# 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

Warrants,	each	to	purchase	one	share	of	Common	Stock

Name	of	each	exchange	on	which	registered

The	New	York	Stock	Exchange

The	London	Stock	Exchange

The	Tokyo	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

Guarantee	of	6.70%	Capital	Securities,	Series	CC,	of	JPMorgan	Chase	Capital	XXIX 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.	ý	Yes	o	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	ý	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.	ý	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).	ý	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.	ý

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.

ý	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	ý	No

Documents	incorporated	by	reference:	Portions	of	the	registrant's	Proxy	Statement	for	the	annual	meeting	of	stockholders	to	be	held	on	May	19,	2015,	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	$2.6	trillion	in	assets and	$232.1	billion	in	stockholders'	equity	as	of	December	31,	2014.	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,	current	reports	on	Form	8-K,	and	any amendments	to	those	reports	filed	or	furnished	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	Ethics	for	its	Chairman	and Chief	Executive	Officer,	Chief	Financial	Officer,	Chief	Accounting	Officer	and other	finance	professionals	of	the	Firm.

# 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	segment. The	Corporate	&	Investment	Bank,	Commercial	Banking,	and	Asset	Management segments	comprise	the	Firm's	wholesale	businesses.

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	64	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,	and	a	variety	of other	financial	services	and	advisory	companies.	JPMorgan	Chase's	businesses generally	compete	on	the	basis	of	the	quality	and	range	of	their	products	and services,	transaction	execution,	innovation	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.

The	financial	services	industry	has	experienced	consolidation	and	convergence	in recent	years,	as	financial	institutions	involved	in	a	broad	range	of	financial products	and	services	have	merged	and,	in	some	cases,	failed.	This	consolidation is	expected	to	continue.	Consolidation	could	result	in	competitors	of	JPMorgan Chase	gaining	greater	capital	and	other	resources,	such	as	a	broader	range	of products	and	services	and	geographic	diversity.	It	is	likely	that	competition	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.

# 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	rule-making	following	the	enactment	of	the	Wall	Street	Reform and	Consumer	Protection	Act	(the	"Dodd-Frank	Act")	and	other	regulatory reforms	enacted	and	proposed	in	the	U.S.	and	abroad,	the	Firm	is	currently experiencing	a	period	of	unprecedented	change	in	regulation	and	such	changes could	have	a	significant	impact	on	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	implementing	all	the	new	regulations,	while, at	the	same	time,	best	meeting	the	needs	and	expectations	of	its

customers,	clients	and	shareholders.	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	the	possible	effects	on	its business	and	operations	of	all	of	the	significant	changes	that	are	currently underway.	For	more	information,	see	Risk	Factors	on	pages	8–17.

# Financial	holding	company:

Consolidated	supervision	by	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 Board	of	Governors	of	the	Federal	Reserve	System	(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").	Non-bank subsidiaries,	such	as	the	Firm's	U.S.	broker-dealers,	are	subject	to	supervision and	regulation	by	the	Securities	and	Exchange	Commission	("SEC"),	and	with respect	to	certain	futures-related	and	swaps-related	activities,	by	the	Commodity Futures	Trading	Commission	("CFTC").	See	Securities	and	broker-dealer regulation,	Investment	management	regulation	and	Derivatives	regulation	below.

As	a	result	of	the	Dodd-Frank	Act,	JPMorgan	Chase	is,	or	will	become,	subject	to (among	other	things)	significantly	revised	and	expanded	regulation	and supervision,	additional	limitations	on	the	way	it	conducts	its	businesses,	and heightened	capital	and	liquidity	requirements.	In	addition,	the	Consumer Financial	Protection	Bureau	("CFPB"),	which	was	created	by	the	Dodd-Frank Act,	has	rulemaking,	enforcement	and	examination	authority	over	JPMorgan Chase	and	its	subsidiaries	with	respect	to	federal	consumer	protection	laws.

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,	as	long	as	they	continue	to	meet	the	eligibility requirements	for	financial	holding	companies	(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	broader range	of	permissible	activities	for	financial	holding	companies	includes 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.	The	Federal	Reserve	may	also	impose corrective	capital	and/or	managerial	requirements	on	the	financial	holding company	and	may	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	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,	and	investment	in,	"covered funds"	(as	defined	by	the	Rule)	and	imposes	limits	on	certain	transactions between	the	Firm	and	its	sponsored	funds	(see	Investment	management regulation	below).	The	Volcker	Rule	requires	banking	entities	to	establish comprehensive	compliance	programs	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	and	monitoring	of	seven	metrics.	The	Firm	has	taken	significant steps	to	comply	with	the	Volcker	Rule.	However,	given	the	complexity	of	the new	framework,	and	the	fact	that	many	provisions	of	the	Rule	still	require	further regulatory	guidance,	the	full	impact	of	the	Volcker	Rule	is	still	uncertain	and	will ultimately	depend	on	the	interpretation	and	implementation	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	capital 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	Basel	Committee's	most	recent	capital	framework	("Basel	III"),	see Regulatory	capital	on	pages	146–153	and	Note	28.	It	is	likely	that	the	banking supervisors	will	continue	to	refine	and	enhance	the	Basel	III	capital	framework for	financial	institutions.	Recent	proposals	being	contemplated	by	the	Basel Committee

include,	among	others,	revisions	to	market	risk	capital	for	trading	books,	credit risk	capital	calculations,	the	measurement	methodology	to	calculate	counterparty credit	risk	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.	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").	For	additional	information	on	these	ratios,	see	Liquidity Risk	Management	on	pages	156–160.

Stress	tests.	Pursuant	to	the	Dodd-Frank	Act,	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	will	consider	both	quantitative	and qualitative	factors.	Qualitative	assessments	will	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.	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	on	its	website	each	year,	in	July,	the	results	of	its	mid-year	stress	tests under	the	Firm's	internally-developed	"severely	adverse"	scenario	and,	in	March, the	results	of	its	(and	its	two	primary	subsidiary	banks)	annual	CCAR	stress	tests under	the	Federal	Reserve's	"severely	adverse"	scenario.	Commencing	with	the 2016	CCAR,	the	annual	CCAR	submission	will	be	due	April	5th.	Results	will	be published	by	the	Federal	Reserve	by	June	30th,	with	disclosures	of	results	by BHCs	to	follow	within	15	days.	Also	commencing	in	2016,	the	mid-cycle	capital stress	test	submissions	will	be	due	October	5th	and	BHCs	will	publish	results	by November	4th.

For	additional	information	on	the	Firm's	CCAR,	see	Regulatory	capital	on	pages 146–153.

Enhanced	prudential	standards.	The	Dodd-Frank	Act	established	a	new	oversight body,	the	Financial	Stability	Oversight	Council	("FSOC"),	which	(among	other things)	recommends	prudential	standards,	reporting	and	disclosure	requirements to	the	Federal	Reserve	for	systemically	important	financial	institutions.	BHCs with	$50	billion	or	more	in	total	consolidated	assets,	such	as	JPMorgan	Chase, became	automatically	subject	to	the	heightened	prudential	standards.	The	Federal Reserve	has	adopted	several	rules	to

implement	certain	of	the	heightened	prudential	standards	contemplated	by	the Dodd-Frank	Act,	including	final	rules	relating	to	risk	management	and	corporate governance	of	subject	bank	holding	companies.	Beginning	January	1,	2015,	the rules	require	BHCs	with	$50	billion	or	more	in	total	consolidated	assets	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 increased	involvement	by	boards	of	directors	in	risk	management.	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.	Global	systemically	important	banks	("G-SIBs")	will be	required	to	comply	with	these	new	standards	by	January	1,	2016.

Orderly	liquidation	authority	and	other	financial	stability	measures.	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	to provide	a	resolution	plan.	For	more	information	about	the	Firm's	resolution	plan, see	Risk	Factors	on	pages	8–17.	In	addition,	under	the	Dodd-Frank	Act,	certain financial	companies,	including	JPMorgan	Chase	and	certain	of	its	subsidiaries, can	be	subjected	to	resolution	under	a	new	"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	released	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.

Regulators	in	the	U.S.	and	abroad	continue	to	be	focused	on	measures	to	address "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	G-SIBs,	requirements	recently	introduced	by	the	Federal Reserve	that	certain	large	bank	holding	companies	maintain	a	minimum	amount of	long-term	debt	to	facilitate	orderly	resolution	of	those	firms,	and	the	recently adopted	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	G-SIB	framework	and	Total	Loss	Absorbing	Capacity	("TLAC"), see	Regulatory	capital	on	pages	146–153,	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.	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,	the	Dodd-Frank	Act	restricts	acquisitions	by	financial	companies	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.	This	could	have	the effect	of	allowing	a	non-U.S.	financial	company	to	grow	to	hold	significantly more	than	10%	of	the	U.S.	market	without	exceeding	the	concentration	limit.	In addition,	under	the	Dodd-Frank	Act,	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	of	the	calculation	of	such	assessments,	resulting	from	the	enactment of	the	Dodd-Frank	Act,	significantly	increased	the	assessments	the	Firm's	bank subsidiaries	pay	annually	to	the	FDIC,	and	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	the	conservator	or	receiver	under	the	Federal	Deposit	Insurance	Act ("FDIA").	In	addition,	as	noted	above,	where	a	systemically	important	financial institution,	such	as	JPMorgan	Chase	&	Co.,	is	in

default	or	danger	of	default,	the	FDIC	may	be	appointed	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	in	connection	with another	FDIC-insured	institution	under	common	control	with	such	institution being	"in	default"	or	"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	released	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	are	subject	to	certain	restrictions	imposed	by	federal	law	on	extensions	of credit	to,	and	certain	other	transactions	with,	JPMorgan	Chase	and	certain	other affiliates,	and	on	investments	in	stock	or	securities	of	JPMorgan	Chase	and affiliates.	These	restrictions	prevent	JPMorgan	Chase	and	other	affiliates	from borrowing	from	a	bank	subsidiary	unless	the	loans	are	secured	in	specified amounts	and	are	subject	to	certain	other	limits.	For	more	information,	see	Note 27.	Under	the	Dodd-Frank	Act,	these	restrictions	were	extended	to	derivatives	and securities	lending	transactions.	In	addition,	the	Dodd-Frank	Act's	Volcker	Rule imposes	similar	restrictions	on	transactions	between	banking	entities,	such	as JPMorgan	Chase	and	its	subsidiaries,	and	hedge	funds	or

private	equity	funds	for	which	the	banking	entity	serves	as	the	investment manager,	investment	advisor	or	sponsor.

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,	2015,	to	their	respective	bank holding	companies	without	the	approval	of	their	banking	regulators.

In	addition	to	the	dividend	restrictions	described	above,	the	OCC,	the	Federal Reserve	and	the	FDIC	have	authority	to	prohibit	or	limit	the	payment	of dividends	by	the	banking	organizations	they	supervise,	including	JPMorgan Chase	and	its	bank	and	BHC	subsidiaries,	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.

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")	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	only	if	they	are	also	payable	in the	U.S.

CFPB	regulation	and	supervision,	and	other	consumer	regulations.	The	CFPB has	rulemaking,	enforcement	and	examination	authority	over	JPMorgan	Chase and	its	national	bank	subsidiaries,	including	JPMorgan	Chase	Bank,	N.A.	and Chase	Bank	USA,	N.A.,	with	respect	to	federal	consumer	protection	laws, including	laws	relating	to	fair	lending	and	the	prohibition	under	the	Dodd-Frank Act	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	rulemaking	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	"add-on"	products,	matters	involving	consumer	populations considered	vulnerable	by	the	CFPB	(such	as	students),	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.	The	Firm	has	adopted	programs	to	address	these	risks,	including	an active	dealer	education,	monitoring	and	review	programs.

The	activities	of	JPMorgan	Chase	Bank,	N.A.	and	Chase	Bank	USA,	N.A.	as consumer	lenders	also	are	subject	to	regulation	under	various	state	statutes	which are	enforced	by	the	respective	state's	Attorney	General.

# 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	United	Kingdom,	those	activities	are	conducted	by	J.P. Morgan	Securities	plc,	which	is	regulated	by	the	PRA	(a	subsidiary	of	the	Bank of	England	which	has	responsibility	for	prudential	regulation	of	banks	and	other systemically	important	institutions)	and	the	Financial	Conduct	Authority ("FCA")	(which	regulates	prudential	matters	for	other	firms	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	Regulatory	capital	on	pages	146–153.	Future	rule- making	mandated	by	the	Dodd-Frank	Act	will	involve	(among	other	things)	the standard	of	care	applicable	to	broker-dealers	when	dealing	with	retail	customers and	additional	requirements	regarding	securitization	practices.

# 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	states	securities	laws.	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.	Many	of	the	Volcker	Rule	regulations	regarding	"covered	funds",	and	their impact	on	the	Firm's	asset	management	activities,	particularly	the	seeding	of foreign	public	funds	and	the	criteria	for	establishing	foreign	public	funds	status, await	further	guidance	from	the	regulators.

# Derivatives	regulation:

Under	the	Dodd-Frank	Act,	the	Firm	is	subject	to	comprehensive	regulation	of	its derivatives	business.	The	regulations	impose	capital	and	margin	requirements, require	central	clearing	of	standardized	over-the-counter	derivatives,	require	that they	be	traded	on	regulated	exchanges	or	execution	facilities,	and	provide	for reporting	of	certain	mandated	information.	In	addition,	the	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	have	registered	with	the SEC	as	security-based	swap	dealers.	As	a	result	of	such	registration,	these entities	will	be	subject	to,	in	addition	to	new	capital	requirements,	new	rules limiting	the	types	of	swap	activities	that	may	be	engaged	in	by	bank	entities,	a new	margin	regime	for	uncleared	swaps,	new	rules	regarding	segregation	of customer	collateral,	and	business	conduct	and	documentation	standards	with respect	to	other	swaps	counterparties,	record-keeping	and	reporting	obligations, and	anti-fraud	and	anti-manipulation	requirements	related	to	their	swaps activities.	Further,	some	of	the	rules	for	derivatives	apply	extraterritorially	to	U.S. firms	doing	business	with	clients	outside	of	the	U.S.;	however	the	full	scope	of the	extra-territorial	impact	of	the	U.S.	swaps	regulation	remains	unclear.	The effect	of	the	rules	issued	under	the	Dodd-Frank	Act	will	necessitate	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.

The	Firm,	along	with	17	other	financial	institutions,	agreed	in	November	2014	to adhere	to	the	Resolution	Stay	Protocol	developed	by	the	International	Swaps	and

Derivatives	Association,	Inc.	in	response	to	regulator	concerns	that	the	closeout 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.	The	Firm's	financial	commodities	business	is subject	to	regulation	by	the	Federal	Energy	Regulatory	Commission.

# Data	regulation:

The	Firm	and	its	subsidiaries	also	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,	among	others.	The	Firm	was	the	victim of	a	cyberattack	in	2014	that	compromised	user	contact	information	for	certain customers.	For	more	information	relating	to	this	cyberattack,	see	Operational Risk	Management	on	pages	141–143.

# The	Bank	Secrecy	Act:

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.	The	Firm	has	established	a	global	anti-money	laundering	program in	order	to	comply	with	BSA	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.

# Anti-Corruption:

The	Firm	is	subject	to	laws	and	regulations	in	the	jurisdictions	in	which	it operates,	such	as	the	U.S.	Foreign	Corrupt	Practices	Act	and	the	U.K.	Bribery Act,	relating	to	corrupt	and	illegal	payments	to	government	officials	and	others. The	Firm	has	implemented	policies,	procedures,	and	internal	controls	that	are designed	to	comply	with	such	laws	and	regulations.	Any	failure	with	respect	to the	Firm's	programs	in	this	area	could	subject	the	Firm	to	substantial	liability	and regulatory	fines.	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	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	entity.	The	Federal	Reserve	has	conducted	a	review	of	the incentive	compensation	policies	and	practices	of	a	number	of	large	banking institutions,	including	the	Firm,	and	the	supervisory	findings	of	such	review	are incorporated	in	the	Firm's	supervisory	ratings.	In	addition	to	the	Federal	Reserve, the	Financial	Stability	Board	has	agreed	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.

# Significant	international	regulatory	initiatives:

The	EU	operates	a	European	Systemic	Risk	Board	which	monitors	financial stability,	together	with	a	framework	of	European	Supervisory	Agencies	which oversees	the	regulation	of	financial	institutions	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.	In addition,	the	Group	of	Twenty	Finance	Ministers	and	Central	Bank	Governors ("G-20")	formed	the	FSB.	At	both	G-20	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	G-20	together	with	other	plans	specific	to	the	EU.	This	program	includes EMIR,	which	will	require,	among	other	things,	the

central	clearing	of	standardized	derivatives	and	which	will	be	phased	in	by	2015; 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	executing	upon	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;	and	corporate	governance	in	financial	firms,	together with	implementation	in	the	EU	of	the	Basel	III	capital	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., the	Independent	Commission	on	Banking	(the	"Vickers	Commission")	proposed certain	provisions,	which	have	now	been	enacted	by	Parliament	and	upon	which detailed	implementing	requirements	are	expected	to	be	finalized	during	2015,	that mandate	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	and German	governments,	and	others	are	under	consideration	in	other	countries. 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.

# 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.	These laws	and	regulations	significantly	affect	the	way	that	the	Firm	does	business,	and can	restrict	the	scope	of	the	Firm's	existing	businesses,	limit	the	Firm's	ability	to expand	the	products	and	services	that	it	offers	or	make	its	products	and	services more	expensive	for	clients	and	customers.

The	financial	services	industry	continues	to	experience	an	unprecedented increase	in	regulations	and	supervision,	and	such	changes	could	have	a	significant impact	on	how	the	Firm	conducts	business.	Significant	and	comprehensive	new legislation	and	regulations	affecting	the	financial	services	industry	have	been adopted	or	proposed	in	recent	years,	both	in	the	U.S.	and	globally.	The	Firm continues	to	make	appropriate	adjustments	to	its	business	and	operations,	legal entity	structure	and	capital	and	liquidity	management	policies,	procedures	and controls	to	comply	with	these	new	laws	and	regulations.	However,	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.

Non-U.S.	regulations	and	initiatives	may	be	inconsistent	or	may	conflict	with current	or	proposed	regulations	in	the	U.S.,	which	could	create	increased compliance	and	other	costs	and	adversely	affect	JPMorgan	Chase's	business, operations	or	profitability.

There	can	be	significant	differences	in	the	ways	that	similar	regulatory	initiatives affecting	the	financial	services	industry	are	implemented	in	different	countries and	regions	in	which	JPMorgan	Chase	does	business.	For	example,	recent	EU legislative	and	regulatory	initiatives,	including	those	relating	to	the	resolution	of financial	institutions,	the	proposed	separation	of	trading	activities	from	core banking	services,	mandatory	on-exchange	trading,	position	limits	and	reporting rules	for	derivatives,	conduct	of	business	requirements	and	restrictions	on compensation,	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	will	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.	In addition,	the	Firm	continues	to	devote	substantial	resources	to	satisfying	the requirements	of	regulatory	consent	orders	and	other	settlements	to	which	it	is subject,	including	enhancing	its	procedures	and	controls,	expanding	its	risk	and control	functions	within	its	lines	of	business,	investing	in	technology	and	hiring significant	numbers	of	additional	risk,	control	and	compliance	personnel,	all	of which	have	increased	the	Firm's	operational	and	compliance	costs.

If	the	Firm	fails	to	meet	the	requirements	of	the	regulatory	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.

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,	certain	regulators	have	announced	policies,	or	taken	measures	in connection	with	specific	enforcement	actions,	which	make	it	more	likely	that	the Firm	and	other	financial	institutions	may	be	required	to	admit	wrongdoing	in connection	with	settling	such	matters.	Such	admissions	can	lead	to,	among	other things,	greater	exposure	in	civil	litigation	and	reputational	harm.

Finally,	U.S.	government	officials	have	indicated	and	demonstrated	a	willingness to	bring	criminal	actions	against	financial	institutions,	and	have	increasingly sought,	and	obtained,	resolutions	that	include	criminal	pleas	from	those institutions.	Such	resolutions	can	have	significant	collateral	consequences	for	a subject	financial	institution,	including	loss	of	customers	and	business	and	(absent the	forbearance	of,	or	the	granting	of	waivers	by,	applicable	regulators)	the inability	to	offer	certain	products	or	services	or	operate	certain	businesses	for	a period	of	time.

# Requirements	for	the	orderly	resolution	of	the	Firm	under	the	Dodd-Frank Act	could	require	JPMorgan	Chase	to	restructure	or	reorganize	its businesses	or	make	costly	changes	to	its	capital	or	funding	structure.

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	or other	applicable	insolvency	laws	in	the	event	of	future	material	financial	distress or	failure.	In	July	2014,	the	Firm	submitted	its	third	Title	I	resolution	plan	to	the Federal	Reserve	and	FDIC	(the	"2014	plan").	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	(the	"first	wave	filers")	in	2013,	including	the	Firm's	Title	I resolution	plan	submitted	in	2013	(the	"2013	plan").	Although	the	agencies	noted some	improvements	from	the	original	plans	submitted	by	the	first	wave	filers	in 2012,	the	agencies	also	jointly	identified	specific	shortcomings	with	the	2013 resolution	plans,	including	the	Firm's	2013	plan,	that	will	need	to	be	addressed	in 2015	submissions	if	not	already	addressed	in	the	Firm's	2014	plan.	In	addition, the	FDIC	board	of	directors	determined	under	Title	I	that	the	2013	resolution plans	submitted	by	the	first	wave	filers,	including	the	Firm's	2013	plan,	are	not credible	and	do	not	facilitate	an	orderly	resolution	under	the	U.S.	Bankruptcy Code	(although	the	Federal	Reserve	Board	did	not	make	such	a	determination). The	Federal	Reserve	Board	determined	that	the	first	wave	filers	must	take immediate	action	to	improve	their	resolvability	and	reflect	those	improvements	in their	2015	submissions.

If	the	Federal	Reserve	Board	and	the	FDIC	were	to	jointly	determine	that	the Firm's	Title	I	resolution	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	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	Board	and	FDIC determine	is	credible,	the	Firm	may	need	to	take	actions	to	restructure 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	for	its optimal	Title	II	strategy	would	involve	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	businesses	by	contributing	some	or	all	of	such intercompany	claims	to	the	capital	of	such	subsidiaries,	and	by	exchanging	debt claims	against	JPMorgan	Chase	&	Co.	for	equity	in	the	bridge	entity.	The	Federal Reserve	is	also	expected	to	propose	rules	regarding	the	minimum	levels	of unsecured	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.	Issuing	debt	in	the	amounts	that	would	be	required	under these	proposed	rules	could	lead	to	increased	funding	costs	for	the	Firm.	In addition,	if	the	Firm	were	to	be	resolved	under	its	recommended	Title	II	strategy, no	assurance	can	be	given	that	the	value	of	the	stock	of	the	bridge	entity distributed	to	the	holders	of	debt	obligations	of	JPMorgan	Chase	&	Co.	would	be sufficient	to	repay	or	satisfy	all	or	part	of	the	principal	amount	of,	and	interest	on, the	debt	obligations	for	which	such	stock	was	exchanged.

# Market	Risk

# JPMorgan	Chase's	results	of	operations	have	been,	and	may	continue	to	be, adversely	affected	by	U.S.	and	international	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	and	currency	and	commodities prices;	investor	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,	severe	weather	conditions,	outbreaks	of hostilities	or	terrorism;	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	from	fees	and commissions,	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	extensive	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	pricing	transparency	or	liquidity,	which	will	be influenced	by	many	of	these	factors.	The	Firm	anticipates	that	revenue	relating	to its	market-making	businesses	will	continue	to	experience	volatility,	which	will affect	the	Firm's	ability	to	realize	returns	from	such	activities	and	could	adversely affect	the	Firm's	earnings.

The	fees	that	the	Firm	earns	for	managing	third-party	assets	are	also	dependent upon	general	economic	conditions.	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	third-party	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.

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	has	and	may	continue	to	have	an adverse	effect	on	certain	of	the	Firm's	businesses	by	compressing	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	available-for-sale	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	current	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,	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.	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	liabilities that	are	recorded	at	fair	value.

Sudden	and	significant	volatility	in	the	prices	of	securities	and	other	assets (including	loan	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	fee-based	income	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.

Financial	services	institutions	are	interrelated	as	a	result	of	market-making, trading,	clearing,	counterparty	or	other	relationships.	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.	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.

The	Firm	is	a	market	leader	in	providing	clearing	and	custodial	services,	and	also acts	as	a	clearing	and	custody	bank	in	the	securities	and	repurchase	transaction market,	including	the	U.S.	tri-party	repurchase	transaction	market.	Many	of	these services	expose	the	Firm	to	credit	risk	in	the	event	of	a	default	by	the counterparty	or	client,	a	central	counterparty	("CCP")	or	another	market participant.

As	part	of	providing	clearing	services,	the	Firm	is	a	member	of	a	number	of 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	its	role	as custodian	bank	in	the	securities	and	repurchase	transaction	market,	the	Firm	can be	exposed	to	intra-day	credit	risk	of	its	clients.	If	a	client	to	which	the	Firm provides	such	services	becomes	bankrupt	or	insolvent,	the	Firm	may	become involved	in	disputes	and	litigation	with	various	parties,	including	one	or	more CCPs,	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 declines	in	value.

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	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.	As	a	result,	the	Firm	regularly	monitors	various	segments	of	its portfolio	exposures	to	assess	potential	concentration	risks.	The	Firm's	efforts	to diversify	or	hedge	its	credit	portfolio	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, 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,	regulations	regarding	the amount	and	types	of	securities	that	the	Firm	may	use	to	satisfy	applicable liquidity	coverage	ratio	and	net	stable	funding	ratio	requirements	may	also	affect the	Firm's	cost	of	funding.

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.

Regulators	in	some	countries	in	which	the	Firm	has	operations	have	proposed legislation	or	regulations	requiring	large	banks	to	conduct	certain	businesses through	separate	subsidiaries	in	those	countries,	and	to	maintain	independent capital	and	liquidity	for	such	subsidiaries.	If	adopted,	these	requirements	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	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	reputational	harm	to	the	Firm.	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.	As	the	regulators	and other	government	agencies	continue	to	examine	the	operations	of	the	Firm	and	its subsidiaries,	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.

# 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	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	reputational	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	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.	The	ongoing	crisis	in	Russia and	impact	of	sanctions,	coupled	with	sharp	oil	price	declines,	a	potential slowdown	in	the	macroeconomic	prospects	in	China,	and	concerns	about potential	economic	weaknesses	in	the	Eurozone	(including	the	permanent resolution	of	the	Greek	"bailout"	program),	could	undermine	investor	confidence and	affect	the	operating	environment	in	2015.	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,	will	adversely affect	the	Firm.

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

Some	of	the	countries	in	which	JPMorgan	Chase	conducts	its	wholesale 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,	or low	or	negative	growth,	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	have	historically	been	more	susceptible	to unfavorable	political,	social	or	economic	developments	which	have	in	the	past resulted	in,	and	may	in	the	future	lead	to,	social	unrest,	general	strikes	and demonstrations,	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	wholesale	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	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.	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	integrity	of	its	operating	systems	and employees,	and	those	of	third	parties,	and	certain	failures	of	such	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.	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	and	new	remote connectivity	solutions	(including	Internet	and	mobile	banking	services),	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),	reputational	damage,	regulatory

intervention	or	weaker	competitive	standing,	any	of	which	could	materially	and adversely	affect	the	Firm.

Third	parties	with	which	the	Firm	does	business,	as	well	as	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	services.	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	diminish	customer	satisfaction.

If	personal,	confidential	or	proprietary	information	of	customers	or	clients	in	the Firm's	possession	were	to	be	mishandled	or	misused,	the	Firm	could	suffer significant	regulatory	consequences,	reputational	damage	and	financial	loss.	Such mishandling	or	misuse	could	include	circumstances	where,	for	example,	such information	was	erroneously	provided	to	parties	who	are	not	permitted	to	have the	information,	either	through	the	fault	of	the	Firm's	systems,	employees	or counterparties,	or	where	such	information	was	intercepted	or	otherwise compromised	by	third	parties.

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	could	disrupt	its 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 and	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.	A	cyberattack	against	the	Firm	in	2014	resulted	in	customer	and	internal data	of	the	Firm	being	compromised.	The	Firm	is	regularly	targeted	by unauthorized	parties	using	malicious	code	and	viruses,	and	has	also	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,	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 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.	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	or	practices	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, trading	account	assets	and	assets	held-for-sale,	as	well	as	cash	management	and clearing	activities,	expose	the	Firm	to	credit	risk.	As	one	of	the	nation's	largest lenders,	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 derivative	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,	disputes	regarding	the	terms	or	the settlement	procedures	of	derivative	contracts	could	arise,	which	could	force	the Firm	to	incur	unexpected	costs,	including	transaction,	legal	and	litigation	costs, and	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.

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	is	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.

# 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.

# 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,	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,	and	a	variety	of	other	financial	services	and	advisory	companies. 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.	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.	Ongoing	or	increased	competition	in any	one	or	all	of	these	areas	may	put	downward	pressure	on	prices	for	the	Firm's products	and	services	or	may	cause	the	Firm	to	lose	market	share.	Increased competition	also

may	require	the	Firm	to	make	additional	capital	investments	in	its	businesses	in order	to	remain	competitive.	These	investments	may	increase	expense	or	may require	the	Firm	to	extend	more	of	its	capital	on	behalf	of	clients	in	order	to execute	larger,	more	competitive	transactions.	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. For	example,	the	regulatory	objectives	underlying	several	provisions	of	the Dodd-Frank	Act,	including	the	prohibition	on	proprietary	trading	under	the Volcker	Rule,	have	not	been	embraced	by	governments	and	regulatory	agencies outside	the	U.S.	and	may	not	be	implemented	into	law	in	most	countries.	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	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	assumptions and	estimates	which,	if	incorrect,	could	cause	unexpected	losses	in	the future.

Under	accounting	principles	generally	accepted	in	the	U.S.	("U.S.	GAAP"), JPMorgan	Chase	is	required	to	use	certain	assumptions	and	estimates	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,	available-for-sale	securities, 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	assumptions	or estimates	underlying	the	Firm's	financial	statements	are	incorrect,	the	Firm	may experience	material	losses.

# 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	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,	or	to	handle	or	use	confidential	information	of	customers	or clients	appropriately	or	in	compliance	with	applicable	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.	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 reputational	harm	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.

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	conflicts	of	interest	could	affect the	willingness	of	clients	to	deal	with	the	Firm,	or	give	rise	to	litigation	or enforcement	actions,	as	well	as	cause	serious	reputational	harm	to	the	Firm.

# 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	owned	by	JPMorgan	Chase.	This	location contains	1.3	million	square	feet	of	space.

In	total,	JPMorgan	Chase	owned	or	leased	10.5	million	square	feet	of commercial	office	and	retail	space	in	New	York	City	at	December	31,	2014. JPMorgan	Chase	and	its	subsidiaries	also	own	or	lease	significant	administrative and	operational	facilities	in	Columbus/Westerville,	Ohio	(3.7	million	square feet);	Chicago,	Illinois	(3.4	million	square	feet);	Wilmington/Newark,	Delaware (2.2	million	square	feet);	Houston,	Texas	(2.2	million	square	feet);	Dallas/Fort Worth,	Texas	(2.0	million	square	feet);	Phoenix/Tempe,	Arizona	(1.8	million square	feet);	Jersey	City,	New	Jersey	(1.2	million	square	feet);	as	well	as	owning or	leasing	5,602	retail	branches	in	23	states.	At	December	31,	2014,	the	Firm occupied	a	total	of	65.5	million	square	feet	of	space	in	the	U.S.

At	December	31,	2014,	the	Firm	also	owned	or	leased	5.5	million	square	feet	of space	in	Europe,	the	Middle	East	and	Africa.	In	the	U.K.,	at	December	31,	2014, JPMorgan	Chase	owned	or	leased	4.5	million	square	feet	of	space,	including	1.4 million	square	feet	at	25	Bank	Street,	the	European	headquarters	of	the	Corporate &	Investment	Bank.

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.

JPMorgan	Chase	and	its	subsidiaries	also	occupy	offices	and	other	administrative and	operational	facilities	in	the	Asia/Pacific	region,	Latin	America	and	Canada under	ownership	and	leasehold	agreements	aggregating	5.8	million	square	feet	of space	at	December	31,	2014.	This	includes	leases	for	administrative	and operational	facilities	in	India	(2.0	million	square	feet).

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

# Parts	I	and	II

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	68–71.

# 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,	the	London	Stock	Exchange	and	the	Tokyo 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	307–308.	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,	2014,	see	"Five-year	stock	performance",	on	page	63.

For	information	on	the	common	dividend	payout	ratio,	see	Capital	actions	in	the Capital	Management	section	of	Management's	discussion	and	analysis	on	page 154.	For	a	discussion	of	restrictions	on	dividend	payments,	see	Note	22	and	Note 27.	At	January	31,	2015,	there	were	205,115	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	154.

