 | 10 | — | 29 | 68 |
| Real\testate | 28 | 31 | 27 | 7 | 48 |
| Financial\tinstitutions | — | — | — | — | 2 |
| Other | — | 1 | 3 | — | 6 |
| Total\tU.S.\twholesale\tloans | 40 | 42 | 30 | 36 | 124 |
| Total\tU.S. | 7,485 | 9,885 | 12,318 | 13,831 | 14,648 |
| Non-U.S.: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | — | — | — | — | — |
| Credit\tcard\tloans(b) | — | — | — | — | — |
| Total\tnon-U.S.\tconsumer\tloans | — | — | — | — | — |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | — | — | — | 24 | 48 |
| Real\testate | — | — | — | — | — |
| Other | — | — | — | — | — |
| Total\tnon-U.S.\twholesale\tloans | — | — | — | 24 | 48 |
| Total\tnon-U.S. | — | — | — | 24 | 48 |
| Total\taccruing\trestructured\tnotes | $7,485 | $9,885 | $12,318 | $13,855 | $14,696 |

(a) Represents	performing	loans	modified	in	troubled	debt	restructurings	in	which	an	economic	concession	was	granted	by	the	Firm	and	the	borrower	has	demonstrated	its	ability	to	repay	the	loans according	to	the	terms	of	the	restructuring.	As	defined	in	U.S.	GAAP,	concessions	include	the	reduction	of	interest	rates	or	the	deferral	of	interest	or	principal	payments,	resulting	from	deterioration in	the	borrowers'	financial	condition.	Excludes	nonaccrual	assets	and	contractually	past-due	assets,	which	are	included	in	the	sections	above.

(b) Includes	credit	card	loans	that	have	been	modified	in	a	troubled	debt	restructuring.

For	a	discussion	of	nonaccrual	loans,	past-due	loan	accounting	policies,	and	accruing	restructured	loans	see	Credit	Risk	Management	on	pages	112–132,	and	Note	14.

# Impact	of	nonaccrual	loans	and	accruing	restructured	loans	on	interest	income

The	negative	impact	on	interest	income	from	nonaccrual	loans	represents	the	difference	between	the	amount	of	interest	income	that	would	have	been	recorded	on	such nonaccrual	loans	according	to	their	original	contractual	terms	had	they	been	performing	and	the	amount	of	interest	that	actually	was	recognized	on	a	cash	basis.	The negative	impact	on	interest	income	from	accruing	restructured	loans	represents	the	difference	between	the	amount	of	interest	income	that	would	have	been	recorded	on such	loans	according	to	their	original	contractual	terms	and	the	amount	of	interest	that	actually	was	recognized	under	the	modified	terms.	The	following	table	sets	forth this	data	for	the	years	specified.	The	change	in	foregone	interest	income	from	2013	through	2015	was	primarily	driven	by	the	change	in	the	levels	of	nonaccrual	loans.

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Nonaccrual\tloans |  |  |  |
| U.S.: |  |  |  |
| Consumer,\texcluding\tcredit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | $513 | $563 | $719 |
| Interest\tthat\twas\trecognized\tin\tincome | (225) | (268) | (298) |
| Total\tU.S.\tconsumer,\texcluding\tcredit\tcard | 288 | 295 | 421 |
| Credit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | — | — |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | — |
| Total\tU.S.\tcredit\tcard | — | — | — |
| Total\tU.S.\tconsumer | 288 | 295 | 421 |
| Wholesale: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | 24 | 28 | 29 |
| Interest\tthat\twas\trecognized\tin\tincome | (10) | (9) | (9) |
| Total\tU.S.\twholesale | 14 | 19 | 20 |
| Negative\timpact\t—\tU.S. | 302 | 314 | 441 |
| Non-U.S.: |  |  |  |
| Consumer,\texcluding\tcredit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | — | — |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | — |
| Total\tnon-U.S.\tconsumer,\texcluding\tcredit\tcard | — | — | — |
| Credit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | — | — |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | — |
| Total\tnon-U.S.\tcredit\tcard | — | — | — |
| Total\tnon-U.S.\tconsumer | — | — | — |
| Wholesale: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | 13 | 7 | 36 |
| Interest\tthat\twas\trecognized\tin\tincome | (6) | — | — |
| Total\tnon-U.S.\twholesale | 7 | 7 | 36 |
| Negative\timpact\t—\tnon-U.S. | 7 | 7 | 36 |
| Total\tnegative\timpact\ton\tinterest\tincome | $309 | $321 | $477 |