Shares	repurchased,	on	a	settlement-date	basis,	pursuant	to	the	common	equity	repurchase	program	during	2014	were	as	follows.

| Year	ended	December	31,	2014 | Total	shares	of<br>common	stock<br>repurchased | Average	price<br>paid	per	share	of<br>common	stock(a) | Aggregate	repurchases<br>of	common	equity	(in<br>millions)(a) | Dollar	value<br>of	remaining<br>authorized<br>repurchase<br>(in	millions)(a) |
| :--- | :--- | :--- | :--- | :--- |
| First\tquarter | 6,733,494 | $57.31 | $386 | $8,258 |
| Second\tquarter | 24,769,261 | 55.53 | 1,375 | 6,883 |
| Third\tquarter | 25,503,377 | 58.37 | 1,489 | 5,394 |
| October | 9,527,323 | 57.92 | 552 | 4,842 |
| November | 6,180,664 | 60.71 | 375 | 4,467 |
| December | 9,538,119 | 61.08 | 583 | 3,884 |
| Fourth\tquarter | 25,246,106 | 59.80 | 1,510 | 3,884 |
| Year-to-date | 82,252,238 | $57.87 | $4,760 | $3,884 |

# (a) Excludes	commissions	cost.

# Repurchases	under	the	stock-based	incentive	plans

Participants	in	the	Firm's	stock-based	incentive	plans	may	have	shares	of common	stock	withheld	to	cover	income	taxes.	Shares	withheld	to	pay	income taxes	are	repurchased	pursuant	to	the	terms	of	the	applicable	plan	and	not	under the	Firm's	repurchase	program.	Shares	repurchased,	on	a	settlement-date	basis, pursuant	to	these	plans	during	2014	were	as	follows.

| Year	ended<br>December	31,	2014 | Total	shares	of	common<br>stock<br>repurchased | Average	price<br>paid	per	share	of<br>common	stock |
| :--- | :--- | :--- |
| First\tquarter | 1,245 | $57.99 |
| Second\tquarter | — | — |
| Third\tquarter | — | — |
| Fourth\tquarter | — | — |
| Year-to-date | 1,245 | $57.99 |

# ITEM	6:	SELECTED	FINANCIAL	DATA

For	five-year	selected	financial	data,	see	"Five-year	summary	of	consolidated financial	highlights	(unaudited)"	on	page	62.

# 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 64–169.	Such	information	should	be	read	in	conjunction	with	the	Consolidated Financial	Statements	and	Notes	thereto,	which	appear	on	pages	172–306.

# 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	131–136.

# ITEM	8:	FINANCIAL	STATEMENTS	AND SUPPLEMENTARY	DATA

The	Consolidated	Financial	Statements,	together	with	the	Notes	thereto	and	the report	thereon	dated	February	24,	2015,	of	PricewaterhouseCoopers	LLP,	the Firm's	independent	registered	public	accounting	firm,	appear	on	pages	171–306.

Supplementary	financial	data	for	each	full	quarter	within	the	two	years	ended December	31,	2014,	are	included	on	pages	307–308	in	the	table	entitled	"Selected quarterly	financial	data	(unaudited)."	Also	included	is	a	"Glossary	of	terms''	on pages	309–313.

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

# ITEM	9A:	CONTROLS	AND	PROCEDURES

In	May	2013,	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission	(COSO)	issued	its	updated	"Internal	Control	-	Integrated Framework	(2013)".	The	2013	framework,	which	provides	guidance	for designing,	implementing	and	conducting	internal	control	and	assessing	its effectiveness,	updates	the	original	COSO	framework,	which	was	published	in 1992.	The	Firm	used	the	2013	COSO	framework	to	assess	the	effectiveness	of	the Firm's	internal	control	over	financial	reporting	as	of	December	31,	2014.	See "Management's	report	on	internal	control	over	financial	reporting"	on	page	170.

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	controls	in	the	future.	For	further	information,	see "Management's	report	on	internal	control	over	financial	reporting"	on	page	170. 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,	2014,	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, as	amended	(the	"Exchange	Act"),	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, 2014	that	requires	disclosure	under	Section	219.

Carlson	Wagonlit	Travel	("CWT"),	a	business	travel	management	firm	in	which JPMorgan	Chase	had	invested	through	its	merchant	banking	activities,	may	be deemed	to	be	an	affiliate	of	the	Firm,	as	that	term	is	defined	in	Exchange	Act Rule	12b-2.	CWT	informed	the	Firm	that,	during	the	period	January	1,	2014 through	August	15,	2014	(the	date	on	which	the	Firm	sold	its	investment	in CWT),	CWT	booked	approximately	2	flights	(of	the	approximately	37	million transactions	it	booked	during	the	period)	to	Iran	on	Iran	Air	for	passengers, including	employees	of	foreign	governments	and/or	non-governmental organizations.	Both	flights	originated	outside	of	the	U.S.	from	countries	that permit	travel	to	Iran,	and	none	of	such	passengers	were	persons	designated	under Executive	Orders	13224	or	13382	or	were	employees	of	foreign	governments	that are	targets	of	U.S.	sanctions.	CWT	and	the	Firm	believe	that	this	activity	is permissible	pursuant	to	certain	exemptions	from	U.S.	sanctions	for	travel-related transactions	under	the	International	Emergency	Economic	Powers	Act,	as amended.	CWT	had	approximately	$5,000	in	gross	revenues	attributable	to	these transactions.

In	addition,	during	2014,	JPMorgan	Chase	Bank,	N.A.	processed	one	payment from	Iran	Air	on	behalf	of	a	U.S.	client	into	such	client's	account	at	JPMorgan Chase	Bank,	N.A.	Iran	Air	is	designated	pursuant	to	Executive	Order	13382.	This transaction	was	authorized	by	and	conducted	pursuant	to	a	license	from	the Treasury	Department's	Office	of	Foreign	Assets	Control	("OFAC").	JPMorgan Chase	Bank,	N.A.	charged	a	fee	of	US$	3.50	for	this	transaction.	Iran	Air overpaid	such	U.S.	client	when	it	made	the	initial	payment	to	the	client. Therefore,	upon	its	U.S.	client's	request,	the	Firm	transferred	the	overpayment back	to	Iran	Air	in	the	fourth	quarter	of	2014	and	charged	a	fee	of	US$	5.50	for the	transfer.	As	with	the	initial	transaction,	the	transfer	of	the	overpayment	to	Iran Air	was	authorized	by	and	conducted	pursuant	to	an	OFAC	license.	JPMorgan Chase	Bank,	N.A.	has	no	current	intention	to	continue	such	activities	but	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)

(a)	All	of	the	executive	officers	listed	in	this	table	are	currently	members	of	the	Firm's	Operating	Committee.

Unless	otherwise	noted,	during	the	five	fiscal	years	ended	December	31,	2014,	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	2015	Annual	Meeting	of	Stockholders	to be	held	on	May	19,	2015,	which	will	be	filed	with	the	SEC	within	120	days	of	the	end	of	the	Firm's	fiscal	year	ended	December	31,	2014.

# 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.

| December	31,	2014 | Number	of	shares	to	be<br>issued	upon	exercise	of<br>outstanding<br>options/SARs | Weighted-average<br>exercise	price	of<br>outstanding<br>options/SARs | Number	of	shares	remaining<br>available	for	future	issuance<br>under	stock	compensation<br>plans | Number	of	shares	remaining<br>available	for	future	issuance<br>under	stock	compensation<br>plans |
| :--- | :--- | :--- | :--- | :--- |
| Plan\tcategory |  |  |  |  |
| Employee\tstock-based\tincentive\tplans\tapproved\tby\tshareholders | 59,194,831 | $45.00 | 266,037,974 | (a) |
| Total | 59,194,831 | $45.00 | 266,037,974 |  |

(a) Represents	future	shares	available	under	the	shareholder-approved	Long-Term	Incentive	Plan,	as	amended	and	restated	effective	May	17,	2011.

All	future	shares	will	be	issued	under	the	shareholder-approved	Long-Term Incentive	Plan,	as	amended	and	restated	effective	May	17,	2011.	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

3.5 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).

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	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	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	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).

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).

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	17,	2011	(incorporated	by	reference to	Appendix	C	of	the	Schedule	14A	of	JPMorgan	Chase	&	Co. (File	No.	1-5805)	filed	April	7,	2011).(a)

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). 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)

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)

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)

10.11 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)

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)

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	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)

10.20 Form	of	JPMorgan	Chase	&	Co.	Terms	and	Conditions	of	Fixed Allowance	(UK)	(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	June	30,	2014).(a)

10.21 Form	of	JPMorgan	Chase	&	Co.	Performance-Based	Incentive Compensation	Plan,	effective	as	of	January	1,	2006,	as	amended (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,	2009).(a)

10.22 Deferred	Prosecution	Agreement	dated	January	6,	2014	between the	U.S.	Attorney's	Office	for	the	Southern	District	of	New	York and	JPMorgan	Chase	Bank,	N.A.	(incorporated	by	reference	to Exhibit	99.1	to	the	Current	Report	on	Form	8-K	of	JPMorgan Chase	&	Co.	(File	No.	1-5805)	filed	January	7,	2014).

(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, 2014,	formatted	in	XBRL	(eXtensible	Business	Reporting	Language)	interactive	data	files: (i)	the	Consolidated	statements	of	income	for	the	years	ended	December	31,	2014,	2013 and	2012,	(ii)	the	Consolidated	statements	of	comprehensive	income	for	the	years	ended December	31,	2014,	2013	and	2012,	(iii)	the	Consolidated	balance	sheets	as	of December	31,	2014	and	2013,	(iv)	the	Consolidated	statements	of	changes	in	stockholders' equity	for	the	years	ended	December	31,	2014,	2013	and	2012,	(v)	the	Consolidated statements	of	cash	flows	for	the	years	ended	December	31,	2014,	2013	and	2012,	and	(vi)

the	Notes	to	Consolidated	Financial	Statements.

# Table	of	contents

# Financial:

Management's	discussion	and	analysis: 171 	 Report	of	Independent	Registered	Public	Accounting	Firm

64 Introduction 172 	 Consolidated	Financial	Statements

65 Executive	Overview

68 Consolidated	Results	of	Operations

72 Consolidated	Balance	Sheets	Analysis

74 	 Off–Balance	Sheet	Arrangements	and	Contractual	Cash	Obligations

76 Consolidated	Cash	Flows	Analysis

77 Explanation	and	Reconciliation	of	the	Firm's	Use	of	Non-GAAP	Financial

Measures

79 Business	Segment	Results

# Supplementary	information:

105 Enterprise-wide	Risk	Management 309 	 Glossary	of	Terms

110 Credit	Risk	Management

168 	 Nonexchange-Traded	Commodity	Derivative	Contracts	at	Fair	Value

169 Forward-Looking	Statements

JPMorgan	Chase	&	Co./2014	Annual	Report

# FIVE-YEAR	SUMMARY	OF	CONSOLIDATED	FINANCIAL	HIGHLIGHTS

| (in	millions,	except	per	share,	ratio,	headcount	data	and	where	otherwise	noted) | 2014 | 2013 | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Selected\tincome\tstatement\tdata |  |  |  |  |  |
| Total\tnet\trevenue | $94,205 | $96,606 | $97,031 | $97,234 | $102,694 |
| Total\tnoninterest\texpense | 61,274 | 70,467 | 64,729 | 62,911 | 61,196 |
| Pre-provision\tprofit | 32,931 | 26,139 | 32,302 | 34,323 | 41,498 |
| Provision\tfor\tcredit\tlosses | 3,139 | 225 | 3,385 | 7,574 | 16,639 |
| Income\tbefore\tincome\ttax\texpense | 29,792 | 25,914 | 28,917 | 26,749 | 24,859 |
| Income\ttax\texpense | 8,030 | 7,991 | 7,633 | 7,773 | 7,489 |
| Net\tincome | $21,762 | $17,923 | $21,284 | $18,976 | $17,370 |
| Earnings\tper\tshare\tdata |  |  |  |  |  |
| Net\tincome:\tBasic | $5.34 | $4.39 | $5.22 | $4.50 | $3.98 |
| \t\t\t\t\t\t\t\t\t\t\tDiluted | 5.29 | 4.35 | 5.20 | 4.48 | 3.96 |
| Average\tshares:\tBasic | 3,763.5 | 3,782.4 | 3,809.4 | 3,900.4 | 3,956.3 |
| \t\t\t\t\t\t\t\t\t\t\t\t\t\tDiluted | 3,797.5 | 3,814.9 | 3,822.2 | 3,920.3 | 3,976.9 |
| Market\tand\tper\tcommon\tshare\tdata |  |  |  |  |  |
| Market\tcapitalization | $232,472 | $219,657 | $167,260 | $125,442 | $165,875 |
| Common\tshares\tat\tperiod-end | 3,714.8 | 3,756.1 | 3,804.0 | 3,772.7 | 3,910.3 |
| Share\tprice(a) |  |  |  |  |  |
| High | $63.49 | $58.55 | $46.49 | $48.36 | $48.20 |
| Low | 52.97 | 44.20 | 30.83 | 27.85 | 35.16 |
| Close | 62.58 | 58.48 | 43.97 | 33.25 | 42.42 |
| Book\tvalue\tper\tshare | 57.07 | 53.25 | 51.27 | 46.59 | 43.04 |
| Tangible\tbook\tvalue\tper\tshare\t("TBVPS")(b) | 44.69 | 40.81 | 38.75 | 33.69 | 30.18 |
| Cash\tdividends\tdeclared\tper\tshare | 1.58 | 1.44 | 1.20 | 1.00 | 0.20 |
| Selected\tratios\tand\tmetrics |  |  |  |  |  |
| Return\ton\tcommon\tequity\t("ROE") | 10% | 9% | 11% | 11% | 10% |
| Return\ton\ttangible\tcommon\tequity\t("ROTCE")(b) | 13 | 11 | 15 | 15 | 15 |
| Return\ton\tassets\t("ROA") | 0.89 | 0.75 | 0.94 | 0.86 | 0.85 |
| Overhead\tratio | 65 | 73 | 67 | 65 | 60 |
| Loans-to-deposits\tratio | 56 | 57 | 61 | 64 | 74 |
| High\tquality\tliquid\tassets\t("HQLA")\t(in\tbillions)(c) | $600 | $522 | $341 | NA | NA |
| Common\tequity\ttier\t1\t("CET1")\tcapital\tratio(d) | 10.2% | 10.7% | 11.0% | 10.1% | 9.8% |
| Tier\t1\tcapital\tratio\t(d) | 11.6 | 11.9 | 12.6 | 12.3 | 12.1 |
| Total\tcapital\tratio(d) | 13.1 | 14.4 | 15.3 | 15.4 | 15.5 |
| Tier\t1\tleverage\tratio(d) | 7.6 | 7.1 | 7.1 | 6.8 | 7.0 |
| Selected\tbalance\tsheet\tdata\t(period-end) |  |  |  |  |  |
| Trading\tassets | $398,988 | $374,664 | $450,028 | $443,963 | $489,892 |
| Securities(e) | 348,004 | 354,003 | 371,152 | 364,793 | 316,336 |
| Loans | 757,336 | 738,418 | 733,796 | 723,720 | 692,927 |
| Total\tassets | 2,573,126 | 2,415,689 | 2,359,141 | 2,265,792 | 2,117,605 |
| Deposits | 1,363,427 | 1,287,765 | 1,193,593 | 1,127,806 | 930,369 |
| Long-term\tdebt(f) | 276,836 | 267,889 | 249,024 | 256,775 | 270,653 |
| Common\tstockholders'\tequity | 212,002 | 200,020 | 195,011 | 175,773 | 168,306 |
| Total\tstockholders'\tequity | 232,065 | 211,178 | 204,069 | 183,573 | 176,106 |
| Headcount | 241,359 | 251,196 | 258,753 | 259,940 | 239,515 |
| Credit\tquality\tmetrics |  |  |  |  |  |
| Allowance\tfor\tcredit\tlosses | $14,807 | $16,969 | $22,604 | $28,282 | $32,983 |
| Allowance\tfor\tloan\tlosses\tto\ttotal\tretained\tloans | 1.90% | 2.25% | 3.02% | 3.84% | 4.71% |
| Allowance\tfor\tloan\tlosses\tto\tretained\tloans\texcluding\tpurchased\tcredit-impaired\tloans(g) | 1.55 | 1.80 | 2.43 | 3.35 | 4.46 |
| Nonperforming\tassets | $7,967 | $9,706 | $11,906 | $11,315 | $16,682 |
| Net\tcharge-offs | 4,759 | 5,802 | 9,063 | 12,237 | 23,673 |
| Net\tcharge-off\trate | 0.65% | 0.81% | 1.26% | 1.78% | 3.39% |

(a) Share	prices	shown	for	JPMorgan	Chase's	common	stock	are	from	the	New	York	Stock	Exchange.	JPMorgan	Chase's	common	stock	is	also	listed	and	traded	on	the	London	Stock	Exchange	and	the	Tokyo	Stock Exchange.

(b) TBVPS	and	ROTCE	are	non-GAAP	financial	measures.	TBVPS	represents	the	Firm's	tangible	common	equity	divided	by	common	shares	at	period-end.	ROTCE	measures	the	Firm's	annualized	earnings	as	a	percentage	of	tangible	common equity.	For	further	discussion	of	these	measures,	see	Explanation	and	Reconciliation	of	the	Firm's	Use	of	Non-GAAP	Financial	Measures	on	pages	77–78.

(c) HQLA	represents	the	Firm's	estimate	of	the	amount	of	assets	that	qualify	for	inclusion	in	the	liquidity	coverage	ratio	under	the	final	U.S.	rule	("U.S.	LCR")	as	of	December	31,	2014,	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	157.

(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	Regulatory	capital	on	pages	146–153	for additional	information	on	Basel	III	and	non-GAAP	financial	measures	of	regulatory	capital.

(e) Included	held-to-maturity	securities	of	$49.3	billion	and	$24.0	billion	at	December	31,	2014	and	2013,	respectively.	Held-to-maturity	balances	for	the	other	periods	were	not material.

(g) Excludes	the	impact	of	residential	real	estate	purchased	credit-impaired	("PCI")	loans.	For	further	discussion,	see	Allowance	for	credit	losses	on pages	128– 130.

# 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	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	85	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,	2009,	in	JPMorgan	Chase	common	stock	and	in	each	of	the	above	indices.	The comparison	assumes	that	all	dividends	are	reinvested.

| (in	dollars) | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| JPMorgan\tChase | $100.00 | $102.30 | $81.87 | $111.49 | $152.42 | $167.48 |
| KBW\tBank\tIndex | 100.00 | 123.36 | 94.75 | 125.91 | 173.45 | 189.69 |
| S&amp;P\tFinancial\tIndex | 100.00 | 112.13 | 93.00 | 119.73 | 162.34 | 186.98 |
| S&amp;P\t500\tIndex | 100.00 | 115.06 | 117.48 | 136.27 | 180.39 | 205.07 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  |  | 63 |

# Management's	discussion	and	analysis

This	section	of	JPMorgan	Chase's	Annual	Report	for	the	year	ended	December	31,	2014	("Annual	Report"),	provides	Management's	discussion	and	analysis	("MD&A") of	the	financial	condition	and	results	of	operations	of	JPMorgan	Chase.	See	the	Glossary	of	Terms	on	pages	309–313	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	169)	and	in	JPMorgan	Chase's	Annual	Report	on	Form	10-K	for	the	year	ended December	31,	2014	("2014	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 $2.6	trillion	in	assets	and	$232.1	billion	in	stockholders'	equity	as	of December	31,	2014.	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	U.K.	is	J.P.	Morgan	Securities	plc,	a	subsidiary	of JPMorgan	Chase	Bank,	N.A.

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	Corporate	&	Investment	Bank	("CIB"),	Commercial	Banking ("CB"),	and	Asset	Management	("AM")	segments	comprise	the	Firm's	wholesale businesses.	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	79–104,	and	Note	33.

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	events,	trends	and	uncertainties,	as	well	as the	enterprise	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) | 2014 | 2013 | Change |
| :--- | :--- | :--- | :--- |
| Selected\tincome\tstatement\tdata |  |  |  |
| Total\tnet\trevenue | $94,205 | $96,606 | (2)% |
| Total\tnoninterest\texpense | 61,274 | 70,467 | (13) |
| Pre-provision\tprofit | 32,931 | 26,139 | 26 |
| Provision\tfor\tcredit\tlosses | 3,139 | 225 | \t\t\t\tNM |
| Net\tincome | 21,762 | 17,923 | 21 |
| Diluted\tearnings\tper\tshare | 5.29 | 4.35 | 22 |
| Return\ton\tcommon\tequity | 10% | 9% |  |
| Capital\tratios(a) |  |  |  |
| CET1 | 10.2 | 10.7 |  |
| Tier\t1\tcapital | 11.6 | 11.9 |  |

(a) Basel	III	Transitional	rules	became	effective	on	January	1,	2014;	December	31,	2013	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	Regulatory capital	on	pages	146–153	for	additional	information	on	Basel	III	and	non-GAAP	financial measures	of	regulatory	capital.

# Summary	of	2014	Results

JPMorgan	Chase	reported	record	full-year	2014	net	income	of	$21.8	billion,	and record	earnings	per	share	of	$5.29,	on	net	revenue	of	$94.2	billion.	Net	income increased	by	$3.8	billion,	or	21%,	compared	with	net	income	of	$17.9	billion,	or $4.35	per	share,	in	2013.	ROE	for	the	year	was	10%,	compared	with	9%	for	the prior	year.

The	increase	in	net	income	in	2014	was	driven	by	lower	noninterest	expense, largely	offset	by	higher	provision	for	credit	losses	and	lower	net	revenue.	The decrease	in	noninterest	expense	was	driven	by	lower	legal	expense	as	well	as lower	compensation	expense.

The	provision	for	credit	losses	increased	from	the	prior	year	as	result	of	a	lower level	of	benefit	from	reductions	in	the	consumer	allowance	for	loan	losses, partially	offset	by	lower	net	charge-offs.	The	decrease	in	the	consumer	allowance for	loan	losses	was	predominantly	the	result	of	continued	improvement	in	home prices	and	delinquencies	in	the	residential	real	estate	portfolio.	The	wholesale provision	reflected	a	continued	favorable	credit	environment.

Total	firmwide	allowance	for	credit	losses	was	$14.8	billion	resulting	in	a	loan loss	coverage	ratio	of	1.55%,	excluding	the	purchase	credit-impaired	("PCI") portfolio,	compared	with	1.80%	in	the	prior	year.	The	Firm's	allowance	for	loan losses	to	nonperforming	loans	retained,	excluding	the	PCI

The	Firm's	results	reflected	solid	underlying	performance	across	its	four	major reportable	business	segments,	with	continued	strong	lending	and	deposit	growth. Consumer	&	Community	Banking	was	#1	in	deposit	growth	for	the	third consecutive	year	and	Consumer	&	Business	Banking	within	Consumer	& Community	Banking	was	#1	in	customer	satisfaction	among	the	largest	U.S. banks	for	the	third	consecutive	year	as	measured	by	The	American	Customer Satisfaction	Index	("ACSI").	Credit	card	sales	volume	(excluding	Commercial Card)	was	up	11%	for	the	year.	The	Corporate	&	Investment	Bank	maintained	its #1	ranking	in	Global	Investment	Banking	Fees	and	moved	up	to	a	#1	ranking	in Europe,	Middle	East	and	Africa	("EMEA"),	according	to	Dealogic.	Commercial Banking	loans	increased	to	$149	billion,	an	8%	increase	compared	with	the	prior year.	Commercial	Banking	also	had	record	gross	investment	banking	revenue	of $2.0	billion,	up	18%	compared	with	the	prior	year.	Asset	Management	achieved twenty-three	consecutive	quarters	of	positive	net	long-term	client	flows	and increased	average	loan	balances	by	16%	in	2014.

The	Firm	maintained	its	fortress	balance	sheet,	ending	the	year	with	an	estimated Basel	III	Advanced	Fully	Phased-in	CET1	capital	ratio	of	10.2%,	compared	with 9.5%	in	the	prior	year.	Total	deposits	increased	to	$1.4	trillion,	up	6%	from	the prior	year.	Total	stockholders'	equity	was	$232	billion	at	December	31,	2014. (The	Basel	III	Advanced	Fully	Phased-in	CET1	capital	ratio	is	a	non-GAAP financial	measure,	which	the	Firm	uses	along	with	the	other	capital	measures,	to assess	and	monitor	its	capital	position.	For	further	discussion	of	the	Firm's	capital ratios,	see	Regulatory	capital	on	pages	146–153.)

During	2014,	the	Firm	continued	to	serve	customers,	corporate	clients	and	the communities	in	which	it	does	business.	The	Firm	provided	credit	to	and	raised capital	of	$2.1	trillion	for	its	clients	during	2014;	this	included	$19	billion	lent	to U.S.	small	businesses	and	$75	billion	to	nonprofit	and	government	entities, including	states,	municipalities,	hospitals	and	universities.

The	discussion	that	follows	highlights	the	performance	of	each	business	segment compared	with	the	prior	year	and	presents	results	on	a	managed	basis.	For	more information	about	managed	basis,	as	well	as	other	non-GAAP	financial	measures used	by	management	to	evaluate	the	performance	of	each	line	of	business,	see pages	77–78.

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	interest income	decreased,	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	decreased,	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.	Noninterest	expense	decreased	from	the	prior year,	driven	by	lower	Mortgage	Banking	expense.

Corporate	&	Investment	Bank	net	income	was	$6.9	billion,	a	decrease	of	22% compared	with	the	prior	year,	primarily	reflecting	lower	revenue	as	well	as	higher noninterest	expense.	Banking	revenues	decreased	from	the	prior	year	primarily due	to	lower	Lending	revenues,	driven	by	mark	to	market	losses	on	securities received	from	restructured	loans,	compared	to	gains	in	the	prior	year,	partially offset	by	higher	investment	banking	fees.	Markets	&	Investor	Services	revenues increased	slightly	from	the	prior	year	as	2013	included	losses	from	FVA/DVA, primarily	driven	by	FVA	implementation,	while	the	current	year	reflected	lower Fixed	Income	Markets	revenue.	Credit	Adjustments	&	Other	revenue	was	a	loss of	$272	million.	Noninterest	expense	increased	compared	with	the	prior	year driven	by	higher	noncompensation	expense,	predominantly	due	to	higher	legal expense	and	investment	in	controls.	This	was	partially	offset	by	lower performance-based	compensation	expense.

Commercial	Banking	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	interest	income	decreased	from the	prior	year,	reflecting	yield	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	increased,	reflecting	higher	investment	banking	revenue, largely	offset	by	business	simplification	and	lower	lending	fees.	Noninterest expense	increased	from	the	prior	year,	largely	reflecting	higher	investments	in controls.

Asset	Management	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.	Noninterest	revenue increased	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. Noninterest	expense	increased	from	the	prior	year,	as	the	business	continues	to invest	in	both	infrastructure	and	controls.

Corporate	net	income	was	$864	million,	an	increase	compared	with	a	loss	in	the prior	year.	The	current	year	included	$821	million	of	legal	expense,	compared with	$10.2	billion	of	legal	expense,	which	included	reserves	for	litigation	and regulatory	proceedings,	in	the	prior	year.

# Business	outlook

The	following	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	169	and	the	Risk	Factors section	on	pages	8–17.

Over	the	past	few	years,	the	Firm	has	been	adapting	to	the	regulatory environment	while	continuing	to	serve	its	clients	and	customers,	invest	in	its businesses,	and	deliver	strong	returns	to	its	shareholders.	The	Firm's	initiatives include	building	a	fortress	control	environment,	de-risking	and	simplification	of the	organization,	a	disciplined	approach	to	managing	expense,	evolving	its	capital assessment	framework	as	well	as	rigorous	optimization	of	the	Firm's	balance sheet	and	funding.

The	Firm	has	been	devoting	substantial	resources	to	execute	on	its	control agenda.	The	Oversight	and	Control	function,	established	in	2012,	has	been working	closely	and	extensively	with	the	Firm's	other	control	disciplines, including	Compliance,	Risk	Management,	Legal,	Internal	Audit,	and	other functions,	to	address	the	Firm's	control-related	projects	that	are	cross-line	of business	and	that	have	significant	regulatory	impact	or	respond	to	regulatory actions.	The	Firm's	investment	in	the	control	agenda	and	investment	in technology,	are	considered	by	management	to	be	essential	to	the	Firm's	future.

The	Firm	has	substantially	completed	executing	its	business	simplification agenda.	In	2013,	the	Firm	ceased	originating	student	loans,	exited	certain	high risk	customers	and	became	more	selective	about	on-boarding	certain	customers. Following	on	these	initiatives,	in	2014,	the	Firm	exited	several	non-core	credit card	co-branded	relationships,	sold	the	Retirement	Plan	Services	business	within AM,	exited	certain	prepaid	card	businesses,	reduced	its	offering	of	mortgage banking	products,	completed	the	sale	of	the	CIB's	Global	Special	Opportunity Group	investment	portfolio,	and	the	sale	and	liquidation	of	a	significant	part	of CIB's	physical	commodities	business.	In	January	2015,	the	Firm	completed	the "spin	out"	of	the	One	Equity	Partners	("OEP")	private	equity	business	(together with	a	sale	of	a	portion	of	the	OEP	portfolio	to	a	group	of	private	equity	firms). These	actions	will	allow	the	Firm	to	focus	on	core	activities	for	its	core	clients and	reduce	risk	to	the	Firm.	While	it	is	anticipated	that	these	exits	will	reduce revenues	and	expenses,	they	are	not	expected	to	have	a	meaningful	impact	on	the Firm's	profitability.

The	Firm's	simplification	agenda,	however,	is	more	extensive	than	exiting businesses,	products	or	clients	that	were	non-core,	not	at	scale	or	not	returning the	appropriate	level	of	return.	The	Firm	is	also	focused	on	operational	and structural	simplicity,	and	streamlining	and	centralizing	certain	operational functions	and	processes	in	order	to	attain	more	consistencies	and	efficiencies across	the	Firm.	To	that	end,	the	Firm	is	working	on	simplifying	its	legal	entity structure,	simplifying	its	Global	Technology	function,

rationalizing	its	use	of	vendors,	and	optimizing	its	real	estate	location	strategy. As	the	Firm	continues	to	experience	an	unprecedented	increase	in	regulation	and supervision,	it	continues	to	evolve	its	financial	architecture	to	respond	to	this changing	landscape.	In	2014,	the	Firm	exceeded	the	minimum	capital	levels required	by	the	current	rules	and	intends	to	continue	to	build	capital	in	response to	the	higher	Global	Systemically	Important	Bank	("G-SIB")	capital	surcharge proposed	by	U.S.	banking	regulators.	In	addition,	the	Firm	is	adapting	its	capital assessment	framework	to	review	businesses	and	client	relationships	against	G- SIB	and	applicable	capital	requirements,	and	imposing	internal	limits	on	business activities	to	align	or	optimize	the	Firm's	balance	sheet	and	RWA	with	regulatory requirements	in	order	to	ensure	that	business	activities	generate	appropriate	levels of	shareholder	value.

The	Firm	intends	to	balance	return	of	capital	to	shareholders	with	achieving higher	capital	ratios	over	time.	The	Firm	expects	the	capital	ratio	calculated	under the	Basel	III	Standardized	Approach	to	become	its	binding	constraint	by	the	end of	2015,	or	slightly	thereafter.	The	Firm	anticipates	reaching	Basel	III	Fully Phased-In	Advanced	and	Standardized	CET1	ratios	of	approximately	11%	by	the end	of	2015	and	is	targeting	a	Basel	III	CET1	ratio	of	approximately	12%	by	the end	of	2018,	assuming	a	4.5%	G-SIB	capital	surcharge.	If	the	Firm's	G-SIB capital	surcharge	is	lower	than	4.5%,	the	Firm	will	adjust	its	Basel	III	CET1 target	accordingly.

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") at	G-SIB	organizations.	The	Firm	estimated	that	it	had,	as	of	December	31,	2014, approximately	15%	minimum	TLAC	as	a	percentage	of	Basel	III	Advanced	Fully Phased-in	RWA,	excluding	capital	buffers	currently	in	effect,	based	on	its understanding	of	how	the	Financial	Stability	Board's	proposal	may	be implemented	in	the	U.S.	While	the	precise	composition	and	calibration	of	TLAC, as	well	as	the	conformance	period,	are	yet	to	be	defined	by	U.S.	banking regulators,	the	Firm	expects	the	requirement	will	lead	to	incremental	debt issuance	by	the	Firm	and	higher	funding	costs	over	the	next	few	years.

The	Firm	expects	it	will	continue	to	make	appropriate	adjustments	to	its businesses	and	operations	in	the	year	ahead	in	response	to	ongoing	developments in	the	legal	and	regulatory,	as	well	as	business	and	economic,	environment	in which	it	operates.	The	Firm	intends	to	take	a	disciplined	approach	to	growing revenues	and	controlling	expenses	in	light	of	its	capital	and	liquidity	constraints. The	Firm's	deep	client	relationships	and	its	investments	in	its	businesses, including	branch	optimization,	new	card	relationships,	expansion	into	new markets,	and	hiring	additional	sales	staff	and	client	advisors,	are	expected	to generate	significant	revenue	growth	over	the	next	several	years.	At	the	same	time, the	Firm	intends	to	leverage	its	scale	and	improve	its	operating	efficiencies	so that	it	can	fund	these	growth	initiatives,	as	well	as	maintain	its	control	and

technology	programs,	without	increasing	its	expenses.	As	a	result,	the	Firm anticipates	achieving	a	managed	overhead	ratio	of	approximately	55%	over	the next	several	years,	including	the	impact	of	revenue	growth.

# 2015	Business	Outlook

JPMorgan	Chase's	outlook	for	the	full-year	2015	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.

Management	expects	core	loan	growth	of	approximately	10%	in	2015.	The	Firm continues	to	experience	charge-offs	at	levels	lower	than	its	through-the-cycle expectations;	if	favorable	credit	trends	continue,	management	expects	the	Firm's total	net	charge	offs	could	remain	low,	at	an	amount	modestly	over	$4	billion	in 2015,	and	expects	a	reduction	in	the	consumer	allowance	for	loan	losses	over	the next	two	years.

Firmwide	adjusted	expense	in	2015	is	expected	to	be	approximately	$57	billion, excluding	Firmwide	legal	expenses	and	foreclosure-related	matters.

In	Consumer	&	Business	Banking	within	CCB,	management	expects	continued spread	compression	in	the	deposit	margin	and	a	modest	decline	in	net	interest income	in	the	first	quarter	of	2015.	In	Mortgage	Banking	within	CCB, management	expects	quarterly	servicing	expense	to	decline	to	below	$500	million by	the	second	quarter	of	2015	as	default	volume	continues	to	decline.	In	Card Services	within	CCB,	management	expects	the	revenue	rate	in	2015	to	remain	at the	low	end	of	the	target	range	of	12%	to	12.5%.

In	CIB,	Markets	revenue	in	the	first	quarter	of	2015	will	be	impacted	by	the Firm's	business	simplification	initiatives	completed	in	2014,	resulting	in	a	decline of	approximately	$500	million,	or	10%,	in	Markets	revenue	and	a	decline	of approximately	$300	million	in	expense,	compared	to	the	prior	year	first	quarter. Based	on	strong	performance	to	date,	particularly	in	January,	management currently	expects	2015	first	quarter	Markets	revenue	to	be	higher	than	the	prior year	first	quarter,	even	with	the	negative	impact	of	business	simplification; however,	Markets	revenue	actual	results	will	depend	on	performance	through	the remainder	of	the	quarter,	which	can	be	volatile.

Overall,	the	Firm	expects	the	impact	from	its	business	simplification	initiatives will	be	a	reduction	of	approximately	$1.6	billion	in	revenue	and	a	corresponding reduction	of	approximately	$1.6	billion	in	expense	resulting	in	no	meaningful impact	on	the	Firm's	2015	anticipated	net	income.

The	following	section	provides	a	comparative	discussion	of	JPMorgan	Chase's Consolidated	Results	of	Operations	on	a	reported	basis	for	the	three-year	period ended	December	31,	2014.	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	161–165.

# Revenue

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Investment\tbanking\tfees | $6,542 | $6,354 | $5,808 |
| Principal\ttransactions(a) | 10,531 | 10,141 | 5,536 |
| Lending-\tand\tdeposit-related\tfees | 5,801 | 5,945 | 6,196 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 15,931 | 15,106 | 13,868 |
| Securities\tgains | 77 | 667 | 2,110 |
| Mortgage\tfees\tand\trelated\tincome | 3,563 | 5,205 | 8,687 |
| Card\tincome | 6,020 | 6,022 | 5,658 |
| Other\tincome(b) | 2,106 | 3,847 | 4,258 |
| Noninterest\trevenue | 50,571 | 53,287 | 52,121 |
| Net\tinterest\tincome | 43,634 | 43,319 | 44,910 |
| Total\tnet\trevenue | $94,205 | $96,606 | $97,031 |

(a) Included	funding	valuation	adjustments	(("FVA")	effective	2013))	and	debit	valuation adjustments	("DVA")	on	over-the-counter	("OTC")	derivatives	and	structured	notes, measured	at	fair	value.	FVA	and	DVA	gains/(losses)	were	$468	million	and	$(1.9)	billion for	the	years	ended	December	31,	2014	and	2013,	respectively.	DVA	losses	were	($930) million	for	the	year	ended	December	31,	2012.

Total	net	revenue	for	2014	was	down	by	$2.4	billion,	or	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	fee levels.	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	compared	with	a	stronger	prior	year,	and	lower	loan syndication	fees	on	lower	industry-wide	fee	levels.	Investment	banking	fee	share and	industry-wide	data	are	sourced	from	Dealogic,	an	external	vendor.	For additional	information	on	investment

banking	fees,	see	CIB	segment	results	on	pages	92–96,	CB	segment	results	on pages	97–99,	and	Note	7.

Principal	transactions	revenue,	which	consists	of	revenue	primarily	from	the Firm's	client-driven	market-making	and	private	equity	investing	activities, increased	compared	with	the	prior	year	as	the	prior	year	included	a	$1.5	billion loss	related	to	the	implementation	of	the	FVA	framework	for	OTC	derivatives and	structured	notes.	The	increase	was	also	due	to	higher	private	equity	gains	as	a result	of	higher	net	gains	on	sales.	The	increase	was	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.	For additional	information	on	principal	transactions	revenue,	see	CIB	and	Corporate segment	results	on	pages	92–96	and	pages	103–104,	respectively,	and	Note	7.

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.	For	additional	information	on	lending-	and	deposit-related	fees, see	the	segment	results	for	CCB	on	pages	81–91,	CIB	on	pages	92–96	and	CB	on pages	97–99.

Asset	management,	administration	and	commissions	revenue	increased	compared with	the	prior	year,	reflecting	higher	asset	management	fees	driven	by	net	client inflows	and	the	effect	of	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	the	second	half	of	2013.	For	additional information	on	these	fees	and	commissions,	see	the	segment	discussions	of	CCB on	pages	81–91,	AM	on	pages	100–102,	and	Note	7.

Securities	gains	decreased	compared	with	the	prior	year,	reflecting	lower repositioning	activity	related	to	the	Firm's	investment	securities	portfolio.	For additional	information,	see	the	Corporate	segment	discussion	on	pages	103–104 and	Note	12.

Mortgage	fees	and	related	income	decreased	compared	with	the	prior	year.	The decrease	was	predominantly	due	to	lower	net	production	revenue	driven	by	lower volumes	due	to	higher	levels	of	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").	For	additional	information, see	the	segment	discussion	of	CCB	on	pages	85–87	and	Note	17.

Card	income	remained	relatively	flat	but	included	higher	net	interchange	income on	credit	and	debit	cards	due	to	growth	in	sales	volume,	offset	by	higher amortization	of	new	account	origination	costs.	For	additional	information	on credit	card	income,	see	CCB	segment	results	on	pages	81–91.

Other	income	decreased	from	the	prior	year,	predominantly	as	a	result	of	the absence	of	two	significant	items	recorded	in	Corporate	in	2013,	namely:	a	$1.3 billion	gain	on	the	sale	of	Visa	shares	and	a	$493	million	gain	from	the	sale	of One	Chase	Manhattan	Plaza.	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,	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	fully	taxable-equivalent	("FTE")	basis, was	2.18%,	a	decrease	of	5	basis	points	from	the	prior	year.

Total	net	revenue	for	2013	was	down	by	$425	million,	or	less	than	1%.	The	2013 results	were	driven	by	lower	mortgage	fees	and	related	income,	net	interest income,	and	securities	gains,	predominantly	offset	by	higher	principal transactions	revenue,	and	asset	management,	administration	and	commissions revenue.

Investment	banking	fees	increased	compared	with	the	prior	year,	reflecting	higher equity	and	debt	underwriting	fees,	partially	offset	by	lower	advisory	fees.	Equity and	debt	underwriting	fees	increased,	driven	by	strong	market	issuance	and greater	share	of	fees	in	equity	capital	markets	and	loans.	Advisory	fees	decreased, as	industry-wide	M&A	fee	levels	declined.	Investment	banking	fee	share	and industry-wide	data	are	sourced	from	Dealogic,	an	external	vendor.

Principal	transactions	revenue	increased	compared	with	the	prior	year,	reflecting CIB's	strong	equity	markets	revenue,	partially	offset	by	a	$1.5	billion	loss	from implementing	a	FVA	framework	for	OTC	derivatives	and	structured	notes	in	the fourth	quarter	of	2013,	and	a	$452	million	loss	from	DVA	on	structured	notes and	derivative	liabilities	(compared	with	a	$930	million	loss	from	DVA	in	the prior	year).	The	prior	year	also	included	a	$5.8	billion	loss	on	the	synthetic	credit portfolio	incurred	by	CIO	in	the	six	months	ended	June	30,	2012;	a	$449	million loss	on	the	index	credit	derivative	positions	retained	by	CIO	in	the	three	months ended	September	30,	2012;	and	additional	modest	losses	incurred	by	CIB	from the	synthetic	credit	portfolio	in	the	last	six	months	of	2012.	These	losses	were partially	offset	by	a	$665	million	gain	recognized	in	2012	in	Corporate, representing	the	recovery	on	a	Bear	Stearns-related	subordinated	loan.

Lending-	and	deposit-related	fees	decreased	compared	with	the	prior	year,	largely due	to	lower	deposit-related	fees	in	CCB,	resulting	from	reductions	in	certain product	and	transaction	fees.

Asset	management,	administration	and	commissions	revenue	increased	from 2012,	driven	by	higher	investment	management	fees	in	AM	due	to	net	client inflows,	the	effect	of	higher	market	levels,	and	higher	performance	fees,	and	to higher	investment	sales	revenue	in	CCB.

Securities	gains	decreased	compared	with	the	prior-year	period,	reflecting	the results	of	repositioning	the	CIO	available-for-sale	("AFS")	portfolio.

Mortgage	fees	and	related	income	decreased	in	2013	compared	with	2012, reflecting	lower	Mortgage	Banking	net	production	and	servicing	revenue.	The decrease	in	net	production	revenue	was	due	to	lower	margins	and	volumes.	The decrease	in	net	servicing	revenue	was	predominantly	due	to	lower	MSR	risk management	results.

Card	income	increased	compared	with	the	prior	year	period,	driven	by	higher	net interchange	income	on	credit	and	debit	cards	and	higher	merchant	servicing revenue	due	to	growth	in	sales	volume.

Other	income	decreased	in	2013	compared	with	the	prior	year,	predominantly reflecting	lower	revenues	from	significant	items	recorded	in	Corporate.	In	2013, the	Firm	recognized	a	$1.3	billion	gain	on	the	sale	of	Visa	shares,	a	$493	million gain	from	the	sale	of	One	Chase	Manhattan	Plaza,	and	a	modest	loss	related	to the	redemption	of	TruPS.	In	2012,	the	Firm	recognized	a	$1.1	billion	benefit from	the	Washington	Mutual	bankruptcy	settlement	and	an	$888	million extinguishment	gain	related	to	the	redemption	of	TruPS.	The	net	decrease	was partially	offset	by	higher	revenue	in	CIB,	largely	from	client-driven	activity.

Net	interest	income	decreased	in	2013	compared	with	the	prior	year,	primarily reflecting	the	impact	of	the	runoff	of	higher	yielding	loans	and	originations	of lower	yielding	loans,	and	lower	trading-related	net	interest	income.	The	decrease in	net	interest	income	was	partially	offset	by	lower	long-term	debt	and	other funding	costs.	The	Firm's	average	interest-earning	assets	were	$2.0	trillion	in 2013,	and	the	net	interest	yield	on	those	assets,	on	a	FTE	basis,	was	2.23%,	a decrease	of	25	basis	points	from	the	prior	year.

# Provision	for	credit	losses

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Consumer,\texcluding\tcredit\tcard | $419 | $(1,871) | $302 |
| Credit\tcard | 3,079 | 2,179 | 3,444 |
| Total\tconsumer | 3,498 | 308 | 3,746 |
| Wholesale | (359) | (83) | (361) |
| Total\tprovision\tfor\tcredit\tlosses | $3,139 | $225 | $3,385 |

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	release 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.	For	a	more	detailed	discussion	of	the	credit portfolio	and	the	allowance	for	credit	losses,	see	the	segment	discussions	of	CCB on	pages	81–91,	CIB	on	pages	92–96	and	CB	on	pages	97–99,	and	the Allowance	for	credit	losses	section	on	pages	128–130.

The	provision	for	credit	losses	decreased	by	$3.2	billion	compared	with	the	prior year,	due	to	a	higher	benefit	from	reductions	in	the	allowance	for	loan	losses,	as well	as	lower	net	charge-offs	partially	due	to	incremental	charge-offs	recorded	in 2012	in	accordance	with	regulatory	guidance	on	certain	loans	discharged	under Chapter	7	bankruptcy.	The	consumer	allowance	release	in	2013	reflected	the improvement	in	home	prices	in	the	residential	real	estate	portfolio	and improvement	in	delinquencies	in	the	residential	real	estate	and	credit	card portfolios.	The	2013	wholesale	provision	reflected	a	favorable	credit	environment and	stable	credit	quality	trends.

# Noninterest	expense

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Compensation\texpense | $30,160 | $30,810 | $30,585 |
| Noncompensation\texpense: |  |  |  |
| Occupancy | 3,909 | 3,693 | 3,925 |
| Technology,\tcommunications\tand\tequipment | 5,804 | 5,425 | 5,224 |
| Professional\tand\toutside\tservices | 7,705 | 7,641 | 7,429 |
| Marketing | 2,550 | 2,500 | 2,577 |
| Other(a)(b) | 11,146 | 20,398 | 14,989 |
| Total\tnoncompensation\texpense | 31,114 | 39,657 | 34,144 |
| Total\tnoninterest\texpense | $61,274 | $70,467 | $64,729 |

Total	noninterest	expense	decreased	by	$9.2	billion,	or	13%,	from	the	prior	year, driven	by	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's	Mortgage	Banking	business,	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	lower	production	and	servicing-related	expense	in CCB's	Mortgage	Banking	business,	lower	FDIC-related	assessments,	and	lower amortization	expense	due	to	the	completion	of	the	amortization	of	certain 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.	For	a	further	discussion	of	legal expense,	see	Note	31.	For	a	discussion	of	amortization	of	intangibles,	refer	to Note	17.

Total	noninterest	expense	was	up	by	$5.7	billion,	or	9%,	compared	with	the	prior year,	predominantly	due	to	higher	legal	expense.

Compensation	expense	increased	in	2013	compared	with	the	prior	year,	due	to	the impact	of	investments	across	the	businesses,	including	front	office	sales	and support	staff,	and	costs	related	to	the	Firm's	control	agenda;	these	were	partially offset	by	lower	compensation	expense	in	CIB	and	in	CCB's	Mortgage	Banking business,	reflecting	the	effect	of	lower	servicing	headcount.

Noncompensation	expense	increased	in	2013	from	the	prior	year.	The	increase was	due	to	higher	other	expense,	reflecting	$11.1	billion	of	firmwide	legal expense,	predominantly	in	Corporate,	representing	additional	reserves	for	several litigation	and	regulatory	proceedings,	compared	with	$5.0	billion	of	expense	in the	prior	year.	Investments	in	the	businesses,	higher	legal-related	professional services	expense,	and	costs	related	to	the	Firm's	control	agenda	also	contributed to	the	increase.	The	increase	was	offset	partially	by	lower	mortgage	servicing expense	in	CCB	and	lower	occupancy	expense	for	the	Firm,	which	predominantly reflected	the	absence	of	charges	recognized	in	2012	related	to	vacating	excess space.

# Income	tax	expense

| (in	millions,	except	rate) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Income\tbefore\tincome\ttax\texpense | $29,792 | $25,914 | $28,917 |
| Income\ttax\texpense | 8,030 | 7,991 | 7,633 |
| Effective\ttax\trate | 27.0% | 30.8% | 26.4% |

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.	For	additional	information	on	income	taxes,	see	Critical	Accounting Estimates	Used	by	the	Firm	on	pages	161–165	and	Note	26.

The	increase	in	the	effective	tax	rate	compared	with	the	prior	year	was predominantly	due	to	the	effect	of	higher	nondeductible	legal-related	penalties	in 2013.	This	was	largely	offset	by	the	impact	of	lower	pretax	income,	in combination	with	changes	in	the	mix	of	income	and	expense	subject	to U.S.	federal,	state	and	local	taxes,	business	tax	credits,	tax	benefits	associated with	prior	year	tax	adjustments	and	audit	resolutions.

# Selected	Consolidated	balance	sheets	data

| December	31,	(in	millions) | 2014 | 2013 | Change |
| :--- | :--- | :--- | :--- |
| Assets |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | $27,831 | $39,771 | (30)% |
| Deposits\twith\tbanks | 484,477 | 316,051 | 53 |
| Federal\tfunds\tsold\tand\tsecurities\npurchased\tunder\tresale\tagreements | 215,803 | 248,116 | (13) |
| Securities\tborrowed | 110,435 | 111,465 | (1) |
| Trading\tassets: |  |  |  |
| Debt\tand\tequity\tinstruments | 320,013 | 308,905 | 4 |
| Derivative\treceivables | 78,975 | 65,759 | 20 |
| Securities | 348,004 | 354,003 | (2) |
| Loans | 757,336 | 738,418 | 3 |
| Allowance\tfor\tloan\tlosses | (14,185) | (16,264) | (13) |
| Loans,\tnet\tof\tallowance\tfor\tloan\nlosses | 743,151 | 722,154 | 3 |
| Accrued\tinterest\tand\taccounts\nreceivable | 70,079 | 65,160 | 8 |
| Premises\tand\tequipment | 15,133 | 14,891 | 2 |
| Goodwill | 47,647 | 48,081 | (1) |
| Mortgage\tservicing\trights | 7,436 | 9,614 | (23) |
| Other\tintangible\tassets | 1,192 | 1,618 | (26) |
| Other\tassets | 102,950 | 110,101 | (6) |
| Total\tassets | $2,573,126 | $2,415,689 | 7 |
| Liabilities |  |  |  |
| Deposits | $1,363,427 | $1,287,765 | 6 |
| Federal\tfunds\tpurchased\tand |  |  |  |
| securities\tloaned\tor\tsold\tunder |  |  |  |
| repurchase\tagreements | 192,101 | 181,163 | 6 |
| Commercial\tpaper | 66,344 | 57,848 | 15 |
| Other\tborrowed\tfunds | 30,222 | 27,994 | 8 |
| Trading\tliabilities: |  |  |  |
| Debt\tand\tequity\tinstruments | 81,699 | 80,430 | 2 |
| Derivative\tpayables | 71,116 | 57,314 | 24 |
| Accounts\tpayable\tand\tother\tliabilities | 206,954 | 194,491 | 6 |
| Beneficial\tinterests\tissued\tby\nconsolidated\tVIEs | 52,362 | 49,617 | 6 |
| Long-term\tdebt | 276,836 | 267,889 | 3 |
| Total\tliabilities | 2,341,061 | 2,204,511 | 6 |
| Stockholders'\tequity | 232,065 | 211,178 | 10 |
| Total\tliabilities\tand\tstockholders'\nequity | $2,573,126 | $2,415,689 | 7\t% |

# Consolidated	balance	sheets	overview

JPMorgan	Chase's	total	assets	and	total	liabilities	increased	by	$157.4	billion	and $136.6	billion,	respectively,	from	December	31,	2013.

The	following	is	a	discussion	of	the	significant	changes	in	the	Consolidated balance	sheets	from	December	31,	2013.

# Cash	and	due	from	banks	and	deposits	with	banks

The	net	increase	was	attributable	to	higher	levels	of	excess	funds	primarily	as	a result	of	growth	in	deposits.	The	Firm's	excess	funds	were	placed	with	various central	banks,	predominantly	Federal	Reserve	Banks.

# Federal	funds	sold	and	securities	purchased	under	resale	agreements

The	decrease	in	federal	funds	sold	and	securities	purchased	under	resale agreements	was	predominantly	attributable	to	a	shift	in	the	deployment	of	the Firm's	excess	cash	by	Treasury	to	deposits	with	banks	and	to	client	activity, including	a	decline	in	public	deposits	that	require	collateral.

# Trading	assets	and	liabilities–debt	and	equity	instruments

The	increase	in	trading	assets	and	liabilities	predominantly	related	to	client- driven	market-making	activities	in	CIB	was	primarily	driven	by	higher	levels	of debt	securities	and	trading	loans.	For	additional	information,	refer	to	Note	3.

# Trading	assets	and	liabilities–derivative	receivables	and	payables

The	increase	in	both	receivables	and	payables	was	predominantly	due	to	client- driven	market-making	activities	in	CIB,	specifically	in	interest	rate	derivatives	as a	result	of	market	movements;	commodity	derivatives	predominantly	driven	by the	significant	decline	in	oil	prices;	and	foreign	exchange	derivatives	reflecting the	appreciation	of	the	U.S.	dollar	against	certain	currencies.	The	increases	were partially	offset	by	a	decline	in	equity	derivatives.	For	additional	information, refer	to	Derivative	contracts	on	pages	125–127,	and	Notes	3	and	5.

# Securities

The	decrease	was	predominantly	due	to	lower	levels	of	non-U.S.	residential mortgage-backed	securities	and	U.S.	Treasuries,	partially	offset	by	higher	levels of	obligations	of	U.S.	states	and	municipalities	and	U.S.	residential	mortgage- backed	securities.	For	additional	information	related	to	securities,	refer	to	the discussion	in	the	Corporate	segment	on	pages	103–104,	and	Notes	3	and	12.

# Loans	and	allowance	for	loan	losses

The	increase	in	loans	was	attributable	to	higher	consumer	and	wholesale	loans. The	increase	in	consumer	loans	was	due	to	prime	mortgage	originations	in	CCB and	AM,	as	well	as	credit	card,	business	banking	and	auto	loan	originations	in CCB,	partially	offset	by	paydowns	and	charge-offs	or	liquidation	of	delinquent loans.	The	increase	in	wholesale	loans	was	due	to	a	favorable	credit	environment throughout	2014,	which	drove	an	increase	in	client	activity.

The	decrease	in	the	allowance	for	loan	losses	was	driven	by	a	reduction	in	the consumer	allowance,	predominantly	as	a	result	of	continued	improvement	in home	prices	and	delinquencies	in	the	residential	real	estate	portfolio.	For	a	more detailed	discussion	of	the	loan	portfolio	and	the	allowance	for	loan	losses,	refer	to Credit	Risk	Management	on	pages	110–111,	and	Notes	3,	4,	14	and	15.

# Accrued	interest	and	accounts	receivable

The	increase	was	due	to	higher	receivables	from	security	sales	that	did	not	settle, and	higher	client	receivables	related	to	client-driven	market-making	activities	in CIB.

# Mortgage	servicing	rights

For	additional	information	on	MSRs,	see	Note	17.

# Other	assets

The	decrease	was	driven	by	several	factors,	including	lower	deferred	tax	assets;

lower	private	equity	investments	due	to	sales,	partially	offset	by	unrealized	gains; and	lower	real	estate	owned.

# Deposits

The	increase	was	attributable	to	higher	consumer	and	wholesale	deposits.	The increase	in	consumer	deposits	reflected	a	continuing	positive	growth	trend, resulting	from	strong	customer	retention,	maturing	of	recent	branch	builds,	and net	new	business.	The	increase	in	wholesale	deposits	was	driven	by	client	activity and	business	growth.	For	more	information	on	consumer	deposits,	refer	to	the CCB	segment	discussion	on	pages	81–91;	the	Liquidity	Risk	Management discussion	on	pages	156–160;	and	Notes	3	and	19.	For	more	information	on wholesale	client	deposits,	refer	to	the	AM,	CB	and	CIB	segment	discussions	on pages	100–102,	pages	97–99	and	pages	92–96,	respectively,	and	the	Liquidity Risk	Management	discussion	on	pages	156–160.

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

The	increase	in	federal	funds	purchased	and	securities	loaned	or	sold	under repurchase	agreements	was	predominantly	attributable	to	higher	financing	of	the Firm's	trading	assets-debt	and	equity	instruments.	The	increase	was	partially offset	by	client	activity	in	CIB.	For	additional	information	on	the	Firm's Liquidity	Risk	Management,	see	pages	156–160.

# Commercial	paper

The	increase	was	due	to	commercial	paper	issuances	in	the	wholesale	markets consistent	with	Treasury's	liquidity	and	short-term	funding	plans	and,	to	a	lesser extent,	a	higher	volume	of	liability	balances	related	to	CIB's	liquidity management	product	whereby	clients	choose	to	sweep	their	deposits	into commercial	paper.	For	additional	information	on	the	Firm's	other	borrowed funds,	see	Liquidity	Risk	Management	on	pages	156–160.

# Accounts	payable	and	other	liabilities

The	increase	was	attributable	to	higher	client	payables	related	to	client	short positions,	and	higher	payables	from	security	purchases	that	did	not	settle,	both	in CIB.	The	increase	was	partially	offset	by	lower	legal	reserves,	largely	reflecting the	settlement	of	legal	and	regulatory	matters.

# Beneficial	interests	issued	by	consolidated	VIEs

The	increase	was	predominantly	due	to	net	new	consolidated	credit	card	and municipal	bond	vehicles,	partially	offset	by	a	reduction	in	conduit	commercial paper	issued	to	third	parties	and	the	deconsolidation	of	certain	mortgage securitization	trusts.	For	further	information	on	Firm-sponsored	VIEs	and	loan securitization	trusts,	see	Off-Balance	Sheet	Arrangements	on	pages	74–75	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	156–160.

# 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	actions	on	page	154.

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	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,	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,	2014	and 2013,	was	$12.1	billion	and	$15.5	billion,	respectively.	The	aggregate	amounts	of commercial	paper	outstanding	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 $9.9	billion	and	$9.2	billion	at	December	31,	2014	and	2013,	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	or	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	125	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,	2014.	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	the 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, |  |  | 2014 |  |  | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2015 | 2016-2017 | 2018-2019 | After\t2019 | Total | Total |
| On-balance\tsheet\tobligations |  |  |  |  |  |  |
| Deposits(a) | $1,345,919 | $8,200 | $3,318 | $4,160 | $1,361,597 | $1,286,587 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\nrepurchase\tagreements | 189,002 | 2,655 | 30 | 441 | 192,128 | 181,163 |
| Commercial\tpaper | 66,344 | — | — | — | 66,344 | 57,848 |
| Other\tborrowed\tfunds(a) | 15,734 | — | — | — | 15,734 | 15,655 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs (a) | 27,833 | 12,860 | 6,125 | 3,382 | 50,200 | 47,621 |
| Long-term\tdebt(a) | 33,982 | 86,620 | 61,468 | 80,818 | 262,888 | 256,739 |
| Other(b) | 3,494 | 1,217 | 1,022 | 2,622 | 8,355 | 7,720 |
| Total\ton-balance\tsheet\tobligations | 1,682,308 | 111,552 | 71,963 | 91,423 | 1,957,246 | 1,853,333 |
| Off-balance\tsheet\tobligations |  |  |  |  |  |  |
| Unsettled\treverse\trepurchase\tand\tsecurities\tborrowing\nagreements(c) | 40,993 | — | — | — | 40,993 | 38,211 |
| Contractual\tinterest\tpayments(d) | 6,980 | 10,006 | 6,596 | 24,456 | 48,038 | 48,021 |
| Operating\tleases(e) | 1,722 | 3,216 | 2,402 | 5,101 | 12,441 | 14,266 |
| Equity\tinvestment\tcommitments(f) | 454 | 92 | 50 | 512 | 1,108 | 2,119 |
| Contractual\tpurchases\tand\tcapital\texpenditures | 1,216 | 970 | 366 | 280 | 2,832 | 3,425 |
| Obligations\tunder\taffinity\tand\tco-brand\tprograms | 906 | 1,262 | 96 | 39 | 2,303 | 3,283 |
| Other | — | — | — | — | — | 11 |
| Total\toff-balance\tsheet\tobligations | 52,271 | 15,546 | 9,510 | 30,388 | 107,715 | 109,336 |
| Total\tcontractual\tcash\tobligations | $1,734,579 | $127,098 | $81,473 | $121,811 | $2,064,961 | $1,962,669 |

(a) Excludes	structured	notes	where	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.	Prior	periods	were	revised	to conform	with	the	current	presentation.

(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	where	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	$2.2	billion	and	$2.6	billion	at	December	31,	2014	and	2013,	respectively.

(f) At	December	31,	2014	and	2013,	included	unfunded	commitments	of	$ 147	million	and	$215	million,	respectively,	to	third-party	private	equity	funds;	and	 $961	million	and	$1.9	billion	of	unfunded commitments,	respectively,	to	other	equity	investments.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tprovided\tby/(used\tin) |  |  |  |
| Operating\tactivities | $36,593 | $107,953 | $25,079 |
| Investing\tactivities | (165,636) | (150,501) | (119,825) |
| Financing\tactivities | 118,228 | 28,324 | 87,707 |
| Effect\tof\texchange\trate\tchanges\ton\ncash | (1,125) | 272 | 1,160 |
| Net\tdecrease\tin\tcash\tand\tdue\tfrom\nbanks | $(11,940) | $(13,952) | $(5,879) |

# Operating	activities

JPMorgan	Chase's	operating	assets	and	liabilities	support	the	Firm's	capital markets	and	lending	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	the	Firm's	ability	to	generate	cash	through	short-	and	long- term	borrowings	are	sufficient	to	fund	the	Firm's	operating	liquidity	needs.

Cash	provided	by	operating	activities	in	2014	predominantly	resulted	from	net income	after	noncash	operating	adjustments	and	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.	Cash	used	in 2013	for	loans	originated	and	purchased	with	an	initial	intent	to	sell	was	slightly higher	than	the	cash	proceeds	received	from	sales	and	paydowns	of	loans	and reflected	significantly	higher	levels	of	activities	over	the	prior-year	period.	Cash provided	during	2012	resulted	from	a	decrease	in	securities	borrowed	reflecting	a shift	in	the	deployment	of	excess	cash	to	resale	agreements	as	well	as	lower	client activity	in	CIB;	partially	offset	by	a	decrease	in	accounts	payable	and	other liabilities	predominantly	due	to	lower	CIB	client	balances.

# 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	used	in	investing	activities	during	2014,	2013,	and	2012 resulted	from	increases	in	deposits	with	banks,	attributable	to	higher	levels	of excess	funds;	in	2014,	cash	was	used	for	growth	in	wholesale	and	consumer loans,	while	in	2013	and	2012	cash	used	reflected	growth	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 and	2012	from	paydowns	and	portfolio	runoff	or	liquidation	of	delinquent	loans. In	2012,	additional	cash	was	used	for	securities	purchased	under	resale agreements.	All	years	reflected	cash	proceeds	from	net	maturities	and	sales	of investment	securities.

# Financing	activities

The	Firm's	financing	activities	includes	cash	from	customer	deposits,	and	cash proceeds	from	issuing	long-term	debt,	and	preferred	and	common	stock.	Cash provided	by	financing	activities	in	2014	predominantly	resulted	from	higher consumer	and	wholesale	deposits.	The	increase	in	consumer	deposits	reflected	a continuing	positive	growth	trend	resulting	from	strong	customer	retention, maturing	of	recent	branch	builds,	and	net	new	business.	The	increase	in wholesale	deposits	was	driven	by	client	activity	and	deposit	growth.	Cash provided	in	2013	was	driven	by	growth	in	both	wholesale	and	consumer	deposits, net	proceeds	from	long-term	borrowings,	and	net	issuance	of	preferred	stock; partially	offset	by	a	decrease	in	securities	loaned	or	sold	under	repurchase agreements,	predominantly	due	to	changes	in	the	mix	of	the	Firm's	funding sources.	Cash	provided	in	2012	was	due	to	growth	in	both	consumer	and wholesale	deposits	and	an	increase	in	federal	funds	purchased	and	securities loaned	or	sold	under	repurchase	agreements	due	to	higher	secured	financings	of the	Firm's	assets.	In	all	periods,	cash	proceeds	were	offset	by	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 Balance	Sheet	Analysis	on	pages	72–73.

# 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	172–176.	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	and	the	results	of	the	lines	of	business	on	a	"managed" basis,	which	is	a	non-GAAP	financial	measure.	The	Firm's	definition	of	managed basis	starts	with	the	reported	U.S.	GAAP	results	and	includes	certain reclassifications	to	present	total	net	revenue	for	the	Firm	(and	each	of	the reportable	business	segments)	on	a	FTE	basis.	Accordingly,	revenue	from investments	that	receive	tax	credits	and	tax-exempt	securities	is	presented	in	the managed	results	on	a	basis

comparable	to	taxable	investments	and	securities.	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.

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.

|  |  | 2014 |  |  | 2013 |  |  | 2012 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 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 | $2,106 | $2,733 | $4,839 | $3,847 | $2,495 | $6,342 | $4,258 | $2,116 | $6,374 |
| Total\tnoninterest\trevenue | 50,571 | 2,733 | 53,304 | 53,287 | 2,495 | 55,782 | 52,121 | 2,116 | 54,237 |
| Net\tinterest\tincome | 43,634 | 985 | 44,619 | 43,319 | 697 | 44,016 | 44,910 | 743 | 45,653 |
| Total\tnet\trevenue | 94,205 | 3,718 | 97,923 | 96,606 | 3,192 | 99,798 | 97,031 | 2,859 | 99,890 |
| Pre-provision\tprofit | 32,931 | 3,718 | 36,649 | 26,139 | 3,192 | 29,331 | 32,302 | 2,859 | 35,161 |
| Income\tbefore\tincome\ttax\texpense | 29,792 | 3,718 | 33,510 | 25,914 | 3,192 | 29,106 | 28,917 | 2,859 | 31,776 |
| Income\ttax\texpense | 8,030 | 3,718 | 11,748 | 7,991 | 3,192 | 11,183 | 7,633 | 2,859 | 10,492 |
| Overhead\tratio | 65% | NM | 63% | 73% | NM | 71% | 67% | NM | 65% |

(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	110–111,	and	Regulatory capital	on	pages	146–153.

# 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) | 2014 | 2013 | 2014 | 2013 | 2012 |
| Common\tstockholders'\tequity | $212,002 | $200,020 | $207,400 | $196,409 | $184,352 |
| Less:\tGoodwill | 47,647 | 48,081 | 48,029 | 48,102 | 48,176 |
| Less:\tCertain\tidentifiable\tintangible\tassets | 1,192 | 1,618 | 1,378 | 1,950 | 2,833 |
| Add:\tDeferred\ttax\tliabilities(a) | 2,853 | 2,953 | 2,950 | 2,885 | 2,754 |
| Tangible\tcommon\tequity | $166,016 | $153,274 | $160,943 | $149,242 | $136,097 |
| Return\ton\ttangible\tcommon\tequity | NA | NA | 13% | 11% | 15% |
| Tangible\tbook\tvalue\tper\tshare | $44.69 | $40.81 | NA | NA | NA |

(a) Represents	deferred	tax	liabilities	related	to	tax-deductible	goodwill	and	to	identifiable	intangibles	created	in	nontaxable	transactions,	which	are	netted	against	goodwill	and	other	intangibles	when calculating	TCE.