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Accruing\trestructured\tloans |  |  |  |
| U.S.: |  |  |  |
| Consumer,\texcluding\tcredit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | $485 | $629 | $758 |
| Interest\tthat\twas\trecognized\tin\tincome | (286) | (339) | (395) |
| Total\tU.S.\tconsumer,\texcluding\tcredit\tcard | 199 | 290 | 363 |
| Credit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | 260 | 377 | 602 |
| Interest\tthat\twas\trecognized\tin\tincome | (82) | (123) | (198) |
| Total\tU.S.\tcredit\tcard | 178 | 254 | 404 |
| Total\tU.S.\tconsumer | 377 | 544 | 767 |
| Wholesale: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | 2 | — | 1 |
| Interest\tthat\twas\trecognized\tin\tincome | (2) | — | (1) |
| Total\tU.S.\twholesale | — | — | — |
| Negative\timpact\t—\tU.S. | 377 | 544 | 767 |
| Non-U.S.: |  |  |  |
| Consumer,\texcluding\tcredit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | — | — |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | — |
| Total\tnon-U.S.\tconsumer,\texcluding\tcredit\tcard | — | — | — |
| Credit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | — | — |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | — |
| Total\tnon-U.S.\tcredit\tcard | — | — | — |
| Total\tnon-U.S.\tconsumer | — | — | — |
| Wholesale: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | — | — |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | — |
| Total\tnon-U.S.\twholesale | — | — | — |
| Negative\timpact\t—\tnon-U.S. | — | — | — |
| Total\tnegative\timpact\ton\tinterest\tincome | $377 | $544 | $767 |

# Cross-border	outstandings

Cross-border	disclosure	is	based	on	the	Federal	Financial	Institutions Examination	Council's	("FFIEC")	guidelines	governing	the	determination	of cross-border	risk.

The	reporting	of	country	exposure	under	the	FFIEC	bank	regulatory requirements	provides	information	on	the	distribution,	by	country	and	sector,	of claims	on,	and	liabilities	to,	foreign	residents	held	by	U.S.	banks	and	bank holding	companies	and	is	used	by	the	regulatory	agencies	to	determine	the presence	of	credit	and	related	risks,

including	transfer	and	country	risk.	Country	location	under	the	FFIEC	bank regulatory	reporting	is	based	on	where	the	entity	or	counterparty	is	legally established.

JPMorgan	Chase's	total	cross-border	exposure	tends	to	fluctuate	greatly,	and	the amount	of	exposure	at	year-end	tends	to	be	a	function	of	timing	rather	than representing	a	consistent	trend.	For	a	further	discussion	of	JPMorgan	Chase's country	risk	exposure,	see	Country	Risk	Management	on	pages	140–141.

The	following	table	lists	all	countries	in	which	JPMorgan	Chase's	cross-border	outstandings	exceed	0.75%	of	consolidated	assets	as	of	the	dates	specified.