# Core	net	interest	income

In	addition	to	reviewing	net	interest	income	on	a	managed	basis,	management also	reviews	core	net	interest	income	to	assess	the	performance	of	its	core lending,	investing	(including	asset-liability	management)	and	deposit-raising activities.	These	activities	exclude	the	impact	of	CIB's	market-based	activities. The	core	data	presented	below	are	non-GAAP	financial	measures	due	to	the exclusion	of	CIB's	market-based	net	interest	income	and	related	assets. Management	believes	this	exclusion	provides	investors	and	analysts	another measure	by	which	to	analyze	the	non-market-related	business	trends	of	the	Firm and	provides	a	comparable	measure	to	other	financial	institutions	that	are primarily	focused	on	core	lending,	investing	and	deposit-raising	activities.

# Core	net	interest	income	data

| (in	millions,	except	rates) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Net\tinterest\tincome\t-\tmanaged |  |  |  |
| basis(a)(b) | $44,619 | $44,016 | $45,653 |
| Less:\tMarket-based\tnet\tinterest\tincome(c) | 5,552 | 5,492 | 6,223 |
| Core\tnet\tinterest\tincome(a)(c) | $39,067 | $38,524 | $39,430 |
| Average\tinterest-earning\tassets | $2,049,093 | $1,970,231 | $1,842,417 |
| Less:\tAverage\tmarket-based\tearning\tassets | 510,261 | 504,218 | 499,339 |
| Core\taverage\tinterest-earning\tassets | $1,538,832 | $1,466,013 | $1,343,078 |
| Net\tinterest\tyield\ton\tinterest-earning\tassets\n-\tmanaged\tbasis | 2.18% | 2.23% | 2.48% |
| Net\tinterest\tyield\ton\tmarket-based\tactivities(c) | 1.09 | 1.09 | 1.25 |
| Core\tnet\tinterest\tyield |  |  |  |
| \t\ton\tcore\taverage |  |  |  |
| \t\tinterest-earning\tassets(c) | 2.54% | 2.63% | 2.94% |

(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	77.

(c) Effective	with	the	fourth	quarter	of	2014,	the	Firm	changed	the	methodology	it	uses	to	allocate	preferred	stock dividends	to	the	lines	of	business.	Prior	period	amounts	were	revised	to	conform	with	the	current	allocation methodology.	The	Firm's	Consolidated	balance	sheets	and	consolidated	results	of	operations	were	not	affected by	this	reporting	change.	For	further	discussion	please	see	Preferred	stock	dividend	allocation	reporting	change on	pages	79–80.

Core	net	interest	income	increased	by	$543	million	in	2014	to	$39.1	billion,	and core	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	core	net	interest	yield decreasing	by	9	basis	points	to	2.54%	for	2014.

Core	net	interest	income	decreased	by	$906	million	in	2013	to	$38.5	billion,	and core	average	interest-earning	assets	increased	by	$122.9	billion	to	$1.5	trillion. The	decline	in	net	interest	income	in	2013	primarily	reflected	the	impact	of	the runoff	of	higher-yielding	loans	and	originations	of	lower-yielding	loans.	The decrease	in	net	interest	income	was	partially	offset	by	lower	long-term	debt	and other	funding	costs.	The	increase	in	average	interest-earning	assets	reflected	the impact	of	higher	deposits	with	banks.	The	core	net	interest	yield	decreased	by	31 basis	points	to	2.63%	in	2013,	primarily	reflecting	the	impact	of	a	significant increase	in	deposits	with	banks	and	lower	loan	yields,	partially	offset	by	the impact	of	lower	long-term	debt	yields	and	deposit	rates.

The	Firm	is	managed	on	a	line	of	business	basis.	There	are	four	major	reportable business	segments	–	Consumer	&	Community	Banking,	Corporate	&	Investment Bank,	Commercial	Banking	and	Asset	Management.	In	addition,	there	is	a Corporate	segment.

The	business	segments	are	determined	based	on	the	products	and	services provided,	or	the	type	of	customer	served,	and	they	reflect	the	manner	in	which financial	information	is	currently	evaluated	by	management.	Results	of	these lines	of	business	are	presented	on	a	managed	basis.	For	a	definition	of	managed basis,	see	Explanation	and	Reconciliation	of	the	Firm's	use	of	non-GAAP financial	measures,	on	pages	77–78.

# 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	continues	to	assess	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").

Preferred	stock	dividend	allocation	reporting	change

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

The	following	chart	depicts	how	preferred	stock	dividends	were	allocated	to	the business	segments	before	and	after	the	aforementioned	methodology	change.

# Business	segment	capital	allocation	changes

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	measures.	The	amount	of capital	assigned	to	each	business	is	referred	to	as	equity.	On	at	least	an	annual basis,	the	Firm	assesses	the	level	of	capital	required	for	each	line	of	business	as well	as	the	assumptions	and	methodologies	used	to	allocate	capital	to	its	lines	of business	and	updates	the	equity	allocations	to	its	lines	of	business	as	refinements are	implemented.	For	further	information	about	these	capital	changes,	see	Line	of business	equity	on	page	153.

# Expense	allocation

Where	business	segments	use	services	provided	by	support	units	within	the	Firm, 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	upon	usage	of	the	services	provided.	In	contrast,	certain	other	expense related	to	certain	corporate	functions,	or	to	certain	technology	and	operations,	are not	allocated	to	the	business	segments	and	are	retained	in	Corporate.	Retained expense	includes:	parent	company	costs	that	would	not	be	incurred	if	the segments	were	stand-alone	businesses;	adjustments	to	align	certain	corporate staff,	technology	and	operations	allocations	with	market	prices;	and	other	items not	aligned	with	a	particular	business	segment.

# Segment	Results	–	Managed	Basis(a)

The	following	table	summarizes	the	business	segment	results	for	the	periods	indicated.

(a) Effective	with	the	fourth	quarter	of	2014,	the	Firm	changed	the	methodology	it	uses	to	allocate	preferred	stock	dividends	to	the	lines	of	business.	Prior	period	amounts	for	net	revenue,	pre-provision	profit/(loss)	and	net	income/(loss)	for	each of	the	business	segments	were	revised	to	conform	with	the	current	allocation	methodology.	The	Firm's	Consolidated	balance	sheets	and	consolidated	results	of	operations	were	not	affected	by	this	reporting	change.	For	further	discussion please	see	Preferred	stock	dividend	allocation	reporting	change	in	Business	Segment	Results	on	pages	79–80.

# 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,	Mortgage	Banking	(including	Mortgage	Production,

Mortgage	Servicing	and	Real	Estate	Portfolios)	and	Card,	Merchant

Services	&	Auto	("Card").	Consumer	&	Business	Banking	offers	deposit and	investment	products	and	services	to	consumers,	and	lending,	deposit, and	cash	management	and	payment	solutions	to	small	businesses.

Mortgage	Banking	includes	mortgage	origination	and	servicing	activities, as	well	as	portfolios	comprised	of	residential	mortgages	and	home	equity loans,	including	the	PCI	portfolio	acquired	in	the	Washington	Mutual transaction.	Card	issues	credit	cards	to	consumers	and	small	businesses, provides	payment	services	to	corporate	and	public	sector	clients	through its	commercial	card	products,	offers	payment	processing	services	to merchants,	and	provides	auto	and	student	loan	services.

# Selected	income	statement	data

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Lending-\tand\tdeposit-related\tfees | $3,039 | $2,983 | $3,121 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 2,096 | 2,116 | 2,093 |
| Mortgage\tfees\tand\trelated\tincome | 3,560 | 5,195 | 8,680 |
| Card\tincome | 5,779 | 5,785 | 5,446 |
| All\tother\tincome | 1,463 | 1,473 | 1,473 |
| Noninterest\trevenue | 15,937 | 17,552 | 20,813 |
| Net\tinterest\tincome | 28,431 | 28,985 | 29,465 |
| Total\tnet\trevenue | 44,368 | 46,537 | 50,278 |
| Provision\tfor\tcredit\tlosses | 3,520 | 335 | 3,774 |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 10,538 | 11,686 | 11,632 |
| Noncompensation\texpense | 15,071 | 16,156 | 17,195 |
| Total\tnoninterest\texpense | 25,609 | 27,842 | 28,827 |
| Income\tbefore\tincome\ttax\texpense | 15,239 | 18,360 | 17,677 |
| Income\ttax\texpense | 6,054 | 7,299 | 6,886 |
| Net\tincome | $9,185 | $11,061 | $10,791 |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity | 18% | 23% | 25% |
| Overhead\tratio | 58 | 60 | 57 |

Note:	As	discussed	on	pages	79–80,	effective	with	the	fourth	quarter	of	2014	the	Firm	changed its	methodology	for	allocating	the	cost	of	preferred	stock	to	its	reportable	business	segments. Prior	periods	have	been	revised	to	conform	with	the	current	period	presentation.

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	$9.2	billion,	a	decrease	of	$1.9 billion,	or	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	$2.2	billion,	or	5%,	compared	with the	prior	year.	Net	interest	income	was	$28.4	billion,	down	$554	million,	or	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 $1.6	billion,	or	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.	For	more	information,	including	net	charge- off	amounts	and	rates,	see	Consumer	Credit	Portfolio.

Noninterest	expense	was	$25.6	billion,	a	decrease	of	$2.2	billion,	or	8%,	from	the prior	year,	driven	by	lower	Mortgage	Banking	expense.

Consumer	&	Community	Banking	net	income	was	$11.1	billion,	an	increase	of $270	million,	or	3%,	compared	with	the	prior	year,	due	to	lower	provision	for credit	losses	and	lower	noninterest	expense,	predominantly	offset	by	lower	net revenue.

Net	revenue	was	$46.5	billion,	a	decrease	of	$3.7	billion,	or	7%,	compared	with the	prior	year.	Net	interest	income	was	$29.0	billion,	down	$480	million,	or	2%, driven	by	lower	deposit	margins,	lower	loan	balances	due	to	net	portfolio	runoff and	spread	compression	in	Credit	Card,	largely	offset	by	higher	deposit	balances. Noninterest	revenue	was	$17.6	billion,	a	decrease	of	$3.3	billion,	or	16%,	driven by	lower	mortgage	fees	and	related	income,	partially	offset	by	higher	card income.

The	provision	for	credit	losses	was	$335	million,	compared	with	$3.8	billion	in the	prior	year.	The	current-year	provision	reflected	a	$5.5	billion	reduction	in	the allowance	for	loan	losses	and	total	net	charge-offs	of	$5.8	billion.	The	prior-year provision	reflected	a	$5.5	billion	reduction	in	the	allowance	for	loan	losses	and total	net	charge-offs	of	$9.3	billion,	including	$800	million	of	incremental charge-offs	related	to	regulatory	guidance.	For	more	information,	including	net charge-off	amounts	and	rates,	see	Consumer	Credit	Portfolio	on	pages	113–119.

Noninterest	expense	was	$27.8	billion,	a	decrease	of	$985	million,	or	3%,	from the	prior	year,	driven	by	lower	mortgage	servicing	expense,	partially	offset	by investments	in	Chase	Private	Client	expansion,	higher	non-MBS	related	legal expense	in	Mortgage	Production,	higher	auto	lease	depreciation,	and	costs	related to	the	control	agenda.

# Selected	metrics

| (in	millions,	except	headcount) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\n(period-end) |  |  |  |
| Total\tassets | $455,634 | $452,929 | $467,282 |
| Trading\tassets\t-\tloans(a) | 8,423 | 6,832 | 18,801 |
| Loans: |  |  |  |
| Loans\tretained | 396,288 | 393,351 | 402,963 |
| Loans\theld-for-sale | 3,416 | 940 | — |
| Total\tloans | 399,704 | 394,291 | 402,963 |
| Deposits | 502,520 | 464,412 | 438,517 |
| Equity(b) | 51,000 | 46,000 | 43,000 |
| Selected\tbalance\tsheet\tdata\n(average) |  |  |  |
| Total\tassets | $447,750 | $456,468 | $467,641 |
| Trading\tassets\t-\tloans(a) | 8,040 | 15,603 | 17,573 |
| Loans: |  |  |  |
| Loans\tretained | 389,967 | 392,797 | 408,559 |
| Loans\theld-for-sale | 917 | 209 | 433 |
| Total\tloans | $390,884 | $393,006 | $408,992 |
| Deposits | 486,919 | 453,304 | 413,948 |
| Equity(b) | 51,000 | 46,000 | 43,000 |
| Headcount | 137,186 | 151,333 | 164,391 |

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

(b) 2014	includes	$3.0	billion	of	capital	held	at	the	CCB	level	related	to	legacy	mortgage	servicing matters.

As	of	or	for	the	year	ended	December 31,

| otherwise	noted) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Credit\tdata\tand\tquality\tstatistics |  |  |  |
| Net\tcharge-offs(a)(b) | $4,773 | $5,826 | $9,280 |
| Nonaccrual\tloans(c)(d) | 6,401 | 7,455 | 9,114 |
| Nonperforming\tassets(c)(d)(e) | 6,872 | 8,109 | 9,791 |
| Allowance\tfor\tloan\tlosses(a) | 10,404 | 12,201 | 17,752 |
| Net\tcharge-off\trate(a)(b) | 1.22% | 1.48% | 2.27% |
| Net\tcharge-off\trate,\texcluding\tPCI\nloans(b) | 1.40 | 1.73 | 2.68 |
| Allowance\tfor\tloan\tlosses\tto\tperiod-end\nloans\tretained | 2.63 | 3.10 | 4.41 |
| Allowance\tfor\tloan\tlosses\tto\tperiod-end\nloans\tretained,\texcluding\tPCI\tloans(f) | 2.02 | 2.36 | 3.51 |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| nonaccrual\tloans\tretained,\texcluding |  |  |  |
| credit\tcard(c)(f) | 58 | 57 | 72 |
| Nonaccrual\tloans\tto\ttotal\tperiod-end |  |  |  |
| loans,\texcluding |  |  |  |
| credit\tcard(e) | 2.38 | 2.80 | 3.31 |
| Nonaccrual\tloans\tto\ttotal\tperiod-end |  |  |  |
| loans,\texcluding\tcredit\tcard\tand\tPCI |  |  |  |
| loans(c)(e) | 2.88 | 3.49 | 4.23 |
| Business\tmetrics |  |  |  |
| Number\tof: |  |  |  |
| Branches | 5,602 | 5,630 | 5,614 |
| ATMs(g) | 18,056 | 20,290 | 19,062 |
| Active\tonline\tcustomers\t(in\tthousands) | 36,396 | 33,742 | 31,114 |
| Active\tmobile\tcustomers\t(in\tthousands) | 19,084 | 15,629 | 12,359 |

(a) Net	charge-offs	and	the	net	charge-off	rates	excluded	$533	million	and	$53	million	of	write-offs	in	the	PCI portfolio	for	the	years	ended	December	31,	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	128–130.

(b) Net	charge-offs	and	net	charge-off	rates	for	the	year	ended	December	31,	2012,	included	$800	million	of	charge- offs,	recorded	in	accordance	with	regulatory	guidance	on	certain	loans	discharged	under	Chapter	7	bankruptcy and	not	reaffirmed	by	the	borrower	("Chapter	7	loans")	to	be	charged	off	to	the	net	realizable	value	of	the collateral	and	to	be	considered	nonaccrual,	regardless	of	their	delinquency	status.	Excluding	these	charges-offs, net	charge-offs	for	the	year	ended	December	31,	2012,	would	have	been	$8.5	billion	and	excluding	these	charge- offs	and	PCI	loans,	the	net	charge-off	rate	for	the	year	ended	December	31,	2012,	would	have	been	2.45%.

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

(d) At	December	31,	2014,	2013	and	2012,	nonperforming	assets	excluded:	(1)	mortgage	loans	insured	by	U.S. government	agencies	of	$7.8	billion,	$8.4	billion	and	$10.6	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	$367	million,	$428	million	and	$525	million	respectively,	that	are	90	or	more	days	past	due;	(3) real	estate	owned	("REO")	insured	by	U.S.	government	agencies	of	$462	million,	$2.0	billion	and	$1.6	billion, respectively.	These	amounts	have	been	excluded	based	upon	the	government	guarantee.

(e) Prior	periods	were	revised	to	conform	with	the	current presentation.

(f) The	allowance	for	loan	losses	for	PCI	loans	of	$3.3	billion,	$4.2	billion	and	$5.7	billion	at	December	31,	2014, December	31,	2013,	and	December	31,	2012,	respectively;	these	amounts	were	also	excluded	from	the applicable	ratios.

(g) Includes	eATMs,	formerly	Express	Banking	Kiosks	("EBK").	Prior	periods	were	revised	to	conform	with	the current	presentation.

# Consumer	&	Business	Banking

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Lending-\tand\tdeposit-related\tfees | $3,010 | $2,942 | $3,068 |
| Asset\tmanagement,\tadministration\nand\tcommissions | 2,025 | 1,815 | 1,638 |
| Card\tincome | 1,605 | 1,495 | 1,353 |
| All\tother\tincome | 534 | 492 | 498 |
| Noninterest\trevenue | 7,174 | 6,744 | 6,557 |
| Net\tinterest\tincome | 11,052 | 10,668 | 10,629 |
| Total\tnet\trevenue | 18,226 | 17,412 | 17,186 |
| Provision\tfor\tcredit\tlosses | 305 | 347 | 311 |
| Noninterest\texpense | 12,149 | 12,162 | 11,490 |
| Income\tbefore\tincome\ttax\texpense | 5,772 | 4,903 | 5,385 |
| Net\tincome | $3,443 | $2,943 | $3,224 |
| Return\ton\tcommon\tequity | 31% | 26% | 36% |
| Overhead\tratio | 67 | 70 | 67 |
| Equity\t(period-end\tand\taverage) | $11,000 | $11,000 | $9,000 |

Consumer	&	Business	Banking	net	income	was	$3.4	billion,	an	increase	of $500	million,	or	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	$384	million,	or	4%	compared	with	the	prior	year, driven	by	higher	deposit	balances,	largely	offset	by	deposit	spread	compression. Noninterest	revenue	was	$7.2	billion,	up	$430	million,	or	6%,	driven	by	higher investment	revenue,	reflecting	record	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.

Noninterest	expense	was	$12.1	billion,	flat	from	the	prior	year,	reflecting	lower costs	driven	by	efficiencies	implemented	in	the	business,	offset	by	the	increased cost	of	controls.

Consumer	&	Business	Banking	net	income	was	$2.9	billion,	a	decrease	of	$281 million,	or	9%,	compared	with	the	prior	year,	due	to	higher	noninterest	expense, partially	offset	by	higher	noninterest	revenue.

Net	revenue	was	$17.4	billion,	up	1%	compared	with	the	prior	year.	Net	interest income	was	$10.7	billion,	flat	compared	with	the	prior	year,	driven	by	higher deposit	balances,	offset	by	lower	deposit	margin.	Noninterest	revenue	was	$6.7 billion,	an	increase	of	3%,	driven	by	higher	investment	sales	revenue	and	debit card	revenue,	partially	offset	by	lower	deposit-related	fees.

Noninterest	expense	was	$12.2	billion,	up	6%	from	the	prior	year,	reflecting continued	investments	in	the	business,	and	costs	related	to	the	control	agenda.

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Business\tmetrics |  |  |  |
| Business\tbanking\norigination\tvolume | $6,599 | $5,148 | $6,542 |
| Period-end\tloans | 21,200 | 19,416 | 18,883 |
| Period-end\tdeposits: |  |  |  |
| Checking | 213,049 | 187,182 | 170,354 |
| Savings | 255,148 | 238,223 | 216,422 |
| Time\tand\tother | 21,349 | 26,022 | 31,753 |
| Total\tperiod-end\tdeposits | 489,546 | 451,427 | 418,529 |
| Average\tloans | 20,152 | 18,844 | 18,104 |
| Average\tdeposits: |  |  |  |
| Checking | 198,996 | 176,005 | 153,422 |
| Savings | 249,281 | 229,341 | 204,449 |
| Time\tand\tother | 24,057 | 29,227 | 34,224 |
| Total\taverage\tdeposits | 472,334 | 434,573 | 392,095 |
| Deposit\tmargin | 2.21% | 2.32% | 2.57% |
| Average\tassets | $38,298 | $37,174 | $34,431 |

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

# Mortgage	Banking

# Selected	Financial	statement	data

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Mortgage\tfees\tand\trelated\tincome | $3,560 | $5,195 | $8,680 |
| All\tother\tincome | 37 | 283 | 475 |
| Noninterest\trevenue | 3,597 | 5,478 | 9,155 |
| Net\tinterest\tincome | 4,229 | 4,758 | 5,016 |
| Total\tnet\trevenue | 7,826 | 10,236 | 14,171 |
| Provision\tfor\tcredit\tlosses | (217) | (2,681) | (490) |
| Noninterest\texpense | 5,284 | 7,602 | 9,121 |
| Income\tbefore\tincome\ttax\texpense | 2,759 | 5,315 | 5,540 |
| Net\tincome | $1,668 | $3,211 | $3,468 |
| Return\ton\tcommon\tequity | 9% | 16% | 19% |
| Overhead\tratio | 68 | 74 | 64 |
| Equity\t(period-end\tand\taverage) | $18,000 | $19,500 | $17,500 |

Mortgage	Banking	net	income	was	$1.7	billion,	a	decrease	of	$1.5	billion,	or 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	$2.4	billion,	or	24%,	compared	with the	prior	year.	Net	interest	income	was	$4.2	billion,	a	decrease	of	$529	million,	or 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	$1.9	billion,	or	34%,	driven	by	lower	mortgage	fees	and	related income.

The	provision	for	credit	losses	was	a	benefit	of	$217	million,	compared	with	a benefit	of	$2.7	billion	in	the	prior	year.	The	current	year	reflected	a	$700	million reduction	in	the	allowance	for	loan	losses,	reflecting	continued	improvement	in home	prices	and	delinquencies.	The	prior	year	included	a	$3.8	billion	reduction	in the	allowance	for	loan	losses.	Net	charge-offs	were	$483	million,	compared	with $1.1	billion	in	the	prior	year.

Noninterest	expense	was	$5.3	billion,	a	decrease	of	$2.3	billion,	or	30%,	from	the prior	year,	due	to	lower	expense	in	production	and	servicing	reflecting	lower headcount-related	expense,	the	absence	of	non-MBS	related	legal	expense	and lower	expense	on	foreclosure-related	matters.

Mortgage	Banking	net	income	was	$3.2	billion,	a	decrease	of	$257	million,	or 7%,	compared	with	the	prior	year,	driven	by	lower	net	revenue,	predominantly offset	by	a	higher	benefit	from	the	provision	for	credit	losses	and	lower noninterest	expense.

Net	revenue	was	$10.2	billion,	a	decrease	of	$3.9	billion,	or	28%,	compared	with the	prior	year.	Net	interest	income	was	$4.8	billion,	a	decrease	of	$258	million,	or 5%,	driven	by	lower	loan	balances	due	to	net	portfolio	runoff.	Noninterest revenue	was	$5.5	billion,	a	decrease	of	$3.7	billion,	driven	by	lower	mortgage fees	and	related	income.

The	provision	for	credit	losses	was	a	benefit	of	$2.7	billion,	compared	with	a benefit	of	$490	million	in	the	prior	year.	The	current	year	reflected	a	$3.8	billion reduction	in	the	allowance	for	loan	losses	due	to	continued	improvement	in	home prices	and	delinquencies.	The	prior	year	included	a	$3.9	billion	reduction	in	the allowance	for	loan	losses.

Noninterest	expense	was	$7.6	billion,	a	decrease	of	$1.5	billion,	or	17%,	from	the prior	year,	due	to	lower	servicing	expense,	partially	offset	by	higher	non-MBS related	legal	expense	in	Mortgage	Production.

# Functional	results

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Mortgage\tProduction |  |  |  |
| Production\trevenue\tand\tother\nIncome(a) | $1,060 | $2,973 | $5,877 |
| Production-related\tnet\tinterest\nincome(a) | 422 | 635 | 705 |
| Production-related\trevenue, |  |  |  |
| excluding\trepurchase |  |  |  |
| (losses)/benefits | 1,482 | 3,608 | 6,582 |
| Production\texpense(b) | 1,646 | 3,088 | 2,747 |
| Income,\texcluding\trepurchase\n(losses)/benefits | (164) | 520 | 3,835 |
| Repurchase\t(losses)/benefits | 458 | 331 | (272) |
| Income\tbefore\tincome\ttax\texpense | 294 | 851 | 3,563 |
| Mortgage\tServicing |  |  |  |
| Loan\tservicing\trevenue\tand\tother\nincome(a) | 3,294 | 3,744 | 4,110 |
| Servicing-related\tnet\tinterest\tincome(a) | 314 | 253 | 93 |
| Servicing-related\trevenue | 3,608 | 3,997 | 4,203 |
| Changes\tin\tMSR\tasset\tfair\tvalue\tdue |  |  |  |
| to\tcollection/realization\tof\texpected |  |  |  |
| cash\tflows | (905) | (1,094) | (1,222) |
| Net\tservicing-related\trevenue | 2,703 | 2,903 | 2,981 |
| Default\tservicing\texpense | 1,406 | 2,069 | 3,707 |
| Core\tservicing\texpense(b) | 865 | 904 | 1,033 |
| Servicing\tExpense | 2,271 | 2,973 | 4,740 |
| Income/(loss),\texcluding\tMSR\trisk\nmanagement | 432 | (70) | (1,759) |
| MSR\trisk\tmanagement,\tincluding\nrelated\tnet\tinterest\tincome/(expense) | (28) | (268) | 616 |
| Income/(loss)\tbefore\tincome\ttax\nexpense/(benefit) | 404 | (338) | (1,143) |
| Real\tEstate\tPortfolios |  |  |  |
| Noninterest\trevenue | (282) | (209) | 43 |
| Net\tinterest\tincome | 3,493 | 3,871 | 4,221 |
| Total\tnet\trevenue | 3,211 | 3,662 | 4,264 |
| Provision\tfor\tcredit\tlosses | (223) | (2,693) | (509) |
| Noninterest\texpense | 1,373 | 1,553 | 1,653 |
| Income\tbefore\tincome\ttax\texpense | 2,061 | 4,802 | 3,120 |
| Mortgage\tBanking\tincome\tbefore\nincome\ttax\texpense | $2,759 | $5,315 | $5,540 |
| Mortgage\tBanking\tnet\tincome | $1,668 | $3,211 | $3,468 |
| Overhead\tratios |  |  |  |
| Mortgage\tProduction | 85% | 78% | 43% |
| Mortgage\tServicing | 85 | 113 | 132 |
| Real\tEstate\tPortfolios | 43 | 42 | 39 |

(b) Includes	provision	for	credit	losses.

Mortgage	Production	pretax	income	was	$294	million,	a	decrease	of	$557 million,	or	65%,	from	the	prior	year,	reflecting	lower	revenue,	largely	offset	by lower	expense	and	higher	benefit	from	repurchase	losses.	Mortgage	production- related	revenue,	excluding	repurchase	losses,	was	$1.5	billion,	a	decrease	of	$2.1 billion,	from	the	prior	year,	driven	by	lower	volumes	due	to	higher	levels	of mortgage	interest	rates	and	tighter	margins.	Production	expense	was	$1.6	billion, a	decrease	of	$1.4	billion,	or	47%,	from	the	prior	year,	driven	by	lower headcount-related	expense	and	the	absence	of	non-MBS	related	legal	expense.

Mortgage	Servicing	pretax	income	was	$404	million,	compared	with	a	loss	of $338	million	in	the	prior	year,	reflecting	lower	expenses	and	lower	MSR	risk management	loss,	partially	offset	by	lower	net	revenue.	Mortgage	net	servicing- related	revenue	was	$2.7	billion,	a	decrease	of	$200	million,	or	7%,	from	the prior	year,	driven	by	lower	average	third-party	loans	serviced	and	lower	revenue from	an	exited	non-core	product,	partially	offset	by	lower	MSR	asset amortization	expense	as	a	result	of	lower	MSR	asset	value.	MSR	risk management	was	a	loss	of	$28	million,	compared	with	a	loss	of	$268	million	in the	prior	year.	See	Note	17	for	further	information	regarding	changes	in	value	of the	MSR	asset	and	related	hedges.	Servicing	expense	was	$2.3	billion,	a	decrease of	$702	million,	or	24%,	from	the	prior	year,	reflecting	lower	headcount-related expense	and	lower	expense	for	foreclosure	related	matters.

Real	Estate	Portfolios	pretax	income	was	$2.1	billion,	down	$2.7	billion,	or 57%,	from	the	prior	year,	due	to	a	lower	benefit	from	the	provision	for	credit losses	and	lower	net	revenue,	partially	offset	by	lower	noninterest	expense.	Net revenue	was	$3.2	billion,	a	decrease	of	$451	million,	or	12%,	from	the	prior	year, driven	by	lower	net	interest	income	as	a	result	of	spread	compression	and	lower loan	balances	due	to	portfolio	runoff.	The	provision	for	credit	losses	was	a	benefit of	$223	million,	compared	with	a	benefit	of	$2.7	billion	in	the	prior	year.	The current-year	provision	reflected	a	$700	million	reduction	in	the	allowance	for loan	losses,	$400	million	from	the	non	credit-impaired	allowance	and	$300 million	from	the	purchased	credit-impaired	allowance,	due	to	continued improvement	in	home	prices	and	delinquencies.	The	prior-year	provision reflected	a	$3.8	billion	reduction	in	the	allowance	for	loan	losses,	$2.3	billion from	the	non	credit-impaired	allowance	and	$1.5	billion	from	the	purchased credit-impaired	allowance.	Net	charge-offs	were	$477	million,	compared	with $1.1	billion	in	the	prior	year.	See	Consumer	Credit	Portfolio	on	pages	113–119 for	the	net	charge-off	amounts	and	rates.	Noninterest	expense	was	$1.4	billion,	a decrease	of	$180	million,	or	12%,	compared	with	the	prior	year,	driven	by	lower FDIC-related	expense	and	lower	foreclosed	asset	expense	due	to	lower foreclosure	inventory.

Mortgage	Production	pretax	income	was	$851	million,	a	decrease	of	$2.7 billion	from	the	prior	year,	reflecting	lower	margins,	lower	volumes	and	higher legal	expense,	partially	offset	by	a	benefit	in	repurchase	losses.	Production- related	revenue,	excluding	repurchase	losses,	was	$3.6	billion,	a	decrease	of	$3.0 billion,	or	45%,	from	the	prior	year,	largely	reflecting	lower	margins	and	lower volumes	from	rising	rates.	Production	expense	was	$3.1	billion,	an	increase	of $341	million,	or	12%,	from	the	prior	year,	due	to	higher	non-MBS	related	legal expense	and	higher	compensation-related	expense.	Repurchase	losses	for	the current	year	reflected	a	benefit	of	$331	million,	compared	with	repurchase	losses of	$272	million	in	the	prior	year.	The	current	year	reflected	a	reduction	in	the repurchase	liability	largely	as	a	result	of	the	settlement	with	the	GSEs.

Mortgage	Servicing	pretax	loss	was	$338	million,	compared	with	a	pretax	loss	of $1.1	billion	in	the	prior	year,	driven	by	lower	expense,	partially	offset	by	a	MSR risk	management	loss.	Mortgage	net	servicing-related	revenue	was	$2.9	billion,	a decrease	of	$78	million.	MSR	risk	management	was	a	loss	of	$268	million, compared	with	income	of	$616	million	in	the	prior	year,	driven	by	the	net	impact of	various	changes	in	model	inputs	and	assumptions.	See	Note	17	for	further information	regarding	changes	in	value	of	the	MSR	asset	and	related	hedges. Servicing	expense	was	$3.0	billion,	a	decrease	of	$1.8	billion,	or	37%,	from	the prior	year,	reflecting	lower	costs	associated	with	the	Independent	Foreclosure Review	and	lower	servicing	headcount.

Real	Estate	Portfolios	pretax	income	was	$4.8	billion,	up	$1.7	billion	from	the prior	year,	or	54%,	due	to	a	higher	benefit	from	the	provision	for	credit	losses, partially	offset	by	lower	net	revenue.	Net	revenue	was	$3.7	billion,	a	decrease	of $602	million,	or	14%,	from	the	prior	year.	This	decrease	was	due	to	lower	net interest	income,	resulting	from	lower	loan	balances	due	to	net	portfolio	runoff, and	lower	noninterest	revenue	due	to	higher	loan	retention.	The	provision	for credit	losses	was	a	benefit	of	$2.7	billion,	compared	with	a	benefit	of	$509 million	in	the	prior	year.	The	current-year	provision	reflected	a	$3.8	billion reduction	in	the	allowance	for	loan	losses,	$2.3	billion	from	the	non	credit- impaired	allowance	and	$1.5	billion	from	the	purchased	credit-impaired allowance,	reflecting	continued	improvement	in	home	prices	and	delinquencies. The	prior-year	provision	included	a	$3.9	billion	reduction	in	the	allowance	for loan	losses	from	the	non	credit-impaired	allowance.	Net	charge-offs	were	$1.1 billion,	compared	with	$3.3	billion	in	the	prior	year.	Prior-year	total	net	charge- offs	included	$744	million	of	incremental	charge-offs	reported	in	accordance with	regulatory	guidance	on	certain	loans	discharged	under	Chapter	7 bankruptcy.	Noninterest	expense	was	$1.6	billion,	a	decrease	of	$100	million,	or 6%,	compared	with	the	prior	year,	driven	by	lower	foreclosed	asset	expense	due to	lower	foreclosure	inventory,	largely	offset	by	higher	FDIC-related	expense.

# Mortgage	Production	and	Mortgage	Servicing

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\t(Period-\nend) |  |  |  |
| Trading\tassets\t-\tloans(a) | $8,423 | $6,832 | $18,801 |
| Loans: |  |  |  |
| Prime\tmortgage,\tincluding\toption\nARMs(b) | $13,557 | $15,136 | $17,290 |
| Loans\theld-for-sale | 314 | 614 | — |
| Selected\tbalance\tsheet\tdata\n(average) |  |  |  |
| Trading\tassets\t-\tloans(a) | 8,040 | 15,603 | 17,573 |
| Loans: |  |  |  |
| Prime\tmortgage,\tincluding\toption\nARMs(b) | 14,993 | 16,495 | 17,335 |
| Loans\theld-for-sale | 394 | 114 | — |
| Average\tassets | 42,456 | 57,131 | 59,837 |
| Repurchase\tliability\t(period-end) | 249 | 651 | 2,530 |
| Credit\tdata\tand\tquality\tstatistics |  |  |  |
| Net\tcharge-offs: |  |  |  |
| Prime\tmortgage,\tincluding\toption\nARMs | 6 | 12 | 19 |
| Net\tcharge-off\trate: |  |  |  |
| Prime\tmortgage,\tincluding\toption\nARMs | 0.04% | 0.07% | 0.11% |
| 30+\tday\tdelinquency\trate(c) | 2.06 | 2.75 | 3.05 |
| Nonperforming\tassets(d)(e) | $389 | $519 | $599 |

(b) Predominantly	represents	prime	mortgage	loans	repurchased	from	Government	National Mortgage	Association	("Ginnie	Mae")	pools,	which	are	insured	by	U.S.	government agencies.

(c) At	December	31,	2014,	2013	and	2012,	excluded	mortgage	loans	insured	by	U.S. government	agencies	of	$9.7	billion,	$9.6	billion	and	$11.8	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,	2014,	2013	and	2012,	nonperforming	assets	excluded:	(1)	mortgage	loans insured	by	U.S.	government	agencies	of	$7.8	billion,	$8.4	billion	and	$10.6	billion respectively,	that	are	90	or	more	days	past	due;	and	(2)	REO	insured	by	U.S.	government agencies	of	$462	million,	$2.0	billion	and	$1.6	billion,	respectively.	These	amounts	have been	excluded	based	upon	the	government	guarantee.

(a) Includes	rural	housing	loans	sourced	through	correspondents,	and	prior	to	November	2013,

through	both	brokers	and	correspondents,	which	are	underwritten	and	closed	with	pre-

funding	loan	approval	from	the	U.S.	Department	of	Agriculture	Rural	Development,	which acts	as	the	guarantor	in	the	transaction.

(c) 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).

# Real	Estate	Portfolios

# Credit	data	and	quality	statistics

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Net\tcharge-offs/(recoveries),\nexcluding\tPCI\tloans:(a)(b) |  |  |  |
| Home\tequity | $473 | $966 | $2,385 |
| Prime\tmortgage,\tincluding\noption\tARMs | 22 | 41 | 454 |
| Subprime\tmortgage | (27) | 90 | 486 |
| Other | 9 | 10 | 16 |
| Total\tnet\tcharge- |  |  |  |
| offs/(recoveries),\texcluding |  |  |  |
| PCI\tloans | $477 | $1,107 | $3,341 |
| Net\tcharge-off/(recovery)\trate,\nexcluding\tPCI\tloans:(b) |  |  |  |
| Home\tequity | 0.87% | 1.55% | 3.28% |
| Prime\tmortgage,\tincluding\noption\tARMs | 0.04 | 0.09 | 1.07 |
| Subprime\tmortgage | (0.43) | 1.17 | 5.43 |
| Other | 1.76 | 1.70 | 2.37 |
| Total\tnet\tcharge-off/(recovery)\nrate,\texcluding\tPCI\tloans | 0.41 | 0.96 | 2.68 |
| Net\tcharge-off/(recovery)\trate\t–\nreported:(a)(b) |  |  |  |
| Home\tequity | 0.65% | 1.17% | 2.52% |
| Prime\tmortgage,\tincluding\noption\tARMs | 0.03 | 0.05 | 0.58 |
| Subprime\tmortgage | (0.27) | 0.74 | 3.54 |
| Other | 1.76 | 1.70 | 2.37 |
| Total\tnet\tcharge-off/(recovery)\nrate\t–\treported | 0.29 | 0.64 | 1.79 |
| 30+\tday\tdelinquency\trate,\nexcluding\tPCI\tloans(c) | 2.67% | 3.66% | 5.03% |
| Allowance\tfor\tloan\tlosses,\nexcluding\tPCI\tloans | $2,168 | $2,568 | $4,868 |
| Allowance\tfor\tPCI\tloans(a) | 3,325 | 4,158 | 5,711 |
| Allowance\tfor\tloan\tlosses | $5,493 | $6,726 | $10,579 |
| Nonperforming\tassets(d) | 5,786 | 6,919 | 8,439 |
| Allowance\tfor\tloan\tlosses\tto\nperiod-end\tloans\tretained | 3.24% | 4.00% | 5.97% |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| period-end\tloans\tretained, |  |  |  |
| excluding\tPCI\tloans | 1.76 | 2.23 | 4.14 |

(b) Net	charge-offs	and	net	charge-off	rates	for	the	year	ended	December	31,	2012,	included	$744 million	of	charge-offs	related	to	regulatory	guidance.	Excluding	these	charges-offs,	net	charge-offs for	the	year	ended	December	31,	2012,	would	have	been	$1.8	billion,	$410	million	and	$416	million for	the	home	equity,	prime	mortgage,	including	option	ARMs,	and	subprime	mortgage	portfolios,

respectively.	Net	charge-off	rates	for	the	same	period,	excluding	these	charge-offs	and	PCI	loans,

would	have	been	2.41%,	0.97%	and	4.65%	for	the	home	equity,	prime	mortgage,	including	option ARMs,	and	subprime	mortgage	portfolios,	respectively.

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

# 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	has	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.	The	Firm	has	satisfied	or	is	committed	to	satisfying	these	obligations within	the	mandated	timeframes.

The	mortgage	servicing	Consent	Orders	and	settlements	are	subject	to	ongoing oversight	by	the	Mortgage	Compliance	Committee	of	the	Firm's	Board	of Directors.	In	addition,	certain	of	the	Consent	Orders	and	settlements	are	the subject	of	ongoing	reporting	to	various	regulators	and	independent	overseers.

The	Firm's	compliance	with	the	Global	Settlement	and	the	RMBS	Settlement	are detailed	in	periodic	reports	published	by	the	independent	overseers.

# Card,	Merchant	Services	&	Auto

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Card\tincome | $4,173 | $4,289 | $4,092 |
| All\tother\tincome | 993 | 1,041 | 1,009 |
| Noninterest\trevenue | 5,166 | 5,330 | 5,101 |
| Net\tinterest\tincome | 13,150 | 13,559 | 13,820 |
| Total\tnet\trevenue | 18,316 | 18,889 | 18,921 |
| Provision\tfor\tcredit\tlosses | 3,432 | 2,669 | 3,953 |
| Noninterest\texpense(a) | 8,176 | 8,078 | 8,216 |
| Income\tbefore\tincome\ttax\texpense | 6,708 | 8,142 | 6,752 |
| Net\tincome | $4,074 | $4,907 | $4,099 |
| Return\ton\tcommon\tequity | 21% | 31% | 24% |
| Overhead\tratio | 45 | 43 | 43 |
| Equity\t(period-end\tand\taverage) | $19,000 | $15,500 | $16,500 |

(a) Included	operating	lease	depreciation	expense	of	$1.2	billion,	$972	million	and	$817	million for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.

Card	net	income	was	$4.1	billion,	a	decrease	of	$833	million,	or	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	$573	million	or	3%	compared	with	the	prior year.	Net	interest	income	was	$13.2	billion,	a	decrease	of	$409	million,	or	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	$164	million,	or	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	$98	million,	or	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.

Card	net	income	was	$4.9	billion,	an	increase	of	$808	million,	or	20%,	compared with	the	prior	year,	driven	by	lower	provision	for	credit	losses.

Net	revenue	was	$18.9	billion,	flat	compared	with	the	prior	year.	Net	interest income	was	$13.6	billion,	down	$261	million,	or	2%,	from	the	prior	year.	The decrease	was	primarily	driven	by	spread	compression	in	Credit	Card	and	Auto and	lower	average	credit	card	loan	balances,	largely	offset	by	the	impact	of	lower revenue	reversals	associated	with	lower	net	charge-offs	in	Credit	Card. Noninterest	revenue	was	$5.3	billion,	an	increase	of	$229	million,	or	4%, compared	with	the	prior	year	primarily	driven	by	higher	net	interchange	income, auto	lease	income	and	merchant	servicing	revenue,	largely	offset	by	lower revenue	from	an	exited	non-core	product	and	a	gain	on	an	investment	security recognized	in	the	prior	year.

The	provision	for	credit	losses	was	$2.7	billion,	compared	with	$4.0	billion	in	the prior	year.	The	current-year	provision	reflected	lower	net	charge-offs	and	a	$1.7 billion	reduction	in	the	allowance	for	loan	losses	due	to	lower	estimated	losses reflecting	improved	delinquency	trends	and	restructured	loan	performance.	The prior-year	provision	included	a	$1.6	billion	reduction	in	the	allowance	for	loan losses.	The	Credit	Card	net	charge-off	rate	was	3.14%,	down	from	3.95%	in	the prior	year;	and	the	30+	day	delinquency	rate	was	1.67%,	down	from	2.10%	in	the prior	year.	The	Auto	net	charge-off	rate	was	0.31%,	down	from	0.39%	in	the prior	year.

Noninterest	expense	was	$8.1	billion,	a	decrease	of	$138	million,	or	2%,	from	the prior	year.	This	decrease	was	due	to	one-time	expense	items	recognized	in	the prior	year	related	to	the	exit	of	a	non-core	product	and	the	write-off	of	intangible assets	associated	with	a	non-strategic	relationship.	The	reduction	in	expenses	was partially	offset	by	increased	auto	lease	depreciation	and	payments	to	customers required	by	a	regulatory	Consent	Order	during	2013.

| where	otherwise	noted) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\n(period-end) |  |  |  |
| Loans: |  |  |  |
| Credit\tCard | $131,048 | $127,791 | $127,993 |
| Auto | 54,536 | 52,757 | 49,913 |
| Student | 9,351 | 10,541 | 11,558 |
| Total\tloans | $194,935 | $191,089 | $189,464 |
| Selected\tbalance\tsheet\tdata\n(average) |  |  |  |
| Total\tassets | $202,609 | $198,265 | $197,661 |
| Loans: |  |  |  |
| Credit\tCard | 125,113 | 123,613 | 125,464 |
| Auto | 52,961 | 50,748 | 48,413 |
| Student | 9,987 | 11,049 | 12,507 |
| Total\tloans | $188,061 | $185,410 | $186,384 |
| Business\tmetrics |  |  |  |
| Credit\tCard,\texcluding\nCommercial\tCard |  |  |  |
| Sales\tvolume\t(in\tbillions) | $465.6 | $419.5 | $381.1 |
| New\taccounts\topened | 8.8 | 7.3 | 6.7 |
| Open\taccounts | 64.6 | 65.3 | 64.5 |
| Accounts\twith\tsales\tactivity | 34.0 | 32.3 | 30.6 |
| %\tof\taccounts\tacquired\tonline | 56% | 55% | 51% |
| Merchant\tServices\t(Chase\nPaymentech\tSolutions) |  |  |  |
| Merchant\tprocessing\tvolume\t(in\nbillions) | $847.9 | $750.1 | $655.2 |
| Total\ttransactions\n\t(in\tbillions) | 38.1 | 35.6 | 29.5 |
| Auto |  |  |  |
| Origination\tvolume\n\t(in\tbillions) | 27.5 | 26.1 | 23.4 |

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

Card	Services	includes	the	Credit	Card	and	Merchant	Services	businesses.

Merchant	Services	processes	transactions	for	merchants.

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

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.

Sales	volume	–	Dollar	amount	of	cardmember	purchases,	net	of	returns.

Open	accounts	–	Cardmember	accounts	with	charging	privileges.

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

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Credit\tdata\tand\tquality\nstatistics |  |  |  |
| Net\tcharge-offs: |  |  |  |
| Credit\tCard | $3,429 | $3,879 | $4,944 |
| Auto(a) | 181 | 158 | 188 |
| Student | 375 | 333 | 377 |
| Total\tnet\tcharge-offs | $3,985 | $4,370 | $5,509 |
| Net\tcharge-off\trate: |  |  |  |
| Credit\tCard(b) | 2.75% | 3.14% | 3.95% |
| Auto(a) | 0.34 | 0.31 | 0.39 |
| Student | 3.75 | 3.01 | 3.01 |
| Total\tnet\tcharge-off\trate | 2.12 | 2.36 | 2.96 |
| Delinquency\trates |  |  |  |
| 30+\tday\tdelinquency\trate: |  |  |  |
| Credit\tCard(c) | 1.44 | 1.67 | 2.10 |
| Auto | 1.23 | 1.15 | 1.25 |
| Student(d) | 2.35 | 2.56 | 2.13 |
| Total\t30+\tday\tdelinquency\nrate | 1.42 | 1.58 | 1.87 |
| 90+\tday\tdelinquency\trate\t–\nCredit\tCard(c) | 0.70 | 0.80 | 1.02 |
| Nonperforming\tassets(e) | $411 | $280 | $265 |
| Allowance\tfor\tloan\tlosses: |  |  |  |
| Credit\tCard | $3,439 | $3,795 | $5,501 |
| Auto\t&amp;\tStudent | 749 | 953 | 954 |
| Total\tallowance\tfor\tloan\nlosses | $4,188 | $4,748 | $6,455 |
| Allowance\tfor\tloan\tlosses\tto\nperiod-end\tloans: |  |  |  |
| Credit\tCard(c) | 2.69% | 2.98% | 4.30% |
| Auto\t&amp;\tStudent | 1.17 | 1.51 | 1.55 |
| Total\tallowance\tfor\tloan\nlosses\tto\tperiod-end\tloans | 2.18 | 2.49 | 3.41 |

(a) Net	charge-offs	and	net	charge-off	rates	for	the	year	ended	December	31,	2012,	included	$53	million of	charge-offs	of	Chapter	7	loans.	Excluding	these	incremental	charge-offs,	net	charge-offs	for	the year	ended	December	31,	2012	would	have	been	$135	million,	and	the	net	charge-off	rate	would	have been	0.28%.

(b) Average	credit	card	loans	included	loans	held-for-sale	of	$509	million,	$95	million	and	$433	million for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.	These	amounts	are	excluded when	calculating	the	net	charge-off	rate.

(c) Period-end	credit	card	loans	included	loans	held-for-sale	of	$3.0	billion	and	$326	million	at December	31,	2014	and	2013,	respectively.	There	were	no	loans	held-for-sale	at	December	31,	2012. These	amounts	are	excluded	when	calculating	delinquency	rates	and	the	allowance	for	loan	losses	to period-end	loans.

(d) Excluded	student	loans	insured	by	U.S.	government	agencies	under	the	FFELP	of	$654	million,	$737 million	and	$894	million	at	December	31,	2014,	2013	and	2012,	respectively,	that	are	30	or	more days	past	due.	These	amounts	have	been	excluded	based	upon	the	government	guarantee.

(e) Nonperforming	assets	excluded	student	loans	insured	by	U.S.	government	agencies	under	the	FFELP of	$367	million,	$428	million	and	$525	million	at	December	31,	2014,	2013	and	2012,	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

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Noninterest\trevenue | $3,593 | $3,977 | $3,887 |
| Net\tinterest\tincome | 11,462 | 11,638 | 11,745 |
| Total\tnet\trevenue | 15,055 | 15,615 | 15,632 |
| Provision\tfor\tcredit\tlosses | 3,079 | 2,179 | 3,444 |
| Noninterest\texpense | 6,152 | 6,245 | 6,566 |
| Income\tbefore\tincome\ttax\texpense | 5,824 | 7,191 | 5,622 |
| Net\tincome | $3,547 | $4,340 | $3,426 |
| Percentage\tof\taverage\tloans: |  |  |  |
| Noninterest\trevenue | 2.87% | 3.22% | 3.10% |
| Net\tinterest\tincome | 9.16 | 9.41 | 9.36 |
| Total\tnet\trevenue | 12.03 | 12.63 | 12.46 |

# CORPORATE	&	INVESTMENT	BANK

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

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Investment\tbanking\tfees | $6,570 | $6,331 | $5,769 |
| Principal\ttransactions(a) | 8,947 | 9,289 | 9,510 |
| Lending-\tand\tdeposit-related\tfees | 1,742 | 1,884 | 1,948 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 4,687 | 4,713 | 4,693 |
| All\tother\tincome | 1,512 | 1,593 | 1,184 |
| Noninterest\trevenue | 23,458 | 23,810 | 23,104 |
| Net\tinterest\tincome | 11,175 | 10,976 | 11,658 |
| Total\tnet\trevenue(b) | 34,633 | 34,786 | 34,762 |
| Provision\tfor\tcredit\tlosses | (161) | (232) | (479) |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 10,449 | 10,835 | 11,313 |
| Noncompensation\texpense | 12,824 | 10,909 | 10,537 |
| Total\tnoninterest\texpense | 23,273 | 21,744 | 21,850 |
| Income\tbefore\tincome\ttax\texpense | 11,521 | 13,274 | 13,391 |
| Income\ttax\texpense | 4,596 | 4,387 | 4,719 |
| Net\tincome | $6,925 | $8,887 | $8,672 |

(a) Included	FVA	(effective	2013)	and	DVA	on	OTC	derivatives	and	structured	notes,	measured	at	fair	value.	FVA and	DVA	gains/(losses)	were	$468	million	and	$(1.9)	billion	for	the	years	ended	December	31,	2014	and	2013, respectively.	DVA	losses	were	($930)	million	for	the	year	ended	December	31,	2012.

(b) Included	tax-equivalent	adjustments,	predominantly	due	to	income	tax	credits	related	to	affordable	housing	and alternative	energy	investments,	as	well	as	tax-exempt	income	from	municipal	bond	investments,	of	$2.5	billion, $2.3	billion	and	$2.0	billion	for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.

| (in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity(a) | 10% | 15% | 18% |
| Overhead\tratio(b) | 67 | 63 | 63 |
| Compensation\texpense\tas |  |  |  |
| \t\tpercentage\tof\ttotal\tnet |  |  |  |
| \t\trevenue(c) | 30 | 31 | 33 |
| Revenue\tby\tbusiness |  |  |  |
| Advisory | $1,627 | $1,315 | $1,491 |
| Equity\tunderwriting | 1,571 | 1,499 | 1,026 |
| Debt\tunderwriting | 3,372 | 3,517 | 3,252 |
| Total\tinvestment\tbanking\tfees | 6,570 | 6,331 | 5,769 |
| Treasury\tServices | 4,145 | 4,171 | 4,249 |
| Lending | 1,130 | 1,669 | 1,389 |
| Total\tBanking | 11,845 | 12,171 | 11,407 |
| Fixed\tIncome\tMarkets(d) | 13,848 | 15,832 | 15,701 |
| Equity\tMarkets | 4,861 | 4,803 | 4,448 |
| Securities\tServices | 4,351 | 4,100 | 4,000 |
| Credit\tAdjustments\t&amp;\tOther(e) | (272) | (2,120) | (794) |
| Total\tMarkets\t&amp;\tInvestor\tServices | 22,788 | 22,615 | 23,355 |
| Total\tnet\trevenue | $34,633 | $34,786 | $34,762 |

(a) Return	on	equity	excluding	FVA	(effective	2013)	and	DVA,	a	non-GAAP	financial	measure,	was	17%	and	19% for	the	years	ended	December	31,	2013	and	2012,	respectively.

(b) Overhead	ratio	excluding	FVA	(effective	2013)	and	DVA,	a	non-GAAP	financial	measure,	was	59%	and	61% for	the	years	ended	December	31,	2013	and	2012,	respectively.

(c) Compensation	expense	as	a	percentage	of	total	net	revenue	excluding	FVA	(effective	2013)	and	DVA,	a	non- GAAP	financial	measure,	was	30%	and	32%	for	the	years	ended	December	31,	2013	and	2012,	respectively.

(d) Includes	results	of	the	synthetic	credit	portfolio	that	was	transferred	from	the	CIO	effective	July	2, 2012.

(e) Consists	primarily	of	credit	valuation	adjustments	("CVA")	managed	by	the	credit	portfolio	group,	and	FVA (effective	2013)	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.

Prior	to	January	1,	2014,	CIB	provided	several	non-GAAP	financial	measures excluding	the	impact	of	implementing	the	FVA	framework	(effective	2013)	and DVA	on:	net	revenue,	net	income,	compensation	ratio,	overhead	ratio,	and	return on	equity.	Beginning	in	the	first	quarter	2014,	the	Firm	did	not	exclude	FVA	and DVA	from	its	assessment	of	business	performance;	however,	the	Firm	continues to	present	these	non-GAAP	measures	for	the	periods	prior	to	January	1,	2014,	as they	reflected	how	management	assessed	the	underlying	business	performance	of the	CIB	in	those	prior	periods.	In	addition,	the	ratio	for	the	allowance	for	loan losses	to	end-of-period	loans,	also	a	non-GAAP	financial	measure,	is

calculated	excluding	the	impact	of	consolidated	Firm-administered	multi-seller conduits	and	trade	finance,	to	provide	a	more	meaningful	assessment	of	CIB's allowance	coverage	ratio.	These	measures	are	used	by	management	to	assess	the underlying	performance	of	the	business	and	for	comparability	with	peers.

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

Banking	revenue	was	$11.8	billion,	down	3%	from	the	prior	year.	Investment banking	fees	were	$6.6	billion,	up	4%	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	to	the	prior	year.	Treasury	Services revenue	was	$4.1	billion,	down	1%	compared	with	the	prior	year,	primarily driven	by	lower	trade	finance	revenue	as	well	as	the	impact	of	business simplification	initiatives,	largely	offset	by	higher	net	interest	income	from increased	deposits.	Lending	revenue	was	$1.1	billion,	down	from	$1.7	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.

Markets	&	Investor	Services	revenue	was	$22.8	billion,	up	1%	from	the	prior year.	Fixed	Income	Markets	revenue	was	$13.8	billion	down	13%	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	$4.9	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	to	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,	including	the	sale	or	liquidation	of	a	significant	part	of the	physical	commodities

business.	The	compensation	expense	to	net	revenue	ratio	was	30%.

Return	on	equity	was	10%	on	$61.0	billion	of	average	allocated	capital.

Net	income	was	$8.9	billion,	up	2%	compared	with	the	prior	year.

Net	revenue	was	$34.8	billion,	flat	compared	with	the	prior	year.	Net	revenue	in 2013	included	a	$1.5	billion	loss	as	a	result	of	implementing	a	FVA	framework for	OTC	derivatives	and	structured	notes.	The	FVA	framework	incorporates	the impact	of	funding	into	the	Firm's	valuation	estimates	for	OTC	derivatives	and structured	notes	and	reflects	an	industry	migration	towards	incorporating	the market	cost	of	unsecured	funding	in	the	valuation	of	such	instruments.	The	loss recorded	in	2013	was	a	one-time	adjustment	arising	on	implementation	of	the	new FVA	framework.

Net	revenue	in	2013	also	included	a	$452	million	loss	from	DVA	on	structured notes	and	derivative	liabilities,	compared	with	a	loss	of	$930	million	in	the	prior year.	Excluding	the	impact	of	FVA	and	DVA,	net	revenue	was	$36.7	billion	and net	income	was	$10.1	billion,	compared	with	$35.7	billion	and	$9.2	billion, respectively	in	the	prior	year.

Banking	revenue	was	$12.2	billion,	compared	with	$11.4	billion	in	the	prior	year. Investment	banking	fees	were	$6.3	billion,	up	10%	from	the	prior	year,	driven	by higher	equity	underwriting	fees	of	$1.5	billion	(up	46%)	and	record	debt underwriting	fees	of	$3.5	billion	(up	8%),	partially	offset	by	lower	advisory	fees of	$1.3	billion	(down	12%).	Equity	underwriting	results	were	driven	by	higher industry-wide	issuance	and	an	increase	in	share	of	fees	compared	with	the	prior year,	according	to	Dealogic.	Industry-wide	loan	syndication	volumes	and	fees increased	as	the	low-rate	environment	continued	to	fuel	refinancing	activity.	The Firm	also	ranked	#1	in	industry-wide	fee	shares	across	high	grade,	high	yield	and loan	products.	Advisory	fees	were	lower	compared	with	the	prior	year	as industry-wide	completed	M&A	industry-wide	fee	levels	declined	13%.	The	Firm maintained	its	#2	ranking	and	improved	share	for	both	announced	and	completed volumes	during	the	year.

Treasury	Services	revenue	was	$4.2	billion,	down	2%	compared	with	the	prior year,	primarily	reflecting	lower	trade	finance	spreads,	partially	offset	by	higher net	interest	income	on	higher	deposit	balances.	Lending	revenue	was	$1.7	billion, up	from	$1.4	billion,	in	the	prior	year	reflecting	net	interest	income	on	retained loans,	fees	on	lending-related	commitments,	and	gains	on	securities	received from	restructured	loans.

Markets	and	Investor	Services	revenue	was	$22.6	billion	compared	to	$23.4 billion	in	the	prior	year.	Combined	Fixed	Income	and	Equity	Markets	revenue was	$20.6	billion,	up	from	$20.1	billion	the	prior	year.	Fixed	Income	Markets revenue	was	$15.8	billion	slightly	higher	reflecting	consistently	strong	client revenue	and	lower	losses	from	the	synthetic	credit	portfolio,	which	was	partially offset	by	lower	rates-related	revenue	given	an	uncertain	rate	outlook	and	low spread	environment.	Equities	Markets	revenue	was

$4.8	billion	up	8%	compared	with	the	prior	year	driven	by	higher	revenue	in derivatives	and	cash	equities	products	and	Prime	Services	primarily	on	higher balances.	Securities	Services	revenue	was	$4.1	billion	compared	with	$4.0	billion in	the	prior	year	on	higher	custody	and	fund	services	revenue	primarily	driven	by higher	assets	under	custody	of	$20.5	trillion.	Credit	Adjustments	&	Other	was	a loss	of	$2.1	billion	predominantly	driven	by	FVA	(effective	2013)	and	DVA.

The	provision	for	credit	losses	was	a	benefit	of	$232	million,	compared	with	a benefit	of	$479	million	in	the	prior	year.	The	2013	benefit	reflected	lower recoveries	as	compared	with	2012	as	the	prior	year	benefited	from	the restructuring	of	certain	nonperforming	loans.	Net	recoveries	were	$78	million, compared	with	$284	million	in	the	prior	year	reflecting	a	continued	favorable credit	environment	with	stable	credit	quality	trends.	Nonperforming	loans	were down	57%	from	the	prior	year.

Noninterest	expense	was	$21.7	billion	slightly	down	compared	with	the	prior year,	driven	by	lower	compensation	expense,	offset	by	higher	noncompensation expense	related	to	higher	litigation	expense	as	compared	with	the	prior	year.	The compensation	ratio,	excluding	the	impact	of	DVA	and	FVA	(effective	2013),	was 30%	and	32%	for	2013	and	2012,	respectively.

Return	on	equity	was	15%	on	$56.5	billion	of	average	allocated	capital	and	17% excluding	FVA	(effective	2013)	and	DVA.

| (in	millions,	except	headcount) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\t(period-\nend) |  |  |  |
| Assets | $861,819 | $843,577 | $876,107 |
| Loans: |  |  |  |
| Loans\tretained(a) | 96,409 | 95,627 | 109,501 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\nvalue | 5,567 | 11,913 | 5,749 |
| Total\tloans | 101,976 | 107,540 | 115,250 |
| Equity | 61,000 | 56,500 | 47,500 |
| Selected\tbalance\tsheet\tdata\t(average) |  |  |  |
| Assets | $854,712 | $859,071 | $854,670 |
| Trading\tassets-debt\tand\tequity\ninstruments | 317,535 | 321,585 | 312,944 |
| Trading\tassets-derivative\treceivables | 64,833 | 70,353 | 74,874 |
| Loans: |  |  |  |
| Loans\tretained(a) | 95,764 | 104,864 | 110,100 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\nvalue | 7,599 | 5,158 | 3,502 |
| Total\tloans | 103,363 | 110,022 | 113,602 |
| Equity | 61,000 | 56,500 | 47,500 |
| Headcount | 51,129 | 52,250 | 52,022 |

(a) Loans	retained	includes	credit	portfolio	loans,	trade	finance	loans,	other	held-for-investment	loans	and overdrafts.

| where	otherwise	noted) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Credit\tdata\tand\tquality\nstatistics |  |  |  |
| Net\tcharge-offs/(recoveries) | $(12) | $(78) | $(284) |
| Nonperforming\tassets: |  |  |  |
| Nonaccrual\tloans: |  |  |  |
| Nonaccrual\tloans\tretained(a) |  |  |  |
| (b) | 110 | 163 | 535 |
| Nonaccrual\tloans\theld-for-\nsale\tand\tloans\tat\tfair\tvalue | 11 | 180 | 254 |
| Total\tnonaccrual\tloans | 121 | 343 | 789 |
| Derivative\treceivables | 275 | 415 | 239 |
| Assets\tacquired\tin\tloan\nsatisfactions | 67 | 80 | 64 |
| Total\tnonperforming\tassets | 463 | 838 | 1,092 |
| Allowance\tfor\tcredit\tlosses: |  |  |  |
| Allowance\tfor\tloan\tlosses | 1,034 | 1,096 | 1,300 |
| Allowance\tfor\tlending-\nrelated\tcommitments | 439 | 525 | 473 |
| Total\tallowance\tfor\tcredit\nlosses | 1,473 | 1,621 | 1,773 |
| Net\tcharge-off/(recovery)\trate(a) | (0.01)% | (0.07)% | (0.26)% |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| period-end\tloans |  |  |  |
| \t\tretained(a) | 1.07 | 1.15 | 1.19 |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| period-end\tloans\tretained, |  |  |  |
| excluding\ttrade\tfinance\tand |  |  |  |
| conduits | 1.82 | 2.02 | 2.52 |
| Allowance\tfor\tloan\tlosses\tto |  |  |  |
| nonaccrual\tloans |  |  |  |
| \t\tretained(a)(b) | 940 | 672 | 243 |
| Nonaccrual\tloans\tto\ttotal\tperiod-\nend\tloans | 0.12 | 0.32 | 0.68 |

(b) Allowance	for	loan	losses	of	$18	million,	$51	million	and	$153	million	were	held	against	these	nonaccrual	loans at	December	31,	2014,	2013	and	2012,	respectively.

# Business	metrics

| otherwise	noted) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Market\trisk-related\trevenue\t–\ttrading\nloss\tdays(a) | 9 | 0 | 7 |
| Assets\tunder\tcustody\t("AUC")\tby\tasset\nclass\t(period-end)\tin\tbillions: |  |  |  |
| Fixed\tIncome | $12,328 | $11,903 | $11,745 |
| Equity | 6,524 | 6,913 | 5,637 |
| Other(b) | 1,697 | 1,669 | 1,453 |
| Total\tAUC | $20,549 | $20,485 | $18,835 |
| Client\tdeposits\tand\tother\tthird\tparty\nliabilities\t(average)(c) | $417,369 | $383,667 | $355,766 |
| Trade\tfinance\tloans\t(period-end) | 25,713 | 30,752 | 35,783 |

(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	VaR	back-testing	discussion	on	pages	134– 135.

(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,	and	include	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 their	client	cash	management	program.

# League	table	results	–	IB	Fee	Share(a)

# League	table	results	–	volumes(e)

|  | 2014 | 2014 | 2013 | 2013 | 2012 | 2012 |  | 2014 | 2014 | 2013 | 2013 | 2012 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\nDecember\t31, | Fee\tShare | Rankings | Fee\tShare | Rankings | Fee\tShare | Rankings | Year\tended\nDecember\t31, | Market\nShare | Rankings | Market\nShare | Rankings | Market\nShare | Rankings |
| Debt,\tequity\tand\tequity- |  |  |  |  |  |  | Debt,\tequity\tand\tequity- |  |  |  |  |  |  |
| related |  |  |  |  |  |  | related |  |  |  |  |  |  |
| Global | 7.6% | #1 | 8.3% | #1 | 7.8% | #1 | Global | 6.8% | #1 | 7.3% | #1 | 7.2% | #1 |
| U.S. | 10.7 | 1 | 11.5 | 1 | 11.1 | 1 | U.S. | 11.8 | 1 | 12.0 | 1 | 11.5 | 1 |
| Long-term\tdebt(b) |  |  |  |  |  |  | Long-term\tdebt(b) |  |  |  |  |  |  |
| Global | 8.0 | 1 | 8.2 | 1 | 8.3 | 1 | Global | 6.7 | 1 | 7.2 | 1 | 7.1 | 1 |
| U.S. | 11.6 | 1 | 11.6 | 1 | 11.7 | 1 | U.S. | 11.3 | 1 | 11.7 | 1 | 11.6 | 1 |
| Equity\tand\tequity-related |  |  |  |  |  |  | Equity\tand\tequity-related |  |  |  |  |  |  |
| Global(c) | 7.1 | 3 | 8.4 | 2 | 7.1 | 1 | Global(c) | 7.6 | 3 | 8.2 | 2 | 7.8 | 4 |
| U.S. | 9.6 | 2 | 11.3 | 2 | 10.1 | 2 | U.S. | 11.0 | 2 | 12.1 | 2 | 10.4 | 5 |
| M&amp;A(d) |  |  |  |  |  |  | M&amp;A\tannounced(d) |  |  |  |  |  |  |
| Global | 8.2 | 2 | 7.6 | 2 | 6.5 | 2 | Global | 21.6 | 2 | 23.5 | 2 | 20.0 | 2 |
| U.S. | 10.0 | 2 | 8.8 | 2 | 7.7 | 2 | U.S. | 27.8 | 2 | 36.4 | 2 | 24.3 | 2 |
| Loan\tsyndications |  |  |  |  |  |  | Loan\tsyndications |  |  |  |  |  |  |
| Global | 9.5 | 1 | 9.9 | 1 | 8.2 | 2 | Global | 12.4 | 1 | 11.6 | 1 | 11.6 | 1 |
| U.S. | 13.3 | 1 | 13.8 | 1 | 11.2 | 2 | U.S. | 19.4 | 1 | 17.8 | 1 | 18.2 | 1 |
| Global\tInvestment\tBanking\nfees | 8.1% | #1 | 8.5% | #1 | 7.5% | #1 |  |  |  |  |  |  |  |
| (b)\tLong-term\tdebt\trankings\tinclude\tinvestment-grade,\thigh-yield,\tsupranationals,\tsovereigns,\tagencies,\tcovered\tbonds,\tasset-backed\tsecurities\t("ABS")\tand\tmortgage-backed |  |  |  |  |  |  |  |  |  |  |  |  |  |
| \t\tannounced\tM&amp;A\tvolumes\trepresents\tany\tU.S.\tinvolvement\tranking. |  |  |  |  |  |  |  |  |  |  |  |  |  |
| \t\teach\tbook\tmanager/equal\tif\tjoint. |  |  |  |  |  |  |  |  |  |  |  |  |  |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport | JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport | JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  |  |  |  |  |  |  | 95 |

(a)	Source:	Dealogic.	Reflects	the	ranking	and	share	of	Global	Investment	Banking	fees

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

		securities;	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)	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.