# Cross-border	outstandings	exceeding	0.75%	of	total	assets(a)

| (in	millions) | December	31, | Governments | Banks | Other(b) | Net	local<br>country<br>assets | Total	cross-border<br>outstandings(c) | Commitments(d) | Total	exposure |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Cayman\tIslands | 2015 | $— | $153 | $76,160 | $35 | $76,348 | $12,708 | $89,056 |
|  | 2014 | 2 | 199 | 73,708 | 115 | 74,024 | 25,886 | 99,910 |
|  | 2013 | 9 | 232 | 70,006 | — | 70,247 | 21,928 | 92,175 |
| France | 2015 | $9,139 | $5,780 | $21,199 | $2,890 | $39,008 | $127,159 | $166,167 |
|  | 2014 | 13,544 | 8,670 | 23,254 | 2,222 | 47,690 | 188,703 | 236,393 |
|  | 2013 | 10,512 | 12,448 | 38,415 | 2,486 | 63,861 | 235,173 | 299,034 |
| Japan | 2015 | $367 | $12,556 | $3,972 | $29,348 | $46,243 | $47,069 | $93,312 |
|  | 2014 | 522 | 11,211 | 3,922 | 24,257 | 39,912 | 67,480 | 107,392 |
|  | 2013 | 957 | 16,286 | 12,972 | 30,811 | 61,026 | 60,310 | 121,336 |
| Germany | 2015 | $19,817 | $2,028 | $8,455 | $— | $30,300 | $106,104 | $136,404 |
|  | 2014 | 22,772 | 4,524 | 8,522 | — | 35,818 | 173,121 | 208,939 |
|  | 2013 | 25,514 | 4,078 | 7,057 | — | 36,649 | 214,375 | 251,024 |
| Netherlands | 2015 | $1,717 | $1,688 | $10,736 | $— | $14,141 | $52,029 | $66,170 |
|  | 2014 | 1,551 | 3,157 | 24,792 | — | 29,500 | 86,039 | 115,539 |
|  | 2013 | 1,024 | 4,349 | 32,765 | — | 38,138 | 97,797 | 135,935 |
| Italy | 2015 | $12,313 | $3,618 | $6,331 | $732 | $22,994 | $89,712 | $112,706 |
|  | 2014 | 14,297 | 5,293 | 5,221 | 550 | 25,361 | 128,269 | 153,630 |
|  | 2013 | 10,302 | 4,440 | 5,643 | 1,524 | 21,909 | 135,711 | 157,620 |
| Ireland | 2015 | $67 | $952 | $12,436 | $— | $13,455 | $8,024 | $21,479 |
|  | 2014 | 131 | 4,007 | 13,613 | — | 17,751 | 12,734 | 30,485 |
|  | 2013 | 99 | 4,175 | 13,878 | — | 18,152 | 11,709 | 29,861 |
| Spain | 2015 | $2,385 | $4,704 | $4,629 | $887 | $12,605 | $45,838 | $58,443 |
|  | 2014 | 1,887 | 6,290 | 4,458 | 79 | 12,714 | 71,501 | 84,215 |
|  | 2013 | 2,549 | 9,332 | 9,543 | 217 | 21,641 | 80,137 | 101,778 |

(a) Prior	periods	were	revised	to	conform	with	the	current	presentation.

(b) Consists	primarily	of	commercial	and	industrial.

(c) Outstandings	include	loans	and	accrued	interest	receivable,	interest-bearing	deposits	with	banks,	acceptances,	resale	agreements,	other	monetary	assets,	cross-border	trading	debt	and	equity instruments,	fair	value	of	foreign	exchange	and	derivative	contracts,	and	local	country	assets,	net	of	local	country	liabilities.	The	amounts	associated	with	foreign	exchange	and	derivative	contracts are	presented	after	taking	into	account	the	impact	of	legally	enforceable	master	netting	agreements.

(d) Commitments	include	outstanding	letters	of	credit,	undrawn	commitments	to	extend	credit,	and	the	gross	notional	value	of	credit	derivatives	where

JPMorgan	Chase	is	a	protection	seller.

# Summary	of	loan	and	lending-related	commitments	loss	experience

The	tables	below	summarize	the	changes	in	the	allowance	for	loan	losses	and	the	allowance	for	lending-related	commitments	during	the	periods	indicated.	For	a	further discussion,	see	Allowance	for	credit	losses	on	pages	130–132,	and	Note	15.

| Year	ended	December	31,	(in	millions) | 2015 | 2014 | 2013 | 2012 | 2011 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $14,185 | $16,264 | $21,936 | $27,609 | $32,266 |
| U.S.\tcharge-offs |  |  |  |  |  |
| U.S.\tconsumer,\texcluding\tcredit\tcard | 1,658 | 2,132 | 2,754 | 4,805 | 5,419 |
| U.S.\tcredit\tcard | 3,475 | 3,682 | 4,358 | 5,624 | 8,017 |
| Total\tU.S.\tconsumer\tcharge-offs | 5,133 | 5,814 | 7,112 | 10,429 | 13,436 |
| U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 63 | 44 | 150 | 131 | 197 |
| Real\testate | 6 | 14 | 51 | 114 | 221 |
| Financial\tinstitutions | 5 | 14 | 1 | 8 | 102 |
| Government\tagencies | — | 25 | 1 | — | — |
| Other | 6 | 22 | 9 | 56 | 149 |
| Total\tU.S.\twholesale\tcharge-offs | 80 | 119 | 212 | 309 | 669 |
| Total\tU.S.\tcharge-offs | 5,213 | 5,933 | 7,324 | 10,738 | 14,105 |
| Non-U.S.\tcharge-offs |  |  |  |  |  |
| Non-U.S.\tconsumer,\texcluding\tcredit\tcard | — | — | — | — | — |
| Non-U.S.\tcredit\tcard | 13 | 149 | 114 | 131 | 151 |
| Total\tnon-U.S.\tconsumer\tcharge-offs | 13 | 149 | 114 | 131 | 151 |
| Non-U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 5 | 27 | 5 | 8 | 1 |
| Real\testate | — | 4 | 11 | 6 | 142 |
| Financial\tinstitutions | — | — | — | — | 6 |
| Government\tagencies | — | — | — | 4 | — |
| Other | 10 | 1 | 13 | 19 | 98 |
| Total\tnon-U.S.\twholesale\tcharge-offs | 15 | 32 | 29 | 37 | 247 |
| Total\tnon-U.S.\tcharge-offs | 28 | 181 | 143 | 168 | 398 |
| Total\tcharge-offs | 5,241 | 6,114 | 7,467 | 10,906 | 14,503 |
| U.S.\trecoveries |  |  |  |  |  |
| U.S.\tconsumer,\texcluding\tcredit\tcard | (704) | (814) | (847) | (508) | (547) |
| U.S.\tcredit\tcard | (364) | (383) | (568) | (782) | (1,211) |
| Total\tU.S.\tconsumer\trecoveries | (1,068) | (1,197) | (1,415) | (1,290) | (1,758) |
| U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | (32) | (49) | (27) | (335) | (60) |
| Real\testate | (20) | (27) | (56) | (64) | (93) |
| Financial\tinstitutions | (8) | (12) | (90) | (37) | (207) |
| Government\tagencies | (8) | — | — | (2) | — |
| Other | (3) | (36) | (6) | (21) | (36) |
| Total\tU.S.\twholesale\trecoveries | (71) | (124) | (179) | (459) | (396) |
| Total\tU.S.\trecoveries | (1,139) | (1,321) | (1,594) | (1,749) | (2,154) |
| Non-U.S.\trecoveries |  |  |  |  |  |
| Non-U.S.\tconsumer,\texcluding\tcredit\tcard | — | — | — | — | — |
| Non-U.S.\tcredit\tcard | (2) | (19) | (25) | (29) | (32) |
| Total\tnon-U.S.\tconsumer\trecoveries | (2) | (19) | (25) | (29) | (32) |
| Non-U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | (10) | — | (29) | (16) | (14) |
| Real\testate | — | — | — | (2) | (14) |
| Financial\tinstitutions | (2) | (14) | (10) | (7) | (38) |
| Government\tagencies | — | — | — | — | — |
| Other | (2) | (1) | (7) | (40) | (14) |
| Total\tnon-U.S.\twholesale\trecoveries | (14) | (15) | (46) | (65) | (80) |
| Total\tnon-U.S.\trecoveries | (16) | (34) | (71) | (94) | (112) |
| Total\trecoveries | (1,155) | (1,355) | (1,665) | (1,843) | (2,266) |
| Net\tcharge-offs | 4,086 | 4,759 | 5,802 | 9,063 | 12,237 |
| Write-offs\tof\tpurchased\tcredit-impaired\t("PCI")\tloans(a) | 208 | 533 | 53 | — | — |
| Provision\tfor\tloan\tlosses | 3,663 | 3,224 | 188 | 3,387 | 7,612 |
| Other | 1 | (11) | (5) | 3 | (32) |
| Balance\tat\tyear-end | $13,555 | $14,185 | $16,264 | $21,936 | $27,609 |