# International	metrics

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Total\tnet\trevenue(a) |  |  |  |
| Europe/Middle\tEast/Africa | $11,598 | $10,689 | $10,787 |
| Asia/Pacific | 4,698 | 4,736 | 4,128 |
| Latin\tAmerica/Caribbean | 1,179 | 1,340 | 1,533 |
| Total\tinternational\tnet\trevenue | 17,475 | 16,765 | 16,448 |
| North\tAmerica | 17,158 | 18,021 | 18,314 |
| Total\tnet\trevenue | $34,633 | $34,786 | $34,762 |
| Loans\t(period-end)(a) |  |  |  |
| Europe/Middle\tEast/Africa | $27,155 | $29,392 | $30,266 |
| Asia/Pacific | 19,992 | 22,151 | 27,193 |
| Latin\tAmerica/Caribbean | 8,950 | 8,362 | 10,220 |
| Total\tinternational\tloans | 56,097 | 59,905 | 67,679 |
| North\tAmerica | 40,312 | 35,722 | 41,822 |
| Total\tloans | $96,409 | $95,627 | $109,501 |
| Client\tdeposits\tand\tother\tthird-party\nliabilities\t(average)(a) |  |  |  |
| Europe/Middle\tEast/Africa | $152,712 | $143,807 | $127,326 |
| Asia/Pacific | 66,933 | 54,428 | 51,180 |
| Latin\tAmerica/Caribbean | 22,360 | 15,301 | 11,052 |
| Total\tinternational | $242,005 | $213,536 | $189,558 |
| North\tAmerica | 175,364 | 170,131 | 166,208 |
| Total\tclient\tdeposits\tand\tother\tthird-\nparty\tliabilities | $417,369 | $383,667 | $355,766 |
| AUC\t(period-end)\t(in\tbillions)(a) |  |  |  |
| North\tAmerica | $11,987 | $11,299 | $10,504 |
| All\tother\tregions | 8,562 | 9,186 | 8,331 |
| Total\tAUC | $20,549 | $20,485 | $18,835 |

(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.	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,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Lending-\tand\tdeposit-related\tfees | $978 | $1,033 | $1,072 |
| Asset\tmanagement,\tadministration\tand\ncommissions | 92 | 116 | 130 |
| All\tother\tincome(a) | 1,279 | 1,149 | 1,081 |
| Noninterest\trevenue | 2,349 | 2,298 | 2,283 |
| Net\tinterest\tincome | 4,533 | 4,794 | 4,629 |
| Total\tnet\trevenue(b) | 6,882 | 7,092 | 6,912 |
| Provision\tfor\tcredit\tlosses | (189) | 85 | 41 |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 1,203 | 1,115 | 1,014 |
| Noncompensation\texpense | 1,492 | 1,495 | 1,375 |
| Total\tnoninterest\texpense | 2,695 | 2,610 | 2,389 |
| Income\tbefore\tincome\ttax\texpense | 4,376 | 4,397 | 4,482 |
| Income\ttax\texpense | 1,741 | 1,749 | 1,783 |
| Net\tincome | $2,635 | $2,648 | $2,699 |
| Revenue\tby\tproduct |  |  |  |
| Lending | $3,576 | $3,945 | $3,762 |
| Treasury\tservices | 2,448 | 2,429 | 2,428 |
| Investment\tbanking | 684 | 575 | 545 |
| Other | 174 | 143 | 177 |
| Total\tCommercial\tBanking\tnet\trevenue | $6,882 | $7,092 | $6,912 |
| Investment\tbanking\trevenue,\tgross | $1,986 | $1,676 | $1,597 |
| Revenue\tby\tclient\tsegment |  |  |  |
| Middle\tMarket\tBanking | $2,838 | $3,075 | $3,010 |
| Corporate\tClient\tBanking | 1,935 | 1,851 | 1,843 |
| Commercial\tTerm\tLending | 1,252 | 1,239 | 1,206 |
| Real\tEstate\tBanking | 495 | 561 | 450 |
| Other | 362 | 366 | 403 |
| Total\tCommercial\tBanking\tnet\trevenue | $6,882 | $7,092 | $6,912 |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity | 18% | 19% | 28% |
| Overhead\tratio | 39 | 37 | 35 |

(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	activity	of	$462 million,	$407	million	and	$381	million	for	the	years	ended	December	31,	2014,	2013	and	2012, respectively.

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	$210	million,	or	3%,	compared	with the	prior	year.	Net	interest	income	was	$4.5	billion,	a	decrease	of	$261	million,	or 5%,	reflecting	yield	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	$51	million,	or	2%,	reflecting	higher	investment	banking revenue	largely	offset	by	business	simplification	and	lower	lending	fees.

Noninterest	expense	was	$2.7	billion,	an	increase	of	$85	million,	or	3%,	from	the prior	year,	largely	reflecting	higher	investments	in	controls.

Net	income	was	$2.6	billion,	a	decrease	of	$51	million,	or	2%,	from	the	prior year,	driven	by	an	increase	in	noninterest	expense	and	the	provision	for	credit losses,	partially	offset	by	an	increase	in	net	revenue.

Net	revenue	was	a	record	$7.1	billion,	an	increase	of	$180	million,	or	3%,	from the	prior	year.	Net	interest	income	was	$4.8	billion,	up	by	$165	million,	or	4%, driven	by	higher	loan	balances	and	proceeds	from	a	lending-related	workout, partially	offset	by	lower	purchase	discounts	recognized	on	loan	repayments. Noninterest	revenue	was	$2.3	billion,	flat	compared	with	the	prior	year.

Noninterest	expense	was	$2.6	billion,	an	increase	of	$221	million,	or	9%,	from the	prior	year,	reflecting	higher	product-	and	headcount-related	expense.

# CB	revenue	comprises	the	following:

Lending	includes	a	variety	of	financing	alternatives,	which	are	predominantly secured	by	receivables,	inventory,	equipment,	real	estate	or	other	assets. Products	include	term	loans,	revolving	lines	of	credit,	bridge	financing,	asset- based	structures,	leases,	commercial	card	products	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	that	provide 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	market	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	activities	within	the Community	Development	Banking	and	Chase	Capital	businesses.

| 31,	(in	millions,	except	headcount) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Selected\tbalance\tsheet\tdata\t(period-\nend) |  |  |  |
| Total\tassets | $195,267 | $190,782 | $181,502 |
| Loans: |  |  |  |
| Loans\tretained | 147,661 | 135,750 | 126,996 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\nvalue | 845 | 1,388 | 1,212 |
| Total\tloans | $148,506 | $137,138 | $128,208 |
| Equity | 14,000 | 13,500 | 9,500 |
| Period-end\tloans\tby\tclient\tsegment |  |  |  |
| Middle\tMarket\tBanking | $53,635 | $52,289 | $50,552 |
| Corporate\tClient\tBanking | 22,695 | 20,925 | 21,707 |
| Commercial\tTerm\tLending | 54,038 | 48,925 | 43,512 |
| Real\tEstate\tBanking | 13,298 | 11,024 | 8,552 |
| Other | 4,840 | 3,975 | 3,885 |
| Total\tCommercial\tBanking\tloans | $148,506 | $137,138 | $128,208 |
| Selected\tbalance\tsheet\tdata\n(average) |  |  |  |
| Total\tassets | $191,857 | $185,776 | $165,111 |
| Loans: |  |  |  |
| Loans\tretained | 140,982 | 131,100 | 119,218 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\nvalue | 782 | 930 | 882 |
| Total\tloans | $141,764 | $132,030 | $120,100 |
| Client\tdeposits\tand\tother\tthird-party\nliabilities | 204,017 | 198,356 | 195,912 |
| Equity | 14,000 | 13,500 | 9,500 |
| Average\tloans\tby\tclient\tsegment |  |  |  |
| Middle\tMarket\tBanking | $52,444 | $51,830 | $47,009 |
| Corporate\tClient\tBanking | 21,608 | 20,918 | 19,572 |
| Commercial\tTerm\tLending | 51,120 | 45,989 | 40,872 |
| Real\tEstate\tBanking | 12,080 | 9,582 | 8,562 |
| Other | 4,512 | 3,711 | 4,085 |
| Total\tCommercial\tBanking\tloans | $141,764 | $132,030 | $120,100 |
| Headcount | 7,262 | 6,848 | 6,117 |

# Selected	metrics	(continued)

| 31,	(in	millions,	except	ratios) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Credit\tdata\tand\tquality\tstatistics |  |  |  |
| Net\tcharge-offs/(recoveries) | $(7) | $43 | $35 |
| Nonperforming\tassets |  |  |  |
| Nonaccrual\tloans: |  |  |  |
| Nonaccrual\tloans\tretained(a) | 317 | 471 | 644 |
| Nonaccrual\tloans\theld-for-sale\tand\nloans\tat\tfair\tvalue | 14 | 43 | 29 |
| Total\tnonaccrual\tloans | 331 | 514 | 673 |
| Assets\tacquired\tin\tloan\tsatisfactions | 10 | 15 | 14 |
| Total\tnonperforming\tassets | 341 | 529 | 687 |
| Allowance\tfor\tcredit\tlosses: |  |  |  |
| Allowance\tfor\tloan\tlosses | 2,466 | 2,669 | 2,610 |
| Allowance\tfor\tlending-related\ncommitments | 165 | 142 | 183 |
| Total\tallowance\tfor\tcredit\tlosses | 2,631 | 2,811 | 2,793 |
| Net\tcharge-off/(recovery)\trate(b) | — | 0.03% | 0.03% |
| Allowance\tfor\tloan\tlosses\tto\tperiod-\nend\tloans\tretained | 1.67 | 1.97 | 2.06 |
| Allowance\tfor\tloan\tlosses\tto\nnonaccrual\tloans\tretained(a) | 778 | 567 | 405 |
| Nonaccrual\tloans\tto\ttotal\tperiod-end\nloans | 0.22 | 0.37 | 0.52 |

(a) An	allowance	for	loan	losses	of	$45	million,	$81	million	and	$107	million	was	held	against nonaccrual	loans	retained	at	December	31,	2014,	2013	and	2012,	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	every	major	market throughout	the	world.	AM	offers	investment	management	across	all	major asset	classes	including	equities,	fixed	income,	alternatives	and	money market	funds.	AM	also	offers	multi-asset	investment	management, providing	solutions	for	a	broad	range	of	clients'	investment	needs.	For Global	Wealth	Management	clients,	AM	also	provides	retirement	products and	services,	brokerage	and	banking	services	including	trusts	and	estates, loans,	mortgages	and	deposits.	The	majority	of	AM's	client	assets	are	in actively	managed	portfolios.

| and	headcount) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Asset\tmanagement,\tadministration\tand\ncommissions | $9,024 | $8,232 | $7,041 |
| All\tother\tincome | 564 | 797 | 806 |
| Noninterest\trevenue | 9,588 | 9,029 | 7,847 |
| Net\tinterest\tincome | 2,440 | 2,376 | 2,163 |
| Total\tnet\trevenue | 12,028 | 11,405 | 10,010 |
| Provision\tfor\tcredit\tlosses | 4 | 65 | 86 |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 5,082 | 4,875 | 4,405 |
| Noncompensation\texpense | 3,456 | 3,141 | 2,699 |
| Total\tnoninterest\texpense | 8,538 | 8,016 | 7,104 |
| Income\tbefore\tincome\ttax\texpense | 3,486 | 3,324 | 2,820 |
| Income\ttax\texpense | 1,333 | 1,241 | 1,078 |
| Net\tincome | $2,153 | $2,083 | $1,742 |
| Revenue\tby\tline\tof\tbusiness |  |  |  |
| Global\tInvestment\tManagement | $6,327 | $5,951 | $5,141 |
| Global\tWealth\tManagement | 5,701 | 5,454 | 4,869 |
| Total\tnet\trevenue | $12,028 | $11,405 | $10,010 |
| Financial\tratios |  |  |  |
| Return\ton\tcommon\tequity | 23% | 23% | 24% |
| Overhead\tratio | 71 | 70 | 71 |
| Pretax\tmargin\tratio: |  |  |  |
| Global\tInvestment\tManagement | 31 | 32 | 30 |
| Global\tWealth\tManagement | 27 | 26 | 26 |
| Asset\tManagement | 29 | 29 | 28 |
| Headcount | 19,735 | 20,048 | 18,645 |
| Number\tof\tclient\tadvisors | 2,836 | 2,962 | 2,821 |

Net	income	was	$2.2	billion,	an	increase	of	$70	million,	or	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	$623	million,	or	5%,	from	the	prior year.	Noninterest	revenue	was	$9.6	billion,	up	$559	million,	or	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	$64	million,	or	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	$522	million,	or	7%,	from the	prior	year,	as	the	business	continues	to	invest	in	both	infrastructure	and controls.

Net	income	was	$2.1	billion,	an	increase	of	$341	million,	or	20%,	from	the	prior year,	reflecting	higher	net	revenue,	largely	offset	by	higher	noninterest	expense.

Net	revenue	was	$11.4	billion,	an	increase	of	$1.4	billion,	or	14%,	from	the	prior year.	Noninterest	revenue	was	$9.0	billion,	up	$1.2	billion,	or	15%,	from	the	prior year,	due	to	net	client	inflows,	the	effect	of	higher	market	levels	and	higher performance	fees.	Net	interest	income	was	$2.4	billion,	up	$213	million,	or	10%, from	the	prior	year,	due	to	higher	loan	and	deposit	balances,	partially	offset	by narrower	loan	and	deposit	spreads.

Revenue	from	Global	Investment	Management	was	$6.0	billion,	up	16%	due	to net	client	inflows,	the	effect	of	higher	market	levels	and	higher	performance	fees. Revenue	from	Global	Wealth	Management	was	$5.5	billion,	up	12%	from	the prior	year	due	to	higher	net	interest	income	from	loan	and	deposit	balances	and higher	brokerage	revenue.

Noninterest	expense	was	$8.0	billion,	an	increase	of	$912	million,	or	13%,	from the	prior	year,	primarily	due	to	higher	headcount-related	expense	driven	by continued	front	office	expansion	efforts,	higher	performance-based	compensation and	costs	related	to	the	control	agenda.

# AM's	lines	of	business	comprise	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	comprise	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	figures	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	as	mentioned	in	footnote	(a).	The	data	providers	re- denominate	the	asset	values	into	USD.	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).    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	USD.	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 Luxembourg,	U.K.	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).	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	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	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	$22.1	billion,	$18.9	billion	and	$10.9	billion	of	prime	mortgage	loans	reported	in	the	Consumer, excluding	credit	card,	loan	portfolio	at	December	31,	2014,	2013	and	2012,	respectively.	For	the	same	periods, excluded	$2.7	billion,	$3.7	billion	and	$6.7	billion,	respectively,	of	prime	mortgage	loans	reported	in	the	CIO portfolio	within	the	Corporate	segment.

# Client	assets

Client	assets	were	$2.4	trillion,	an	increase	of	$44	billion,	or	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	$146	billion,	or	9%,	from	the	prior	year,	due	to	net	inflows to	long-term	products	and	the	effect	of	higher	market	levels.

Client	assets	were	$2.3	trillion	at	December	31,	2013,	an	increase	of	$248 billion,	or	12%,	compared	with	the	prior	year.	Assets	under	management	were $1.6	trillion,	an	increase	of	$172	billion,	or	12%,	from	the	prior	year,	due	to	net inflows	to	long-term	products	and	the	effect	of	higher	market	levels.	Custody, brokerage,	administration	and	deposit	balances	were	$745	billion,	up	$76	billion, or	11%,	from	the	prior	year,	due	to	the	effect	of	higher	market	levels	and	custody inflows,	partially	offset	by	brokerage	outflows.

| (in	billions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Assets\tby\tasset\tclass |  |  |  |
| Liquidity | $461 | $451 | $458 |
| Fixed\tincome | 359 | 330 | 330 |
| Equity | 375 | 370 | 277 |
| Multi-asset\tand\talternatives | 549 | 447 | 361 |
| Total\tassets\tunder\tmanagement | 1,744 | 1,598 | 1,426 |
| Custody/brokerage/administration/deposits | 643 | 745 | 669 |
| Total\tclient\tassets | $2,387 | $2,343 | $2,095 |
| Memo: |  |  |  |
| Alternatives\tclient\tassets(a) | 166 | 158 | 142 |
| Assets\tby\tclient\tsegment |  |  |  |
| Private\tBanking | $428 | $361 | $318 |
| Institutional | 827 | 777 | 741 |
| Retail | 489 | 460 | 367 |
| Total\tassets\tunder\tmanagement | $1,744 | $1,598 | $1,426 |
| Private\tBanking | $1,057 | $977 | $877 |
| Institutional | 835 | 777 | 741 |
| Retail | 495 | 589 | 477 |
| Total\tclient\tassets | $2,387 | $2,343 | $2,095 |

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

# Client	assets	(continued)

| (in	billions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Assets\tunder\tmanagement\trollforward |  |  |  |
| Beginning\tbalance | $1,598 | $1,426 | $1,336 |
| Net\tasset\tflows: |  |  |  |
| Liquidity | 18 | (4) | (41) |
| Fixed\tincome | 33 | 8 | 27 |
| Equity | 5 | 34 | 8 |
| Multi-asset\tand\talternatives | 42 | 48 | 23 |
| Market/performance/other\timpacts | 48 | 86 | 73 |
| Ending\tbalance,\tDecember\t31 | $1,744 | $1,598 | $1,426 |
| Client\tassets\trollforward |  |  |  |
| Beginning\tbalance | $2,343 | $2,095 | $1,921 |
| Net\tasset\tflows | 118 | 80 | 60 |
| Market/performance/other\timpacts | (74) | 168 | 114 |
| Ending\tbalance,\tDecember\t31 | $2,387 | $2,343 | $2,095 |

| except	where	otherwise	noted) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Total\tnet\trevenue\t(in\tmillions)(a) |  |  |  |
| Europe/Middle\tEast/Africa | $2,080 | $1,881 | $1,641 |
| Asia/Pacific | 1,199 | 1,133 | 958 |
| Latin\tAmerica/Caribbean | 841 | 879 | 773 |
| North\tAmerica | 7,908 | 7,512 | 6,638 |
| Total\tnet\trevenue | $12,028 | $11,405 | $10,010 |
| Assets\tunder\tmanagement |  |  |  |
| Europe/Middle\tEast/Africa | $329 | $305 | $258 |
| Asia/Pacific | 126 | 132 | 114 |
| Latin\tAmerica/Caribbean | 46 | 47 | 45 |
| North\tAmerica | 1,243 | 1,114 | 1,009 |
| Total\tassets\tunder\tmanagement | $1,744 | $1,598 | $1,426 |
| Client\tassets |  |  |  |
| Europe/Middle\tEast/Africa | $391 | $367 | $317 |
| Asia/Pacific | 174 | 180 | 160 |
| Latin\tAmerica/Caribbean | 115 | 117 | 110 |
| North\tAmerica | 1,707 | 1,679 | 1,508 |
| Total\tclient\tassets | $2,387 | $2,343 | $2,095 |

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

# CORPORATE

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

| (in	millions,	except	headcount) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Principal\ttransactions | $1,197 | $563 | $(4,268) |
| Securities\tgains | 71 | 666 | 2,024 |
| All\tother\tincome | 704 | 1,864 | 2,434 |
| Noninterest\trevenue | 1,972 | 3,093 | 190 |
| Net\tinterest\tincome | (1,960) | (3,115) | (2,262) |
| Total\tnet\trevenue(a) | 12 | (22) | (2,072) |
| Provision\tfor\tcredit\tlosses | (35) | (28) | (37) |
| Noninterest\texpense |  |  |  |
| Compensation\texpense | 2,888 | 2,299 | 2,221 |
| Noncompensation\texpense(b) | 4,589 | 13,208 | 6,972 |
| Subtotal | 7,477 | 15,507 | 9,193 |
| Net\texpense\tallocated\tto\tother\nbusinesses | (6,318) | (5,252) | (4,634) |
| Total\tnoninterest\texpense | 1,159 | 10,255 | 4,559 |
| Income/(loss)\tbefore\tincome\ttax\nexpense/(benefit) | (1,112) | (10,249) | (6,594) |
| Income\ttax\texpense/(benefit) | (1,976) | (3,493) | (3,974) |
| Net\tincome/(loss) | $864 | $(6,756) | $(2,620) |
| Total\tnet\trevenue |  |  |  |
| Private\tequity | $1,118 | $589 | $645 |
| Treasury\tand\tCIO | (1,317) | (2,068) | (4,089) |
| Other\tCorporate | 211 | 1,457 | 1,372 |
| Total\tnet\trevenue | $12 | $(22) | $(2,072) |
| Net\tincome/(loss) |  |  |  |
| Private\tequity | $400 | $285 | $319 |
| Treasury\tand\tCIO | (1,165) | (1,454) | (2,718) |
| Other\tCorporate | 1,629 | (5,587) | (221) |
| Total\tnet\tincome/(loss) | $864 | $(6,756) | $(2,620) |
| Total\tassets\t(period-end) | $931,705 | $805,987 | $725,251 |
| Headcount | 26,047 | 20,717 | 17,758 |

(a) Included	tax-equivalent	adjustments,	predominantly	due	to	tax-exempt	income	from municipal	bond	investments	of	$730	million,	$480	million	and	$443	million	for	the	years ended	December	31,	2014,	2013	and	2012,	respectively.

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

Private	Equity	reported	net	income	of	$400	million,	compared	with	net	income	of $285	million	in	the	prior	year,	primarily	due	to	higher	net	gains	on	sales,	largely offset	by	higher	noninterest	expense	related	to	goodwill	impairment.

Treasury	and	CIO	reported	a	net	loss	of	$1.2	billion,	compared	with	a	net	loss	of $1.5	billion	in	the	prior	year.	Net	revenue	was	a	loss	of	$1.3	billion,	compared with	a	loss	of	$2.1	billion	in	the	prior	year.	Current	year	net	interest	income	was	a loss	of	$1.7	billion	compared	with	a	loss	of	$2.7	billion	in	the	prior	year, primarily	reflecting	higher	yields	on	investment	securities.	Securities	gains	were $71	million,	compared	to	$659	million	in	the	prior	year,	reflecting	lower repositioning	activity	of	the	investment	securities	portfolio	in	the	current	period.

Other	Corporate	reported	net	income	of	$1.6	billion,	compared	with	a	net	loss	of $5.6	billion	in	the	prior	year.	Current	year	noninterest	revenue	was	$353	million compared	with	$1.8	billion	in	the	prior	year.	Prior	year	noninterest	revenue included	gains	of	$1.3	billion	and	$493	million	on	the	sales	of	Visa	shares	and One	Chase	Manhattan	Plaza,	respectively.	The	current	year	included	$821 million	of	legal	expense,	compared	with	$10.2	billion,	which	included	reserves for	litigation	and	regulatory	proceedings,	in	the	prior	year.

Net	loss	was	$6.8	billion,	compared	with	a	net	loss	of	$2.6	billion	in	the	prior year.

Private	Equity	reported	net	income	of	$285	million,	compared	with	net	income	of $319	million	in	the	prior	year.	Net	revenue	was	of	$589	million,	compared	with $645	million	in	the	prior	year.

Treasury	and	CIO	reported	a	net	loss	of	$1.5	billion,	compared	with	a	net	loss	of $2.7	billion	in	the	prior	year.	Net	revenue	was	a	loss	of	$2.1	billion,	compared with	a	loss	of	$4.1	billion	in	the	prior	year.	Net	revenue	in	2013	included	$659 million	of	net	securities	gains	from	sales	of	available-for-sale	investment securities,	compared	with	securities	gains	of	$2.0	billion;	and	$888	million	of pretax	extinguishment	gains	related	to	the	redemption	of	trust	preferred	securities in	the	prior	year.	The	extinguishment	gains	were	related	to	adjustments	applied	to the	cost	basis	of	the	trust	preferred	securities	during	the	period	they	were	in	a qualified	hedge	accounting	relationship.	The	prior	year	loss	also	reflected	$5.8 billion	of	losses	incurred	by	CIO	from	the	synthetic	credit	portfolio	for	the	six months	ended	June	30,	2012,	and	$449	million	of	losses	from	the	retained	index credit	derivative	positions	for	the	three

months	ended	September	30,	2012.	Net	interest	income	in	2013	was	a	loss	of	$2.7 billion	compared	with	a	loss	of	$1.7	billion	in	the	prior	year,	primarily	due	to	low interest	rates	and	limited	reinvestment	opportunities.	Net	interest	income improved	in	the	fourth	quarter	of	2013	due	to	higher	interest	rates	and	better reinvestment	opportunities.

Other	Corporate	reported	a	net	loss	of	$5.6	billion,	compared	with	a	net	loss	of $221	million	in	the	prior	year.	Noninterest	revenue	in	2013	was	$1.8	billion, down	2%	compared	with	the	prior	year.	In	2013,	noninterest	revenue	included gains	of	$1.3	billion	and	$493	million	on	the	sales	of	Visa	shares	and	One	Chase Manhattan	Plaza,	respectively.	Noninterest	revenue	in	the	prior	year	included	a $1.1	billion	benefit	for	the	Washington	Mutual	bankruptcy	settlement	and	a	$665 million	gain	from	the	recovery	on	a	Bear	Stearns-related	subordinated	loan. Noninterest	expense	of	$9.7	billion	was	up	$5.9	billion	compared	with	the	prior year.	Included	in	2013	noninterest	expense	was	$10.2	billion	of	legal	expense, including	reserves	for	litigation	and	regulatory	proceedings,	compared	with	$3.7 billion	of	expense	for	additional	litigation	reserves,	largely	for	mortgage-related matters,	in	the	prior	year.

# 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, 2014,	the	investment	securities	portfolio	was	$343.1	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	156–160.	For	information	on	interest	rate,	foreign exchange	and	other	risks,	Treasury	and	CIO	Value-at-risk	("VaR")	and	the Firm's	structural	interest	rate-sensitive	revenue	at	risk,	see	Market	Risk Management	on	pages	131–136.

# Selected	income	statement	and	balance	sheet	data

| 31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Securities\tgains | $71 | $659 | $2,028 |
| Investment\tsecurities\tportfolio\n(average) | 349,285 | 353,712 | 358,029 |
| Investment\tsecurities\tportfolio\t(period–\nend)(a) | 343,146 | 347,562 | 365,421 |
| Mortgage\tloans\t(average) | 3,308 | 5,145 | 10,241 |
| Mortgage\tloans\t(period-end) | 2,834 | 3,779 | 7,037 |

(a) Period-end	investment	securities	included	held-to-maturity	securities	of	$49.3	billion	and	$24.0	billion	at December	31,	2014,	and	2013,	respectively.	Held-to-maturity	securities	as	of	December	31,	2012,	were	not material.

# Private	Equity	portfolio

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Private\tequity\tgains/(losses) |  |  |  |
| Realized\tgains | $1,164 | $(170) | $17 |
| Unrealized\tgains/(losses)(a) | 43 | 734 | 639 |
| Total\tdirect\tinvestments | 1,207 | 564 | 656 |
| Third-party\tfund\tinvestments | 34 | 137 | 134 |
| Total\tprivate\tequity\tgains/(losses)(b) | $1,241 | $701 | $790 |

(a) Includes	reversals	of	unrealized	gains	and	losses	that	were	recognized	in	prior	periods	and	have	now	been realized.

(b) Included	in	principal	transactions	revenue	in	the	Consolidated	statements	of income.

# Private	equity	portfolio	information(a)

| December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Publicly\theld\tsecurities |  |  |  |
| Carrying\tvalue | $878 | $1,035 | $578 |
| Cost | 583 | 672 | 350 |
| Quoted\tpublic\tvalue | 893 | 1,077 | 578 |
| Privately\theld\tdirect\tsecurities |  |  |  |
| Carrying\tvalue | 4,555 | 5,065 | 5,379 |
| Cost | 5,275 | 6,022 | 6,584 |
| Third-party\tfund\tinvestments(b) |  |  |  |
| Carrying\tvalue | 433 | 1,768 | 2,117 |
| Cost | 423 | 1,797 | 1,963 |
| Total\tprivate\tequity\tportfolio |  |  |  |
| Carrying\tvalue | $5,866 | $7,868 | $8,074 |
| Cost | 6,281 | 8,491 | 8,897 |

(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	in	January	2015,	see	Note	2.

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.

The	carrying	value	of	the	private	equity	portfolio	at	December	31,	2013	was	$7.9 billion,	down	from	$8.1	billion	at	December	31,	2012.	The	decrease	in	the portfolio	was	predominantly	driven	by	sales	of	investments,	partially	offset	by new	investments	and	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	conducts	any	number	of	other	services or	activities,	the	Firm	takes	on	some	degree	of	risk.	The	Firm's	overall	objective in	managing	risk	is	to	protect	the	safety	and	soundness	of	the	Firm,	avoid excessive	risk	taking,	and	manage	and	balance	risk	in	a	manner	that	serves	the interest	of	our	clients,	customers	and	shareholders.

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,	fiduciary	and	reputation	risk.

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	line	of	business	and	corporate functions;	and

•Firmwide	structures	for	risk governance.

Firmwide	Risk	Management	is	overseen	and	managed	on	an	enterprise-wide basis.	The	Firm's	Chief	Executive	Officer	("CEO"),	Chief	Financial	Officer ("CFO"),	Chief	Risk	Officer	("CRO")	and	Chief	Operating	Officer	("COO") develop	and	set	the	risk	management	framework	and	governance	structure	for	the Firm,	which	is	intended	to	provide	comprehensive	controls	and	ongoing management	of	the	major	risks	inherent	in	the	Firm's	business	activities.	The Firm's	risk	management	framework	is	intended	to	create	a	culture	of transparency,	awareness	and	personal	responsibility	through	reporting, collaboration,	discussion,	escalation	and	sharing	of	information.	The	CEO,	CFO, CRO	and	COO	are	ultimately	responsible	and	accountable	to	the	Firm's	Board	of Directors.

The	Firm's	risk	culture	strives	for	continual	improvement	through	ongoing employee	training	and	development,	as	well	as	talent	retention.	The	Firm	also approaches	its	incentive	compensation	arrangements	through	an	integrated	risk, compensation	and	financial	management	framework	to	encourage	a	culture	of risk	awareness	and	personal	accountability.

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

| Risk | Definition | Key	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 | 146-155 |
|  | associated\trisks\tduring\tnormal\teconomic\tenvironments\tand\tstressed\tconditions. |  |  |
| Compliance\trisk | The\trisk\tof\tfines\tor\tsanctions\tor\tof\tfinancial\tdamage\tor\tloss\tdue\tto\tthe\tfailure\tto\tcomply\twith\tlaws,\trules,\tand | Not\tApplicable | 144 |
|  | regulations. |  |  |
| 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 | 137-138 |
| Credit\trisk |  | Total\texposure;\tindustry,\tgeographic\tand\tcustomer\tconcentrations; | 110-130 |
|  |  | risk\tratings;\tdelinquencies;\tloss\texperience;\tstress |  |
| Fiduciary\trisk | The\trisk\tof\ta\tfailure\tto\texercise\tthe\tapplicable\thigh\tstandard\tof\tcare,\tto\tact\tin\tthe\tbest\tinterests\tof\tclients\tor\tto\ttreat | Not\tApplicable | 145 |
|  | clients\tfairly,\tas\trequired\tunder\tapplicable\tlaw\tor\tregulation. |  |  |
| Legal\trisk | The\trisk\tof\tloss\tor\timposition\tof\tdamages,\tfines,\tpenalties\tor\tother\tliability\tarising\tfrom\tfailure\tto\tcomply\twith\ta | Not\tApplicable | 144 |
| Liquidity\trisk | The\trisk\tthat\tthe\tFirm\twill\tnot\thave\tthe\tappropriate\tamount,\tcomposition\tand\ttenor\tof\tfunding\tand\tliquidity\tin | LCR;\tStress | 156-160 |
|  | support\tof\tits\tassets,\tand\tthat\tthe\tFirm\twill\tbe\tunable\tto\tmeet\tits\tcontractual\tand\tcontingent\tobligations\tthrough |  |  |
|  | normal\teconomic\tcycles\tand\tmarket\tstress\tevents. |  |  |
| 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 | 131-136 |
|  | 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 | 139 |
|  | and\treports. |  |  |
| Non-USD\tFX | The\trisk\tarising\tfrom\tcapital\tinvestments,\tforecasted\texpense\tand\trevenue,\tinvestment\tsecurities\tportfolio\tor | FX\tNet\tOpen\tPosition\t("NOP") | 203,\t211-213 |
| risk | issuing\tdebt\tin\tdenominations\tother\tthan\tthe\tU.S.\tdollar. |  |  |
| Operational\trisk | The\trisk\tof\tloss\tresulting\tfrom\tinadequate\tor\tfailed\tprocesses\tor\tsystems\tor\tdue\tto\texternal\tevents\tthat\tare\tneither | Firm-specific\tloss\texperience;\tindustry\tloss\texperience;\tbusiness | 140-143 |
|  | market\tnor\tcredit-related. | environment\tand\tinternal\tcontrol\tfactors\t("BEICF") |  |
| Principal\trisk | The\trisk\tof\tan\tadverse\tchange\tin\tthe\tvalue\tof\tprivately-held\tfinancial\tassets\tand\tinstruments,\ttypically | Carrying\tValue,\tStress | 140 |
|  | for\twhich\tthere\tis\tless\tobservable\tmarket\tor\tvaluation\tdata. |  |  |
| Reputation\trisk | The\trisk\tthat\tan\taction,\ttransaction,\tinvestment\tor\tevent\twill\treduce\tthe\ttrust\tthat\tclients,\tshareholders,\temployees | Not\tApplicable | 145 |
| Structural | The\trisk\tresulting\tfrom\tthe\tFirm's\ttraditional\tbanking\tactivities\t(both\ton-\tand\toff-balance\tsheet\tpositions)\tarising | Earnings-at-risk | 136 |

# Risk	organization

The	LOBs	are	responsible	for	managing	the	risks	inherent	in	their	respective business	activities.	The	Risk	organization	operates	independently	from	the revenue-generating	businesses,	providing	a	credible	challenge	to	them.	The	CRO is	the	head	of	the	Risk	organization	and	is	responsible	for	the	overall	direction	of Risk	oversight.	The	CRO	is	supported	by	individuals	and	organizations	that	align to	lines	of	business	and	corporate	functions,	as	well	as	others	that	align	to	specific risk	types.