# Allowance	for	lending-related	commitments

(b) The	allowance	for	loan	losses	as	a	percentage	of	retained	loans	declined	from	 2011	to	2015,	due	to	an	improvement	in	credit	quality	of	the	consumer	and	wholesale	credit	portfolios.	For	a	more detailed	discussion	of	the	2013	through	2015	provision	for	credit	losses,	see	Provision	for	credit	losses	on	 page	132.

The	following	table	provides	a	summary	of	the	average	balances	and	average	interest	rates	of	JPMorgan	Chase's	various	deposits	for	the	years	indicated.

| Year	ended	December	31, |  | Average	balances |  |  | Average	interest	rates |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tinterest\trates) | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 |
| U.S.\toffices |  |  |  |  |  |  |
| Noninterest-bearing | $403,143 | $376,947 | $346,765 | —% | —% | —% |
| Interest-bearing |  |  |  |  |  |  |
| Demand | 78,516 | 75,553 | 63,045 | 0.11 | 0.10 | 0.09 |
| Savings | 475,142 | 459,186 | 429,289 | 0.07 | 0.10 | 0.13 |
| Time | 85,098 | 86,007 | 89,948 | 0.38 | 0.35 | 0.51 |
| Total\tinterest-bearing\tdeposits | 638,756 | 620,746 | 582,282 | 0.12 | 0.13 | 0.18 |
| Total\tdeposits\tin\tU.S.\toffices | 1,041,899 | 997,693 | 929,047 | 0.07 | 0.08 | 0.11 |
| Non-U.S.\toffices |  |  |  |  |  |  |
| Noninterest-bearing | 20,073 | 18,516 | 19,596 | — | — | — |
| Interest-bearing |  |  |  |  |  |  |
| Demand | 185,331 | 208,364 | 196,300 | 0.13 | 0.22 | 0.22 |
| Savings | 2,418 | 2,179 | 1,374 | 0.11 | 0.13 | 0.11 |
| Time | 46,067 | 37,549 | 42,825 | 0.54 | 0.97 | 1.32 |
| Total\tinterest-bearing\tdeposits | 233,816 | 248,092 | 240,499 | 0.21 | 0.33 | 0.42 |
| Total\tdeposits\tin\tnon-U.S.\toffices | 253,889 | 266,608 | 260,095 | 0.19 | 0.31 | 0.38 |
| Total\tdeposits | $1,295,788 | $1,264,301 | $1,189,142 | 0.10% | 0.13% | 0.17% |

At	December	31,	2015,	other	U.S.	time	deposits	in	denominations	of	$100,000	or	more	totaled	$58.4	billion,	substantially	all	of	which	mature	in	three	months	or	less.	In addition,	the	table	below	presents	the	maturities	for	U.S.	time	certificates	of	deposit	in	denominations	of	$100,000	or	more.