The	Firm's	Risk	Management	Organization	and	other	Firmwide	functions	with risk-related	responsibilities	(i.e.,	Regulatory	Capital	Management	Office ("RCMO"),	Firmwide	Oversight	and	Control	Group,	Valuation	Control	Group ("VCG"),	Legal	and	Compliance)	provide	independent	oversight	of	the monitoring,	evaluation	and	escalation	of	risk.

# Risk	governance

The	independent	stature	of	the	Risk	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	governance	structure	and	certain	senior	management	level	committees	and	forums	that	are	primarily	responsible	for	key	risk-related functions.	There	are	additional	committees	and	forums	not	represented	in	the	chart	that	are	also	responsible	for	management	and	oversight	of	risk.

The	Board	of	Directors	provides	oversight	of	risk	principally	through	the	Board of	Directors'	Risk	Policy	Committee	("DRPC"),	Audit	Committee	and,	with respect	to	compensation,	Compensation	&	Management	Development Committee.	Each	committee	of	the	Board	oversees	reputation	risk	issues	within its	scope	of	responsibility.

The	Directors'	Risk	Policy	Committee	approves	and	periodically	reviews	the primary	risk-management	policies	of	the	Firm's	global	operations	and	oversees the	operation	of	the	Firm's	global	risk	management	framework.	The	committee's responsibilities	include	oversight	of	management's	exercise	of	its	responsibility to	assess	and	manage:	(i)	credit	risk,	market	risk,	liquidity	risk,	model	risk, structural	interest	rate	risk,	principal	risk	and	country	risk;	(ii)	the	governance frameworks	or	policies	for	operational,	fiduciary,	reputational	risks	and	the	New Business	Initiative	Approval	("NBIA")	process;	and	(iii)	capital	and	liquidity planning	and	analysis.	The	DRPC

reviews	the	firmwide	value-at-risk	and	market	stress	tolerances,	as	well	as	any other	parameter	tolerances	established	by	management	in	accordance	with	the Firm's	Risk	Appetite	Policy.	It	reviews	reports	of	significant	issues	identified	by risk	management	officers,	including	reports	describing	the	Firm's	credit	risk profile,	and	information	about	concentrations	and	country	risks.	The	Firm's	CRO, LOB	CROs,	LOB	CEOs,	heads	of	risk	for	Country	Risk,	Market	Risk,	Structural Interest	Rate	Risk,	Liquidity	Risk,	Principal	Risk,	Wholesale	Credit	Risk, Consumer	Credit	Risk,	Model	Risk,	Risk	Management	Policy,	Reputation	Risk Governance,	Fiduciary	Risk	Governance,	and	Operational	Risk	Governance	(all referred	to	as	Firmwide	Risk	Executives)	meet	with	and	provide	updates	to	the DRPC.	Additionally,	breaches	in	risk	appetite	tolerances,	liquidity	issues	that may	have	a	material	adverse	impact	on	the	Firm	and	other	significant	matters	as determined	by	the	CRO	or	Firmwide	functions	with	risk	responsibility	are escalated	to	the	DRPC.

The	Audit	Committee	has	primary	responsibility	for	assisting	the	Board	in	its oversight	of	the	system	of	controls	designed	to	reasonably	assure	the	quality	and integrity	of	the	Firm's	financial	statements	and	that	are	relied	upon	to	provide reasonable	assurance	of	the	Firm's	management	of	operational	risk.	The	Audit Committee	also	assists	the	Board	in	its	oversight	of	legal	and	compliance	risk. Internal	Audit,	an	independent	function	within	the	Firm	that	provides independent	and	objective	assessments	of	the	control	environment,	reports directly	to	the	Audit	Committee	and	administratively	to	the	CEO.	Internal	Audit conducts	independent	reviews	to	evaluate	the	Firm's	internal	control	structure and	compliance	with	applicable	regulatory	requirements	and	is	responsible	for providing	the	Audit	Committee,	senior	management	and	regulators	with	an independent	assessment	of	the	Firm's	ability	to	manage	and	control	risk.

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	and	practices.	The	Committee	reviews the	Firm's	compensation	practices	as	they	relate	to	risk	and	risk	management	in light	of	the	Firm's	objectives,	including	its	safety	and	soundness	and	the avoidance	of	practices	that	encourage	excessive	risk	taking.	The	Committee reviews	and	approves	the	terms	of	compensation	award	programs,	including recovery	provisions,	vesting	periods,	and	restrictive	covenants,	taking	into account	regulatory	requirements.	The	Committee	also	reviews	and	approves	the Firm's	overall	incentive	compensation	pools	and	reviews	those	of	each	of	the Firm's	lines	of	business	and	the	Corporate	segment.	The	Committee	reviews	the goals	relevant	to	compensation	for	the	Firm's	Operating	Committee,	reviews Operating	Committee	members'	performance	against	such	goals,	and	approves their	compensation	awards.	The	Committee	recommends	to	the	full	Board's independent	directors,	for	ratification,	the	CEO's	compensation.	In	addition,	the Committee	periodically	reviews	the	Firm's	management	development	and succession	planning,	as	well	as	the	Firm's	diversity	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,	including	credit	risk,	market	risk,	liquidity	risk,	model	risk,	structural interest	rate	risk,	principal	risk	and	country	risk.	It	also	provides	oversight	of	the governance	frameworks	for	operational,	fiduciary	and	reputational	risks.	The Committee	is	co-chaired	by	the	Firm's	CEO	and	CRO.	Members	of	the committee	include	the	Firm's	COO,	the	Firm's	CFO,	LOB	CEOs,	LOB	CROs, General	Counsel,	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	Committee,	Reputation	Risk	committees	and	regional	Risk Committees.	The	committee	escalates	significant	issues	to	the	Board	of	Directors, as	appropriate.

The	Firmwide	Control	Committee	("FCC")	is	a	forum	to	review	and	discuss firmwide	operational	risk,	metrics	and	management,	including	existing	and emerging	issues,	and	execution	against	the	operational	risk	management framework.	The	committee	is	co-chaired	by	the	Firm's	Chief	Control	Officer	and the	head	of	Firmwide	Operational	Risk	Governance/Model	Risk	and Development.	It	serves	as	an	escalation	point	for	the	line	of	business,	function and	regional	Control	Committees	and	escalates	significant	issues	to	the	Firmwide Risk	Committee,	as	appropriate.

The	Firmwide	Fiduciary	Risk	Committee	("FFRC")	is	a	forum	for	risk	matters related	to	the	Firm's	fiduciary	activities	and	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	Firmwide	Risk	Committee	and	any	other	committee considered	appropriate.

The	Firmwide	Reputation	Risk	Governance	group	seeks	to	promote	consistent management	of	reputational	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,	corporate	function,	and	regional	risk	and	control	committees:

Risk	committees	oversee	the	inherent	risks	in	the	respective	line	of	business, function	or	region,	including	the	review,	assessment	and	decision	making	relating to	specific	risks,	risk	strategy,	policy	and	controls.	These	committees	escalate issues	to	the	Firmwide	Risk	Committee,	as	appropriate.

Control	committees	oversee	the	operational	risks	and	control	environment	of	the respective	line	of	business,	function	or	region.	These	committees	escalate operational	risk	issues	to	their	respective	line	of	business,	function	or	regional Risk	committee	and	also	escalate	significant	risk	issues	(and/or	risk	issues	with potential	firmwide	impact)	to	the	Firmwide	Control	Committee.

The	Asset-Liability	Committee	("ALCO"),	chaired	by	the	Corporate	Treasurer under	the	direction	of	the	COO,	monitors	the	Firm's	overall	balance	sheet, liquidity	risk	and	interest	rate	risk.	ALCO	is	responsible	for	reviewing	and approving	the	Firm's	funds	transfer	pricing	policy	(through	which	lines	of business	"transfer"	interest	rate	and	foreign	exchange	risk	to	Treasury).	ALCO	is responsible	for	reviewing	the	Firm's	Liquidity	Risk	Management	and

Oversight	Policy	and	contingency	funding	plan.	ALCO	also	reviews	the	Firm's overall	structural	interest	rate	risk	position,	funding	requirements	and	strategy, and	the	Firm's	securitization	programs	(and	any	required	liquidity	support	by	the Firm	of	such	programs).

The	Capital	Governance	Committee,	chaired	by	the	Head	of	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	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.

Other	corporate	functions	and	forums	with	risk	management-related responsibilities	include:

The	Firmwide	Oversight	and	Control	Group	is	comprised	of	dedicated	control officers	within	each	of	the	lines	of	business	and	corporate	functional	areas,	as well	as	a	central	oversight	team.	The	group	is	charged	with	enhancing	the	Firm's controls	by	looking	within	and	across	the	lines	of	business	and	corporate functional	areas	to	identify	and	control	issues.	The	group	enables	the	Firm	to detect	control	problems	more	quickly,	escalate	issues	promptly	and	get	the	right people	involved	to	understand	common	themes	and	interdependencies	among	the various	parts	of	the	Firm.	The	group	works	closely	with	the	Firm's	other	control- related	functions,	including	Compliance,	Legal,	Internal	Audit	and	Risk Management,	to	effectively	remediate	identified	control	issues	across	all	affected areas	of	the	Firm.	As	a	result,	the	group	facilitates	the	effective	execution	of	the Firm's	control	framework	and	helps	support	operational	risk	management	across the	Firm.

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	also	includes	sub-forums	for	the	CIB, Consumer	&	Community	Banking,	Commercial	Banking,	Asset	Management	and certain	corporate	functions,	including	Treasury	and	CIO.

In	addition	to	the	committees,	forums	and	groups	listed	above,	the	Firm	has	other management	committees	and	forums	at	the	LOB	and	regional	levels,	where	risk- related	topics	are	discussed	and	escalated	as	necessary.	The	membership	of	these committees	is	composed	of	senior	management	of	the	Firm	including representation	from	the	business	and	various	control	functions.	The	committees meet	regularly	to	discuss	a	broad	range	of	topics.

The	JPMorgan	Chase	Bank	N.A.	Board	of	Directors	is	responsible	for	the oversight	of	management	on	behalf	of	JPMorgan	Chase	Bank	N.A.	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	Firm's	DRPC,	Audit	Committee	and,	with	respect	to	compensation-related matters,	the	Compensation	&	Management	Development	Committee.

# Risk	appetite

The	Firm's	overall	risk	appetite	is	established	by	management	taking	into consideration	the	Firm's	capital	and	liquidity	positions,	earnings	power,	and diversified	business	model.	The	risk	appetite	framework	is	a	tool	to	measure	the capacity	to	take	risk	and	is	expressed	in	loss	tolerance	parameters	at	the	Firm and/or	LOB	levels,	including	net	income	loss	tolerances,	liquidity	limits	and market	limits.	Performance	against	these	parameters	informs	management's strategic	decisions	and	is	reported	to	the	DRPC.

The	Firm-level	risk	appetite	parameters	are	set	and	approved	by	the	Firm's	CEO, CFO,	CRO	and	COO.	LOB-level	risk	appetite	parameters	are	set	by	the	LOB CEO,	CFO,	and	CRO	and	are	approved	by	the	Firm's	functional	heads	as	noted above.	Firmwide	LOB	diversification	allows	the	sum	of	the	LOBs'	loss tolerances	to	be	greater	than	the	Firmwide	loss	tolerance.

# Risk	identification	for	large	exposures

The	Firm	has	certain	potential	low-probability	but	plausible	and	material, idiosyncratic	risks	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	forms,	e.g.	changes	in	legislation,	an	unusual	combination	of market	events,	or	specific	counterparty	events.	These	identified	risks	are	grouped under	the	term	Risk	Identification	for	Large	Exposures	("RIFLEs").	The identified	and	monitored	RIFLEs	allow	the	Firm	to	monitor	earnings vulnerability	that	is	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,	or	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	and	derivatives	activities	with	and for	clients	and	counterparties,	as	well	as	through	its	operating	services	activities, such	as	cash	management	and	clearing	activities.	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	organization

Credit	risk	management	is	overseen	by	the	Firm's	CRO.	The	Firm's	credit	risk management	governance	consists	of	the	following	activities:

•Establishing	a	comprehensive	credit	risk	policy framework

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

•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	our	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.

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	and	are estimated	using	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,	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	industry	concentrations.

# 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.	Under	the	Firm's	model	risk	policy,	new	significant risk	management	models,	as	well	as	major	changes	to	such	models,	are	required to	be	reviewed	and	approved	by	the	Model	Review	Group	prior	to implementation	into	the	operating	environment.	Internal	Audit	also	periodically tests	the	internal	controls	around	the	modeling	process	including	the	integrity	of the	data	utilized.	For	a	discussion	of	the	Model	Review	Group,	see	page	139.	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	credit	risk	capital,	are	subject	to	stress-based	loss constraints.

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	Risk	Management,	Internal	Audit	performs	periodic	exams,	as	well as	continuous	review,	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	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,	senior	management	and	the	Board	of Directors	as	appropriate.

# CREDIT	PORTFOLIO

# 2014	Credit	Risk	Overview

In	2014,	the	consumer	credit	environment	continued	to	improve	and	the wholesale	credit	environment	remained	favorable.	Over	the	course	of	the	year, the	Firm	continued	to	actively	manage	its	underperforming	and	nonaccrual	loans and	reduce	such	exposures	through	loan	restructurings,	loan	sales	and	workouts. The	Firm	saw	decreased	downgrade,	default	and	charge-off	activity	and	improved consumer	delinquency	trends.	The	Firm	increased	its	overall	lending	activity	in both	wholesale	and	consumer	businesses.	The	combination	of	these	factors resulted	in	an	improvement	in	the	credit	quality	of	the	portfolio	compared	with 2013	and	contributed	to	the	Firm's	reduction	in	the	allowance	for	credit	losses. For	further	discussion	of	the	consumer	credit	environment	and	consumer	loans, see	Consumer	Credit	Portfolio	on	pages	113–119	and	Note	14.	For	further discussion	of	wholesale	credit	environment	and	wholesale	loans,	see	Wholesale Credit	Portfolio	on	pages	120–127	and	Note	14.

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.

For	further	information	regarding	the	credit	risk	inherent	in	the	Firm's	investment securities	portfolio,	see	Note	12.

# 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	127	and	Note	6.

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

(c) At	December	31,	2014	and	2013,	nonperforming	assets	excluded:	(1)	mortgage	loans	insured	by	U.S.	government agencies	of	$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	FFELP	of	$367	million	and	$428	million,	respectively,	that	are	90 or	more	days	past	due;	and	(3)	real	estate	owned	("REO")	insured	by	U.S.	government	agencies	of	$462	million and	$2.0	billion,	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.	For further	information	on	consumer	loans,	see Note	14.

The	credit	performance	of	the	consumer	portfolio	continues	to	benefit	from	the improvement	in	the	economy	and	home	prices.	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,	2013.	Although	late-stage delinquencies	declined,	they	remain	elevated	due	to	loss-mitigation	activities	and to	elongated	foreclosure	processing	timelines.	Losses	related	to	these	loans continue	to	be	recognized	in	accordance	with	the	Firm's	standard	charge-off practices,	but	some	delinquent	loans	that	would	otherwise	have	been	foreclosed upon	remain	in	the	mortgage	and	home	equity	loan	portfolios.

The	Credit	Card	30+	day	delinquency	rate	remains	near	historic	lows.

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) | 2014 |  | 2013 |  | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Consumer,\texcluding\tcredit\tcard |  |  |  |  |  |  |  |  |  |  |
| Loans,\texcluding\tPCI\tloans\tand\tloans\theld-for-sale |  |  |  |  |  |  |  |  |  |  |
| Home\tequity\t–\tsenior\tlien | $16,367 |  | $17,113 |  | $938 | $932 | $82 | $132 | 0.50\t% | 0.72% |
| Home\tequity\t–\tjunior\tlien | 36,375 |  | 40,750 |  | 1,590 | 1,876 | 391 | 834 | 1.03 | 1.90 |
| Prime\tmortgage,\tincluding\toption\tARMs | 104,921 |  | 87,162 |  | 2,190 | 2,666 | 39 | 59 | 0.04 | 0.07 |
| Subprime\tmortgage | 5,056 |  | 7,104 |  | 1,036 | 1,390 | (27) | 90 | (0.43) | 1.17 |
| Auto(a) | 54,536 |  | 52,757 |  | 115 | 161 | 181 | 158 | 0.34 | 0.31 |
| Business\tbanking | 20,058 |  | 18,951 |  | 279 | 385 | 305 | 337 | 1.58 | 1.81 |
| Student\tand\tother | 10,970 |  | 11,557 |  | 270 | 86 | 347 | 297 | 3.07 | 2.51 |
| Total\tloans,\texcluding\tPCI\tloans\tand\tloans\theld-for-sale | 248,283 |  | 235,394 |  | 6,418 | 7,496 | 1,318 | 1,907 | 0.55 | 0.82 |
| Loans\t–\tPCI |  |  |  |  |  |  |  |  |  |  |
| Home\tequity | 17,095 |  | 18,927 |  | NA | NA | NA | NA | NA | NA |
| Prime\tmortgage | 10,220 |  | 12,038 |  | NA | NA | NA | NA | NA | NA |
| Subprime\tmortgage | 3,673 |  | 4,175 |  | NA | NA | NA | NA | NA | NA |
| Option\tARMs | 15,708 |  | 17,915 |  | NA | NA | NA | NA | NA | NA |
| Total\tloans\t–\tPCI | 46,696 |  | 53,055 |  | NA | NA | NA | NA | NA | NA |
| Total\tloans\t–\tretained | 294,979 |  | 288,449 |  | 6,418 | 7,496 | 1,318 | 1,907 | 0.46 | 0.66 |
| Loans\theld-for-sale | 395 | (e) | 614 | (e) | 91 | — | — | — | — | — |
| Total\tconsumer,\texcluding\tcredit\tcard\tloans | 295,374 |  | 289,063 |  | 6,509 | 7,496 | 1,318 | 1,907 | 0.46 | 0.66 |
| Lending-related\tcommitments(b) | 58,153 |  | 56,057 |  |  |  |  |  |  |  |
| Receivables\tfrom\tcustomers(c) | 108 |  | 139 |  |  |  |  |  |  |  |
| Total\tconsumer\texposure,\texcluding\tcredit\tcard | 353,635 |  | 345,259 |  |  |  |  |  |  |  |
| Credit\tCard |  |  |  |  |  |  |  |  |  |  |
| Loans\tretained(d) | 128,027 |  | 127,465 |  | — | — | 3,429 | 3,879 | 2.75 | 3.14 |
| Loans\theld-for-sale | 3,021 |  | 326 |  | — | — | — | — | — | — |
| Total\tcredit\tcard\tloans | 131,048 |  | 127,791 |  | — | — | 3,429 | 3,879 | 2.75 | 3.14 |
| Lending-related\tcommitments(b) | 525,963 |  | 529,383 |  |  |  |  |  |  |  |
| Total\tcredit\tcard\texposure | 657,011 |  | 657,174 |  |  |  |  |  |  |  |
| Total\tconsumer\tcredit\tportfolio | $1,010,646 |  | $1,002,433 |  | $6,509 | $7,496 | $4,747 | $5,786 | 1.15\t% | 1.40% |
| Memo:\tTotal\tconsumer\tcredit\tportfolio,\texcluding\tPCI | $963,950 |  | $949,378 |  | $6,509 | $7,496 | $4,747 | $5,786 | 1.30\t% | 1.62% |

(a) At	December	31,	2014	and	2013,	excluded	operating	lease-related	assets	of	 $6.7	billion	and	$5.5	billion,	respectively.

(b) 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.

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

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

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

(f) At	December	31,	2014	and	2013,	nonaccrual	loans	excluded:	(1)	mortgage	loans	insured	by	U.S.	government	agencies	of	 $7.8	billion	and	$8.4	billion,	respectively,	that	are	90	or	more	days	past due;	and	(2)	student	loans	insured	by	U.S.	government	agencies	under	the	FFELP	of	$367	million	and	$428	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,	the	Firm's	policy	is	generally	to	exempt	credit	card	loans	from	being	placed	on	nonaccrual	status	as	permitted	by regulatory	guidance.

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

(h) Net	charge-offs	and	net	charge-off	rates	excluded	 $533	million	and	$53	million	of	write-offs	of	prime	mortgages	in	the	PCI	portfolio	for	the	years	ended	 December	31,	2014	and	2013.	These	write-

offs	decreased	the	allowance	for	loan	losses	for	PCI	loans.	See	Allowance	for	Credit	Losses	on	pages	128–130	for	further	details.

(i) Average	consumer	loans	held-for-sale	were	$917	million	and	$209	million,	respectively,	for	the	years	ended	December	31,	2014	and	2013.	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,	2014,	due to	prime	mortgage,	business	banking	and	auto	loan	originations,	partially	offset by	paydowns	and	the	charge-off	or	liquidation	of	delinquent	loans.	Credit performance	has	improved	across	most	portfolios	but	delinquent	residential	real estate	loans	and	home	equity	charge-offs	remain	elevated	compared	with	pre- recessionary	levels.

In	the	following	discussion	of	loan	and	lending-related	categories,	PCI	loans	are excluded	from	individual	loan	product	discussions	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,	2013 primarily	reflecting	loan	paydowns	and	charge-offs.	Early-stage	delinquencies showed	improvement	from	December	31,	2013.	Late-stage	delinquencies continue	to	be	elevated	as	improvement	in	the	number	of	loans	becoming severely	delinquent	was	offset	by	a	higher	number	of	loans	remaining	in	late- stage	delinquency	due	to	higher	average	carrying	values	on	these	delinquent loans,	reflecting	improving	collateral	values.	Senior	lien	nonaccrual	loans	were flat	compared	with	the	prior	year	while	junior	lien	nonaccrual	loans	decreased	in 2014.	Net	charge-offs	for	both	senior	and	junior	lien	home	equity	loans	declined when	compared	with	the	prior	year	as	a	result	of	improvement	in	home	prices	and delinquencies.

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	half	of	the	HELOANs	are senior	liens	and	the	remainder	are	junior	liens.	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	non-PCI	HELOCs	outstanding	was	$47	billion	at December	31,	2014.	Of	the	$47	billion,	approximately	$29	billion	have	recently recast	or	are	scheduled	to	recast	from	interest-only	to	fully	amortizing	payments, with	$3	billion	having	recast	in	2014;	$6	billion,	$7	billion,	and	$6	billion	are scheduled	to	recast	in	2015,	2016,	and	2017,	respectively;	and	$7	billion	is scheduled	to	recast	after	2017.	However,	of	the	total	$26	billion	still	remaining	to recast,	$18	billion	are	expected	to	actually	recast;	and	the	remaining	$8	billion represents	loans	to	borrowers	who	are	expected	either	to	pre-pay	or	charge-off prior	to	recast.	In	the	third	quarter	of	2014,	the	Firm	refined	its	approach	for estimating	the	number	of	HELOCs	expected	to	voluntarily	pre-pay	prior	to	recast. Based	on	the	refined	methodology,	the	number	of	loans	expected	to	pre-pay declined,	resulting	in	an	increase	in	the	number	of	loans	expected	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	loans	where	the	borrower	has	a	first	mortgage	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	is	neither delinquent	nor	modified.	At	December	31,	2014,	the	Firm	estimated	that	its	home equity	portfolio	contained	approximately	$1.8	billion	of	current	high-risk seconds,	compared	with	$2.3	billion	at	December	31,	2013.	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).	The	estimated	balance	of	these	high-risk	seconds	may	vary	from quarter	to	quarter	for	reasons	such	as	the	movement	of	related	senior	liens	into and	out	of	the	30+	day	delinquency	bucket.

# Current	high-risk	seconds

| December	31,	(in	billions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Junior\tliens\tsubordinate\tto: |  |  |
| Modified\tcurrent\tsenior\tlien | $0.7 | $0.9 |
| Senior\tlien\t30\t–\t89\tdays\tdelinquent | 0.5 | 0.6 |
| Senior\tlien\t90\tdays\tor\tmore\tdelinquent(a) | 0.6 | 0.8 |
| Total\tcurrent\thigh-risk\tseconds | $1.8 | $2.3 |

(a) Junior	liens	subordinate	to	senior	liens	that	are	90	days	or	more	past	due	are	classified	as nonaccrual	loans.	At	December	31,	2014	and	2013,	excluded	approximately	$50	million and	approximately	$100	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	$1.8	billion	of	current	high-risk	seconds	at	December	31,	2014, the	Firm	owns	approximately	10%	and	services	approximately	25%	of	the	related senior	lien	loans	to	the	same	borrowers.	The	performance	of	the	Firm's	junior lien	loans	is	generally	consistent	regardless	of	whether	the	Firm	owns,	services	or does	not	own	or	service	the	senior	lien.	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	adjustable-rate	mortgages ("ARMs")	and	loans	held-for-sale,	increased	from	December	31,	2013	due	to higher	retained	originations	partially	offset	by	paydowns,	the	run-off	of	option ARM	loans	and	the	charge-off	or	liquidation	of	delinquent	loans.	Excluding loans	insured	by	U.S.	government	agencies,	both	early-stage	and	late-stage delinquencies	showed	improvement	from	December	31,	2013.	Nonaccrual	loans decreased	from	the	prior	year	but	remain	elevated	primarily	due	to	loss mitigation	activities	and	elongated	foreclosure	processing	timelines.	Net	charge- offs	remain	low,	reflecting	continued	improvement	in	home	prices	and delinquencies.

At	December	31,	2014	and	2013,	the	Firm's	prime	mortgage	portfolio	included $12.4	billion	and	$14.3	billion,	respectively,	of	mortgage	loans	insured	and/or guaranteed	by	U.S.	government	agencies,	of	which	$9.7	billion	and	$9.6	billion, respectively,	were	30	days	or	more	past	due	(of	these	past	due	loans,	$7.8	billion and	$8.4	billion,	respectively,	were	90	days	or	more	past	due).	The	Firm	has entered	into	a	settlement	regarding	loans	insured	under	federal	mortgage insurance	programs	overseen	by	the	FHA,	HUD,	and	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.	For further	discussion	of	the	settlement,	see	Note	31.

At	December	31,	2014	and	2013,	the	Firm's	prime	mortgage	portfolio	included $16.3	billion	and	$15.6	billion,	respectively,	of	interest-only	loans,	which represented	15%	and	18%,	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,	2013,	but	remain at	elevated	levels.	Net	charge-offs	continued	to	improve	as	a	result	of improvement	in	home	prices	and	delinquencies.

Auto:	Auto	loans	increased	from	December	31,	2013	as	new	originations outpaced	paydowns	and	payoffs.	Nonaccrual	loans	improved	compared	with December	31,	2013.	Net	charge-offs	for	the	year	ended	December	31,	2014 increased	compared	with	the	prior	year,	reflecting	higher	average	loss	per	default as	national	used	car	valuations	declined	from	historically	strong	levels.	The	auto loan	portfolio	reflects	a	high	concentration	of	prime-quality	credits.

Business	banking:	Business	banking	loans	increased	from	December	31,	2013 due	to	an	increase	in	loan	originations.	Nonaccrual	loans	improved	compared with	December	31,	2013.	Net	charge-offs	for	the	year	ended	December	31,	2014 decreased	from	the	prior	year.

Student	and	other:	Student	and	other	loans	decreased	from	December	31,	2013 due	primarily	to	the	run-off	of	the	student	loan	portfolio.	Student	nonaccrual loans	increased	from	December	31,	2013	due	to	a	modification	program	began	in May	2014	that	extended	the	deferment	period	for	up	to	24	months	for	certain student	loans,	which	resulted	in	extending	the	maturity	of	these	loans	at	their original	contractual	interest	rates.

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

As	of	December	31,	2014,	approximately	16%	of	the	option	ARM	PCI	loans	were delinquent	and	approximately	57%	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,<br>(in	billions) | Lifetime	loss<br>	estimates(a) |  | LTD	liquidation<br>	losses(b) |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2014 | 2013 | 2014 | 2013 |
| Home\tequity | $14.6 | $14.7 | $12.4 | $12.1 |
| Prime\tmortgage | 3.8 | 3.8 | 3.5 | 3.3 |
| Subprime\tmortgage | 3.3 | 3.3 | 2.8 | 2.6 |
| Option\tARMs | 9.9 | 10.2 | 9.3 | 8.8 |
| Total | $31.6 | $32.0 | $28.0 | $26.8 |

(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 $2.3 billion	and	$3.8	billion	at	December	31,	2014	and	2013,	respectively.

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

Lifetime	principal	loss	estimates	declined	from	December	31,	2013,	to December	31,	2014,	reflecting	improvement	in	home	prices	and	delinquencies. The	decline	in	lifetime	principal	loss	estimates	during	the	year	ended December	31,	2014,	resulted	in	a	$300	million	reduction	of	the	PCI	allowance	for loan	losses	related	to	option	ARM	loans.	In	addition,	for	the	year	ended December	31,	2014,	PCI	write-offs	of	$533	million	were	recorded	against	the prime	mortgage	allowance	for	loan	losses.	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,	2014,	$94.3	billion,	or	63%	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,	Florida	and	Texas,	compared	with	$85.9	billion,	or	62%,	at	December	31,	2013.	California	had	the	greatest concentration	of	these	loans	with	26%	at	December	31,	2014,	compared	with	25%	at	December	31,	2013.	The	unpaid	principal	balance	of	PCI	loans	concentrated	in	these five	states	represented	74%	of	total	PCI	loans	at	both	December	31,	2014	and	December	31,	2013.	For	further	information	on	the	geographic	composition	of	the	Firm's residential	real	estate	loans,	see	Note	14.

# Current	estimated	LTVs	of	residential	real	estate	loans

The	current	estimated	average	loan-to-value	("LTV")	ratio	for	residential	real estate	loans	retained,	excluding	mortgage	loans	insured	by	U.S.	government agencies	and	PCI	loans,	was	71%	at	December	31,	2014,	compared	with	75%	at December	31,	2013.

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 | 2014 |  |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions,\nexcept\tratios) | Unpaid\nprincipal\nbalance | Current\testimated\nLTV\tratio(a) | Net\tcarrying\nvalue(c) | Ratio\tof\tnet\ncarrying\tvalue\nto\tcurrent\testimated\ncollateral\tvalue(c) | Unpaid\nprincipal\nbalance | Current\testimated\nLTV\tratio(a) | Net\tcarrying\nvalue(c) | Ratio\tof\tnet\ncarrying\tvalue\nto\tcurrent\testimated\ncollateral\tvalue(c) |
| Home\tequity | $17,740 | 83% (b) | $15,337 | 72% | $19,830 | 90% (b) | $17,169 | 78% |
| Prime\tmortgage | 10,249 | 76 | 9,027 | 67 | 11,876 | 83 | 10,312 | 72 |
| Subprime\tmortgage | 4,652 | 82 | 3,493 | 62 | 5,471 | 91 | 3,995 | 66 |
| Option\tARMs | 16,496 | 74 | 15,514 | 70 | 19,223 | 82 | 17,421 | 74 |

(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) 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.

(c) 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,	2014	and	2013	of	$1.2	billion	and	$1.7	billion	for	prime	mortgage,	$194	million	and	$494	million	for	option	ARMs,	respectively,	and	$1.8	billion	for	home	equity	and	$180	million for	subprime	mortgage	for	both	periods.

The	current	estimated	average	LTV	ratios	were	77%	and	88%	for	California	and Florida	PCI	loans,	respectively,	at	December	31,	2014,	compared	with	85%	and 103%,	respectively,	at	December	31,	2013.	Average	LTV	ratios	have	declined consistent	with	recent	improvements	in	home	prices.	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	contribute	to 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,	15%	had	a	current	estimated	LTV	ratio	greater	than	100%,	and	3%	had a	current	LTV	ratio	of	greater	than	125%	at	December	31,	2014,	compared	with 26%	and	7%,	respectively,	at	December	31,	2013.