| By	remaining	maturity	at<br>December	31,	2015	(in	millions) | Three	months<br>or	less | Over	three	months<br>but	within	six<br>months | Over	six	months<br>	but	within	12<br>months | Over	12	months | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| U.S.\ttime\tcertificates\tof\tdeposit\t($100,000\tor\tmore) | $7,520 | $1,537 | $1,770 | $1,745 | $12,572 |

# Short-term	and	other	borrowed	funds

The	following	table	provides	a	summary	of	JPMorgan	Chase's	short-term	and	other	borrowed	funds	for	the	years	indicated.

| As	of	or	for	the	year	ended	December	31,	(in	millions,	except	rates) | 2015 | 2014 | 2013 |
| :--- | :--- | :--- | :--- |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements: |  |  |  |
| Balance\tat\tyear-end | $152,678 | $192,101 | $181,163 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 192,510 | 208,560 | 238,551 |
| Maximum\tmonth-end\tbalance | 212,112 | 228,162 | 272,718 |
| Weighted-average\trate\tat\tDecember\t31 | 0.39% | 0.27% | 0.31% |
| Weighted-average\trate\tduring\tthe\tyear | 0.32 | 0.29 | 0.24 |
| Commercial\tpaper: |  |  |  |
| Balance\tat\tyear-end | $15,562 | $66,344 | $57,848 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 38,140 | 59,916 | 53,717 |
| Maximum\tmonth-end\tbalance | 64,012 | 66,344 | 58,835 |
| Weighted-average\trate\tat\tDecember\t31 | 0.55% | 0.22% | 0.22% |
| Weighted-average\trate\tduring\tthe\tyear | 0.29 | 0.22 | 0.21 |
| Other\tborrowed\tfunds:(a) |  |  |  |
| Balance\tat\tyear-end | $80,126 | $96,455 | $92,774 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 93,001 | 100,189 | 93,937 |
| Maximum\tmonth-end\tbalance | 99,226 | 107,950 | 103,526 |
| Weighted-average\trate\tat\tDecember\t31 | 1.89% | 1.73% | 2.49% |
| Weighted-average\trate\tduring\tthe\tyear | 1.84 | 1.89 | 2.27 |
| Short-term\tbeneficial\tinterests:(b) |  |  |  |
| Commercial\tpaper\tand\tother\tborrowed\tfunds: |  |  |  |
| Balance\tat\tyear-end | $11,322 | $16,953 | $17,786 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 15,608 | 14,073 | 22,245 |
| Maximum\tmonth-end\tbalance | 17,137 | 17,026 | 28,559 |
| Weighted-average\trate\tat\tDecember\t31 | 0.41% | 0.23% | 0.29% |
| Weighted-average\trate\tduring\tthe\tyear | 0.32 | 0.30 | 0.26 |

(a) Includes	interest-bearing	securities	sold	but	not	yet	purchased.

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

Federal	funds	purchased	represent	overnight	funds.	Securities	loaned	or	sold	under	repurchase	agreements	generally	mature	between	one	day	and	three	months. Commercial	paper	generally	is	issued	in	amounts	not	less	than	$100,000,	and	with	maturities	of	270	days	or	less.	Other	borrowed	funds	consist	of	demand	notes,	term federal	funds	purchased,	and	various	other	borrowings	that	generally	have	maturities	of	one	year	or	less.

# Signatures

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	behalf	of	the undersigned,	thereunto	duly	authorized.

By:	/s/	JAMES	DIMON

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in	the capacity	and	on	the	date	indicated.	JPMorgan	Chase	&	Co.	does	not	exercise	the	power	of	attorney	to	sign	on	behalf	of	any	Director.


what was the change in the derivative receivables reported on the consolidated balance sheets from 2014 to 2015
  change = 59.7 - 79.0
 answer = change