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	the	residential	real	estate	portfolio,	excluding	PCI	loans, that	have	been	modified	and	seasoned	more	than	six	months	show	weighted- average	redefault	rates	of	20%	for	senior	lien	home	equity,	22%	for	junior	lien home	equity,	16%	for	prime	mortgages	including	option	ARMs,	and	29%	for subprime	mortgages.	The	cumulative	performance	metrics	for	the	PCI	residential real	estate

portfolio	modified	and	seasoned	more	than	six	months	show	weighted	average redefault	rates	of	20%	for	home	equity,	17%	for	prime	mortgages,	15%	for	option ARMs	and	32%	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	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,	2014.

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	will	generally	increase	beginning	in 2014	by	1%	per	year	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	$5 billion	at	December	31,	2014,	with	$1	billion	scheduled	to	experience	the	initial interest	rate	increase	in	each	of	2015	and	2016.	The	unpaid	principal	balance	of PCI	loans	modified	in	step-rate	modifications	was	$10	billion	at	December	31, 2014,	with	$2	billion	and	$3	billion	scheduled	to	experience	the	initial	interest rate	increase	in	2015	and	2016,	respectively.	The	impact	of	these	potential interest	rate	increases	is	considered	in	the	Firm's	allowance	for	loan	losses.	The Firm	will	continue	to	monitor	this	risk	exposure	to	ensure	that	it	is	appropriately considered	in	the	Firm's	allowance	for	loan	losses.

The	following	table	presents	information	as	of	December	31,	2014	and	2013, 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	troubled	debt	restructurings ("TDRs").	For	further	information	on	modifications	for	the	years	ended December	31,	2014	and	2013,	see	Note	14.

# Modified	residential	real	estate	loans

|  |  | 2014 |  | 2013 |
| :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions) | On–balance\nsheet\tloans | Nonaccrual\ton–\nbalance\tsheet\n\tloans(d) | On–balance\nsheet\tloans | Nonaccrual\ton–\nbalance\tsheet\n\tloans(d) |
| Modified\tresidential\treal |  |  |  |  |
| estate\tloans,\texcluding |  |  |  |  |
| PCI\tloans(a)(b) |  |  |  |  |
| Home\tequity\t–\tsenior\tlien | $1,101 | $628 | $1,146 | $641 |
| Home\tequity\t–\n\t\tjunior\tlien | 1,304 | 632 | 1,319 | 666 |
| Prime\tmortgage,\tincluding\noption\tARMs | 6,145 | 1,559 | 7,004 | 1,737 |
| Subprime\tmortgage | 2,878 | 931 | 3,698 | 1,127 |
| Total\tmodified |  |  |  |  |
| residential\treal\testate |  |  |  |  |
| loans,\texcluding\tPCI |  |  |  |  |
| loans | $11,428 | $3,750 | $13,167 | $4,171 |
| Modified\tPCI\tloans(c) |  |  |  |  |
| Home\tequity | $2,580 | NA | $2,619 | NA |
| Prime\tmortgage | 6,309 | NA | 6,977 | NA |
| Subprime\tmortgage | 3,647 | NA | 4,168 | NA |
| Option\tARMs | 11,711 | NA | 13,131 | NA |
| Total\tmodified\tPCI\nloans | $24,247 | NA | $26,895 | NA |

(a) Amounts	represent	the	carrying	value	of	modified	residential	real	estate	loans. (b) At	December	31,	2014	and	2013,	$4.9	billion	and	$7.6	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,	2014	and	2013,	nonaccrual	loans	included	$2.9	billion	and	$3.0	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,	2014	and	2013, about	consumer,	excluding	credit	card,	nonperforming	assets.

# Nonperforming	assets(a)

| December	31,	(in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Nonaccrual\tloans(b) |  |  |
| Residential\treal\testate | $5,845 | $6,864 |
| Other\tconsumer | 664 | 632 |
| Total\tnonaccrual\tloans | 6,509 | 7,496 |
| Assets\tacquired\tin\tloan\tsatisfactions |  |  |
| Real\testate\towned | 437 | 614 |
| Other | 36 | 41 |
| Total\tassets\tacquired\tin\tloan\tsatisfactions | 473 | 655 |
| Total\tnonperforming\tassets | $6,982 | $8,151 |

(a) At	December	31,	2014	and	2013,	nonperforming	assets	excluded:	(1)	mortgage	loans insured	by	U.S.	government	agencies	of	$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 FFELP	of	$367	million	and	$428	million,	respectively,	that	are	90	or	more	days	past	due; and	(3)	real	estate	owned	insured	by	U.S.	government	agencies	of	$462	million	and	$2.0 billion,	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,	they	are	all	considered	to	be performing.

Nonaccrual	loans	in	the	residential	real	estate	portfolio	totaled	$5.8	billion	and $6.9	billion	at	December	31,	2014	and	December	31,	2013,	respectively,	of	which 32%	and	34%,	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	50%	to	the	estimated net	realizable	value	of	the	collateral	at	both	December	31,	2014	and	2013.	The elongated	foreclosure	processing	timelines	are	expected	to	continue	to	result	in elevated	levels	of	nonaccrual	loans	in	the	residential	real	estate	portfolios.

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,	2014 and	2013.

# Nonaccrual	loans

Year	ended	December	31,

| (in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Beginning\tbalance | $7,496 | $9,174 |
| Additions | 4,905 | 6,618 |
| Reductions: |  |  |
| Principal\tpayments\tand\tother(a) | 1,859 | 1,559 |
| Charge-offs | 1,306 | 1,869 |
| Returned\tto\tperforming\tstatus | 2,083 | 3,793 |
| Foreclosures\tand\tother\tliquidations | 644 | 1,075 |
| Total\treductions | 5,892 | 8,296 |
| Net\tadditions/(reductions) | (987) | (1,678) |
| Ending\tbalance | $6,509 | $7,496 |

(a) Other	reductions	includes	loan	sales.

# Credit	Card

Total	credit	card	loans	increased	from	December	31,	2013	due	to	higher	new account	originations	and	increased	credit	card	sales	volume.	The	30+	day delinquency	rate	decreased	to	1.44%	at	December	31,	2014,	from	1.67%	at December	31,	2013.	For	the	years	ended	December	31,	2014	and	2013,	the	net charge-off	rates	were	2.75%	and	3.14%,	respectively.	Charge-offs	have	improved compared	with	a	year	ago	as	a	result	of	improvement	in	delinquent	loans.	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,	Illinois and	Florida	consisted	of	$54.9	billion	in	receivables,	or	43%	of	the	retained	loan portfolio,	at	December	31,	2014,	compared	with	$52.7	billion,	or	41%,	at December	31,	2013.	The	greatest	geographic	concentration	of	credit	card	retained loans	is	in	California,	which	represented	14%	and	13%	of	total	retained	loans	at December	31,	2014	and	2013,	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,	2014	and	2013,	the	Firm	had	$2.0	billion	and	$3.1	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,	2013,	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	and	trading	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	environment	remained	favorable	throughout	2014	driving an	increase	in	client	activity.	Growth	in	loans	retained	was	driven	primarily	by activity	in	Commercial	Banking,	while	growth	in	lending-related	commitments reflected	increased	activity	in	both	the	Corporate	&	Investment	Bank	and Commercial	Banking.

Discipline	in	underwriting	across	all	areas	of	lending	continues	to	remain	a	key point	of	focus,	consistent	with	evolving	market	conditions	and	the	Firm's	risk management	activities.	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.	During	the	year,	wholesale	criticized	assets	decreased	from 2013,	including	a	reduction	in	nonaccrual	loans	by	40%.

| December	31, | Credit	exposure |  | Nonperforming(d) |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2014 | 2013 | 2014 | 2013 |
| Loans\tretained | $324,502 | $308,263 | $599 | $821 |
| Loans\theld-for-sale | 3,801 | 11,290 | 4 | 26 |
| Loans\tat\tfair\tvalue | 2,611 | 2,011 | 21 | 197 |
| Loans\t–\treported | 330,914 | 321,564 | 624 | 1,044 |
| Derivative\treceivables | 78,975 | 65,759 | 275 | 415 |
| Receivables\tfrom\tcustomers\tand\nother(a) | 28,972 | 26,744 | — | — |
| Total\twholesale\tcredit-related\nassets | 438,861 | 414,067 | 899 | 1,459 |
| Lending-related\tcommitments(b) | 472,056 | 446,232 | 103 | 206 |
| Total\twholesale\tcredit\nexposure | $910,917 | $860,299 | $1,002 | $1,665 |
| Credit\tPortfolio\tManagement\nderivatives\tnotional,\tnet(c) | $(26,703) | $(27,996) | $— $ | (5) |
| Liquid\tsecurities\tand\tother\tcash |  |  |  |  |
| collateral\theld\tagainst |  |  |  |  |
| derivatives | (19,604) | (14,435) | NA | NA |

(a) Receivables	from	customers	and	other	include	$28.8	billion	and	$26.5	billion	of	margin loans	at	December	31,	2014	and	2013,	respectively,	to	prime	and	retail	brokerage customers;	these	are	classified	in	accrued	interest	and	accounts	receivable	on	the Consolidated	balance	sheets.

(b) Includes	unused	advised	lines	of	credit	of	$105.2	billion	and	$102.0	billion	as	of December	31,	2014	and	2013,	respectively.	An	advised	line	of	credit	is	a	revolving	credit line	which	specifies	the	maximum	amount	the	Firm	may	make	available	to	an	obligor,	on	a nonbinding	basis.	The	borrower	receives	written	or	oral	advice	of	this	facility.	The	Firm may	cancel	this	facility	at	any	time	by	providing	the	borrower	notice	or,	in	some	cases, without	notice	as	permitted	by	law.

(c) 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	127,	and	Note	6.

(d) Excludes	assets	acquired	in	loan	satisfactions.

The	following	tables	present	the	maturity	and	ratings	profiles	of	the	wholesale	credit	portfolio	as	of	December	31,	2014	and	2013.	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.

# Wholesale	credit	exposure	–	maturity	and	ratings	profile

|  |  | Maturity	profile(e) |  |  |  | Ratings	profile |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2014 |  |  |  |  | Investment-grade | Noninvestment-grade |  |  |
| (in\tmillions,\texcept\tratios) | Due\tin\t1\tyear\tor\nless | Due\tafter\t1\tyear\nthrough\t5\tyears | Due\tafter\t5\tyears | Total | AAA/Aaa\tto\tBBB-\n/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\nderivatives |  |  |  | (19,604) |  |  | (19,604) |  |
| Total\tderivative\treceivables,\tnet\tof\tall\tcollateral | 20,032 | 16,130 | 23,209 | 59,371 | 52,150 | 7,221 | 59,371 | 88 |
| Lending-related\tcommitments | 185,451 | 276,793 | 9,812 | 472,056 | 379,214 | 92,842 | 472,056 | 80 |
| Subtotal | 317,894 | 427,200 | 110,835 | 855,929 | 673,030 | 182,899 | 855,929 | 79 |
| 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\ncollateral\theld\tagainst\tderivatives |  |  |  | $891,313 |  |  | $891,313 |  |
| Credit\tPortfolio\tManagement\tderivatives\tnet\n\tnotional\tby\treference\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	Portfolio	Management	derivatives,	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,	2014,	may	become	a	payable prior	to	maturity	based	on	their	cash	flow	profile	or	changes	in	market	conditions.

(f) The	prior	period	amounts	have	been	revised	to	conform	with	the	current	period presentation.

# Wholesale	credit	exposure	–	selected	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,	decreased	by	16% to	$10.2	billion	at	December	31,	2014,	from	$12.2	billion	at	December	31,	2013.

Below	are	summaries	of	the	top	25	industry	exposures	as	of	December	31,	2014	and	2013.	For	additional	information	on	industry	concentrations,	see	Note	5.

| As	of	or	for	the	year	ended	December	31,	2014<br>(in	millions) | Credit<br>exposure(d) | Investment-<br>grade | Noncriticized | Noninvestment-grade<br>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 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Top\t25\tindustries(a) |  |  |  |  |  |  |  |  |  |
| Real\tEstate | $107,386 | $80,219 | $25,558 | $1,356 | $253 | $309 | $(9) | $(36) | $(27) |
| Banks\t&amp;\tFinance\tCos | 68,203 | 58,360 | 9,266 | 508 | 69 | 46 | (4) | (1,232) | (9,369) |
| Healthcare | 57,707 | 49,361 | 7,816 | 488 | 42 | 193 | 17 | (94) | (244) |
| Oil\t&amp;\tGas | 48,315 | 33,547 | 14,685 | 82 | 1 | 15 | 2 | (144) | (161) |
| Consumer\tProducts | 37,818 | 26,070 | 11,081 | 650 | 17 | 21 | — | (20) | (2) |
| Asset\tManagers | 36,374 | 31,880 | 4,436 | 57 | 1 | 38 | (12) | (9) | (4,545) |
| State\t&amp;\tMunicipal\tGovt(b) | 31,858 | 30,919 | 837 | 102 | — | 69 | 24 | (148) | (130) |
| Retail\t&amp;\tConsumer\tServices | 28,258 | 18,233 | 9,023 | 971 | 31 | 56 | 4 | (47) | (1) |
| Utilities | 28,060 | 24,058 | 3,747 | 255 | — | 198 | (3) | (155) | (193) |
| Central\tGovt | 21,081 | 20,868 | 155 | 58 | — | — | — | (11,297) | (1,071) |
| Technology | 20,977 | 13,759 | 6,557 | 641 | 20 | 24 | (3) | (225) | — |
| Machinery\t&amp;\tEquipment\tMfg | 20,573 | 12,094 | 8,229 | 250 | — | 5 | (2) | (157) | (19) |
| Transportation | 16,365 | 11,444 | 4,835 | 86 | — | 5 | (3) | (34) | (107) |
| Business\tServices | 16,201 | 8,450 | 7,512 | 224 | 15 | 10 | 5 | (9) | — |
| Metals/Mining | 15,911 | 8,845 | 6,562 | 504 | — | — | 18 | (377) | (19) |
| Media | 14,534 | 9,131 | 5,107 | 266 | 30 | 1 | (1) | (69) | (6) |
| Building\tMaterials/Construction | 13,672 | 6,721 | 6,271 | 674 | 6 | 12 | 2 | (104) | — |
| Insurance | 13,637 | 10,790 | 2,605 | 80 | 162 | — | — | (52) | (2,372) |
| Automotive | 13,586 | 8,647 | 4,778 | 161 | — | 1 | (1) | (140) | — |
| Chemicals/Plastics | 13,545 | 9,800 | 3,716 | 29 | — | 1 | (2) | (14) | — |
| Telecom\tServices | 13,136 | 8,277 | 4,303 | 546 | 10 | — | (2) | (813) | (6) |
| Securities\tFirms\t&amp;\tExchanges | 8,936 | 6,198 | 2,726 | 10 | 2 | 20 | 4 | (102) | (216) |
| Agriculture/Paper\tMfg | 7,242 | 4,890 | 2,224 | 122 | 6 | 36 | (1) | (4) | (4) |
| Aerospace/Defense | 6,070 | 5,088 | 958 | 24 | — | — | — | (71) | — |
| Leisure | 5,562 | 2,937 | 2,023 | 478 | 124 | 6 | — | (5) | (23) |
| All\tother(c) | 210,526 | 190,135 | 19,581 | 622 | 188 | 1,235 | (21) | (11,345) | (1,089) |
| Subtotal | $875,533 | $690,721 | $174,591 | $9,244 | $977 | $2,301 | $12 | $(26,703) | $(19,604) |
| Loans\theld-for-sale\tand\tloans\tat\tfair\tvalue | 6,412 |  |  |  |  |  |  |  |  |
| Receivables\tfrom\tcustomers\tand\tother | 28,972 |  |  |  |  |  |  |  |  |
| Total | $910,917 |  |  |  |  |  |  |  |  |

| As	of	or	for	the	year	ended<br>December	31,	2013<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	derivative<br>hedges(e) | Liquid	securities<br>and	other	cash<br>collateral	held<br>against	derivative<br>receivables |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Top\t25\tindustries(a) |  |  |  |  |  |  |  |  |  |  |  |
| Real\tEstate | $87,102 | $62,964 |  | $21,505 |  | $2,286 | $347 | $178 | $6 | $(66) | $(125) |
| Banks\t&amp;\tFinance\tCos | 66,881 | 56,675 |  | 9,707 |  | 431 | 68 | 14 | (22) | (2,692) | (6,227) |
| Healthcare | 45,910 | 37,635 |  | 7,952 |  | 317 | 6 | 49 | 3 | (198) | (195) |
| Oil\t&amp;\tGas | 46,934 | 34,708 |  | 11,779 |  | 436 | 11 | 34 | 13 | (227) | (67) |
| Consumer\tProducts | 34,145 | 21,100 |  | 12,505 |  | 537 | 3 | 4 | 11 | (149) | (1) |
| Asset\tManagers | 33,506 | 26,991 |  | 6,477 |  | 38 | — | 217 | (7) | (5) | (3,191) |
| State\t&amp;\tMunicipal\tGovt(b) | 35,666 | 34,563 |  | 826 |  | 157 | 120 | 40 | 1 | (161) | (144) |
| Retail\t&amp;\tConsumer\tServices | 25,068 | 16,101 |  | 8,453 |  | 492 | 22 | 6 | — | (91) | — |
| Utilities | 28,983 | 25,521 |  | 3,045 |  | 411 | 6 | 2 | 28 | (445) | (306) |
| Central\tGovt | 21,049 | 20,633 |  | 345 |  | 71 | — | — | — | (10,088) | (1,541) |
| Technology | 21,403 | 13,787 |  | 6,771 |  | 825 | 20 | — | — | (512) | — |
| Machinery\t&amp;\tEquipment\tMfg | 19,078 | 11,154 |  | 7,549 |  | 368 | 7 | 20 | (18) | (257) | (8) |
| Transportation | 13,975 | 9,683 |  | 4,165 |  | 100 | 27 | 10 | 8 | (68) | — |
| Business\tServices | 14,601 | 7,838 |  | 6,447 |  | 286 | 30 | 9 | 10 | (10) | (2) |
| Metals/Mining | 17,434 | 9,266 |  | 7,508 |  | 594 | 66 | 1 | 16 | (621) | (36) |
| Media | 13,858 | 7,783 |  | 5,658 |  | 315 | 102 | 6 | 36 | (26) | (5) |
| Building\tMaterials/Construction | 12,901 | 5,701 |  | 6,354 |  | 839 | 7 | 15 | 3 | (132) | — |
| Insurance | 13,761 | 10,681 |  | 2,757 |  | 84 | 239 | — | (2) | (98) | (1,935) |
| Automotive | 12,532 | 7,881 |  | 4,490 |  | 159 | 2 | 3 | (3) | (472) | — |
| Chemicals/Plastics | 10,637 | 7,189 |  | 3,211 |  | 222 | 15 | — | — | (13) | (83) |
| Telecom\tServices | 13,906 | 9,130 |  | 4,284 |  | 482 | 10 | — | 7 | (272) | (8) |
| Securities\tFirms\t&amp;\tExchanges | 10,035 | 4,208 | (f) | 5,806 | (f) | 14 | 7 | 1 | (68) | (4,169) | (175) |
| Agriculture/Paper\tMfg | 7,387 | 4,238 |  | 3,064 |  | 82 | 3 | 31 | — | (4) | (4) |
| Aerospace/Defense | 6,873 | 5,447 |  | 1,426 |  | — | — | — | — | (142) | (1) |
| Leisure | 5,331 | 2,950 |  | 1,797 |  | 495 | 89 | 5 | — | (10) | (14) |
| All\tother(c) | 201,298 | 180,460 |  | 19,911 |  | 692 | 235 | 1,249 | (6) | (7,068) | (367) |
| Subtotal | $820,254 | $634,287 |  | $173,792 |  | $10,733 | $1,442 | $1,894 | $16 | $(27,996) | $(14,435) |

(a) The	industry	rankings	presented	in	the	table	as	of	December	31,	2013,	are	based	on	the	industry	rankings	of	the	corresponding	exposures	at	 December	31,	2014,	not	actual	rankings	of	such exposures	at	December	31,	2013.

(b) In	addition	to	the	credit	risk	exposure	to	states	and	municipal	governments	(both	U.S.	and	non-U.S.)	at	 December	31,	2014	and	2013,	noted	above,	the	Firm	held:	$10.6	billion	and	$7.9	billion, respectively,	of	trading	securities;	$30.1	billion	and	$29.5	billion,	respectively,	of	AFS	securities;	and	 $10.2	billion	and	$920	million,	respectively,	of	HTM	securities,	issued	by	U.S.	state	and municipal	governments.	For	further	information,	see	Note	3	and	Note	12.

(c) All	other	includes:	individuals,	private	education	and	civic	organizations;	SPEs;	and	holding	companies,	representing	approximately 68%,	21%	and	5%,	respectively,	at	December	31,	2014,	and 64%,	22%	and	5%,	respectively,	at	December	31,	2013.

(d) Credit	exposure	is	net	of	risk	participations	and	excludes	the	benefit	of	"Credit	Portfolio	Management	derivatives	net	notional"	held	against	derivative	receivables	or	loans	and	"Liquid	securities	and other	cash	collateral	held	against	derivative	receivables".

(e) 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	several	industries	to	which	the	Firm	has significant	exposure	and/or	present	actual	or	potential	credit	concerns.	The Firm	is	actively	monitoring	these	exposures.	For	additional	information,	refer to	the	tables	on	the	previous	pages.

•Real	Estate:	Exposure	to	this	industry	increased	by	$20.3	billion	or	23%,	in 2014	to	$107.4	billion.	The	increase	was	largely	driven	by	growth	in multifamily	exposure	in	the	CB.	The	credit	quality	of	this	industry	improved as	the	investment-grade	portion	of	the	exposures	to	this	industry	increased	to 75%	in	2014	from	72%	in	2013.	The	ratio	of	nonaccrual	retained	loans	to	total retained	loans	decreased	to	0.32%	at	December	31,	2014	from	0.50%	at December	31,	2013.	For	further	information	on	commercial	real	estate	loans, see	Note	14.

•Oil	&	Gas:	Exposure	to	this	industry	increased	by	$1.4	billion	in	2014	to $48.3	billion,	of	which	$15.6	billion	was	drawn	at	year-end.	The	portfolio largely	consisted	of	exposure	in	North	America,	and	was	concentrated	in	the Exploration	and	Production	subsector.	The	Oil	&	Gas	portfolio	was	comprised of	69%	investment-grade	exposure,	and	was	approximately	5%	of	the	Firm's total	wholesale	credit	exposure	as	of	December	31,	2014.

# 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.	For	further	discussion	on	loans,	including	information on	credit	quality	indicators,	see	Note	14.

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.	During	the	years	ended	December	31,	2014	and	2013,	the	Firm sold	$22.8	billion	and	$16.3	billion,	respectively,	of	loans	and	lending-related commitments.

The	following	table	presents	the	change	in	the	nonaccrual	loan	portfolio	for	the years	ended	December	31,	2014	and	2013.

# Wholesale	nonaccrual	loan	activity

| Year	ended	December	31,	(in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Beginning\tbalance | $1,044 | $1,717 |
| Additions | 882 | 1,293 |
| Reductions: |  |  |
| Paydowns\tand\tother | 756 | 1,075 |
| Gross\tcharge-offs | 148 | 241 |
| Returned\tto\tperforming\tstatus | 303 | 279 |
| Sales | 95 | 371 |
| Total\treductions | 1,302 | 1,966 |
| Net\treductions | (420) | (673) |
| Ending\tbalance | $624 | $1,044 |

The	following	table	presents	net	charge-offs,	which	are	defined	as	gross	charge- offs	less	recoveries,	for	the	years	ended	December	31,	2014	and	2013.	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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Loans\t–\treported |  |  |
| Average\tloans\tretained | $316,060 | $307,340 |
| Gross\tcharge-offs | 151 | 241 |
| Gross\trecoveries | (139) | (225) |
| Net\tcharge-offs | 12 | 16 |
| Net\tcharge-off\trate | —% | 0.01% |

# 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	that	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	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	$229.6	billion	and	$218.9	billion	as of	December	31,	2014	and	2013,	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	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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Interest\trate | $33,725 | $25,782 |
| Credit\tderivatives | 1,838 | 1,516 |
| Foreign\texchange | 21,253 | 16,790 |
| Equity | 8,177 | 12,227 |
| Commodity | 13,982 | 9,444 |
| Total,\tnet\tof\tcash\tcollateral | 78,975 | 65,759 |
| Liquid\tsecurities\tand\tother\tcash\tcollateral\theld\nagainst\tderivative\treceivables | (19,604) | (14,435) |
| Total,\tnet\tof\tall\tcollateral | $59,371 | $51,324 |

Derivative	receivables	reported	on	the	Consolidated	balance	sheets	were	$79.0 billion	and	$65.8	billion	at	December	31,	2014	and	2013,	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	G7	government	bonds)	and	other cash	collateral	held	by	the	Firm	aggregating	$19.6	billion	and	$14.4	billion	at December	31,	2014	and	2013,	respectively,	that	may	be	used	as	security	when	the fair	value	of	the	client's	exposure	is	in	the	Firm's	favor.

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,	2014	and	2013,	the	Firm	held	$48.6	billion	and	$50.8 billion,	respectively,	of	this	additional	collateral.	The	prior	period	amount	has been	revised	to	conform	with	the	current	period	presentation.	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	exposure	to	a	counterparty	is	an	extreme	measure	of	exposure	calculated	at a	97.5%	confidence	level.	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.	The	measurement	is	done	by	equating	the	unexpected	loss	in	a derivative	counterparty	exposure	(which	takes	into	consideration	both	the	loss volatility	and	the	credit	rating	of	the	counterparty)	with	the	unexpected	loss	in	a loan	exposure	(which	takes	into	consideration	only	the	credit	rating	of	the counterparty).	DRE	is	a	less	extreme	measure	of	potential	credit	loss	than	Peak and	is	the	primary	measure	used	by	the	Firm	for	credit	approval	of	derivative transactions.

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	$37.5	billion	and	$35.4 billion	at	December	31,	2014	and	2013,	respectively,	compared	with	derivative receivables,	net	of	all	collateral,	of	$59.4	billion	and	$51.3	billion	at December	31,	2014	and	2013,	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	DRE	and	AVG metrics.	The	two	measures	generally	show	that	exposure	will	decline	after	the first	year,	if	no	new	trades	are	added	to	the	portfolio.

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,	for	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 |  | 2014 |  | 2013(a) |
| :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions,\texcept\tratios) | Exposure\tnet\tof\tall\ncollateral | %\tof\texposure\tnet\tof\tall\ncollateral | Exposure\tnet\tof\tall\ncollateral | %\tof\texposure\tnet\tof\tall\ncollateral |
| AAA/Aaa\tto\tAA-/Aa3 | $19,202 | 32% | $12,953 | 25% |
| A+/A1\tto\tA-/A3 | 13,940 | 24 | 12,930 | 25 |
| BBB+/Baa1\tto\tBBB-/Baa3 | 19,008 | 32 | 15,220 | 30 |
| BB+/Ba1\tto\tB-/B3 | 6,384 | 11 | 6,806 | 13 |
| CCC+/Caa1\tand\tbelow | 837 | 1 | 3,415 | 7 |
| Total | $59,371 | 100% | $51,324 | 100% |

(a)	The	prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation.

As	noted	above,	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	88% as	of	December	31,	2014,	largely	unchanged	compared	with	86%	as	of December	31,	2013.

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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Credit\tderivatives\tused\tto\tmanage: |  |  |
| Loans\tand\tlending-related\tcommitments | $2,047 | $2,764 |
| Derivative\treceivables | 24,656 | 25,328 |
| Total\tnet\tprotection\tpurchased | 26,703 | 28,092 |
| Total\tnet\tprotection\tsold | — | 96 |
| Credit\tportfolio\tmanagement\tderivatives\tnotional,\nnet | $26,703 | $27,996 |

(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.

The	allowance	for	loan	losses	includes	an	asset-specific	component,	a	formula- based	component,	and	a	component	related	to	PCI	loans.	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	161– 165	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	Committees	of	the	Board	of	Directors	of	the	Firm.	As of	December	31,	2014,	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	reflected	a reduction	from	December	31,	2013,	primarily	due	to	the	continued	improvement in	home	prices	and	delinquencies	in	the	residential	real	estate	portfolio	and	the run-off	of	the	student	loan	portfolio.	For	additional	information	about delinquencies	and	nonaccrual	loans	in	the	consumer,	excluding	credit	card,	loan portfolio,	see	Consumer	Credit	Portfolio	on	pages	113–119	and	Note	14.

The	credit	card	allowance	for	loan	losses	reflected	a	reduction	from December	31,	2013,	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.	For	additional information	about	delinquencies	in	the	credit	card	loan	portfolio,	see	Consumer Credit	Portfolio	on	pages	113–119	and	Note	14.

The	wholesale	allowance	for	credit	losses	decreased	from	December	31,	2013, reflecting	a	continued	favorable	credit	environment	as	evidenced	by	low	charge- off	rates,	and	declining	nonaccrual	balances	and	other	portfolio	activity.

# Summary	of	changes	in	the	allowance	for	credit	losses

|  |  | 2014 |  |  |  | 2013 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 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, | $8,456 | $3,795 | $4,013 | $16,264 | $12,292 | $5,501 | $4,143 | $21,936 |
| Gross\tcharge-offs | 2,132 | 3,831 | 151 | 6,114 | 2,754 | 4,472 | 241 | 7,467 |
| Gross\trecoveries | (814) | (402) | (139) | (1,355) | (847) | (593) | (225) | (1,665) |
| Net\tcharge-offs | 1,318 | 3,429 | 12 | 4,759 | 1,907 | 3,879 | 16 | 5,802 |
| Write-offs\tof\tPCI\tloans (a) | 533 | — | — | 533 | 53 | — | — | 53 |
| Provision\tfor\tloan\tlosses | 414 | 3,079 | (269) | 3,224 | (1,872) | 2,179 | (119) | 188 |
| Other | 31 | (6) | (36) | (11) | (4) | (6) | 5 | (5) |
| Ending\tbalance\tat\tDecember\t31, | $7,050 | $3,439 | $3,696 | $14,185 | $8,456 | $3,795 | $4,013 | $16,264 |
| Impairment\tmethodology |  |  |  |  |  |  |  |  |
| Asset-specific(b) | $539 | $500 | $87 | $1,126 | $601 | $971 | $181 | $1,753 |
| Formula-based | 3,186 | 2,939 | 3,609 | 9,734 | 3,697 | 2,824 | 3,832 | 10,353 |
| PCI | 3,325 | — | — | 3,325 | 4,158 | — | — | 4,158 |
| Total\tallowance\tfor\tloan\tlosses | $7,050 | $3,439 | $3,696 | $14,185 | $8,456 | $3,795 | $4,013 | $16,264 |
| Allowance\tfor\tlending-related\tcommitments |  |  |  |  |  |  |  |  |
| Beginning\tbalance\tat\tJanuary\t1, | $8 | $— | $697 | $705 | $7 | $— | $661 | $668 |
| Provision\tfor\tlending-related\tcommitments | 5 | — | (90) | (85) | 1 | — | 36 | 37 |
| Other | — | — | 2 | 2 | — | — | — | — |
| Ending\tbalance\tat\tDecember\t31, | $13 | $— | $609 | $622 | $8 | $— | $697 | $705 |
| Impairment\tmethodology |  |  |  |  |  |  |  |  |
| Asset-specific | $— | $— | $60 | $60 | $— | $— | $60 | $60 |
| Formula-based | 13 | — | 549 | 562 | 8 | — | 637 | 645 |
| (c)\nTotal\tallowance\tfor\tlending-related\tcommitments | $13 | $— | $609 | $622 | $8 | $— | $697 | $705 |
| Total\tallowance\tfor\tcredit\tlosses | $7,063 | $3,439 | $4,305 | $14,807 | $8,464 | $3,795 | $4,710 | $16,969 |
| Memo: |  |  |  |  |  |  |  |  |
| Retained\tloans,\tend\tof\tperiod | $294,979 | $128,027 | $324,502 | $747,508 | $288,449 | $127,465 | $308,263 | $724,177 |
| Retained\tloans,\taverage | 289,212 | 124,604 | 316,060 | 729,876 | 289,294 | 123,518 | 307,340 | 720,152 |
| PCI\tloans,\tend\tof\tperiod | 46,696 | — | 4 | 46,700 | 53,055 | — | 6 | 53,061 |
| Credit\tratios |  |  |  |  |  |  |  |  |
| Allowance\tfor\tloan\tlosses\tto\tretained\tloans | 2.39% | 2.69% | 1.14% | 1.90% | 2.93% | 2.98% | 1.30% | 2.25% |
| (d)\nAllowance\tfor\tloan\tlosses\tto\tretained\tnonaccrual\tloans | 110 | NM | 617 | 202 | 113 | NM | 489 | 196 |
| Allowance\tfor\tloan\tlosses\tto\tretained\tnonaccrual\tloans\nexcluding\tcredit\tcard | 110 | NM | 617 | 153 | 113 | NM | 489 | 150 |
| Net\tcharge-off\trates | 0.46 | 2.75 | — | 0.65 | 0.66 | 3.14 | 0.01 | 0.81 |
| Credit\tratios,\texcluding\tresidential\treal\testate\tPCI\nloans |  |  |  |  |  |  |  |  |
| Allowance\tfor\tloan\tlosses\tto\nretained\tloans | 1.50 | 2.69 | 1.14 | 1.55 | 1.83 | 2.98 | 1.30 | 1.80 |
| Allowance\tfor\tloan\tlosses\tto\nretained\tnonaccrual\tloans(d) | 58 | NM | 617 | 155 | 57 | NM | 489 | 146 |
| Allowance\tfor\tloan\tlosses\tto\nretained\tnonaccrual\tloans\texcluding\tcredit\tcard | 58 | NM | 617 | 106 | 57 | NM | 489 | 100 |
| Net\tcharge-off\trates | 0.55% | 2.75% | —% | 0.70% | 0.82% | 3.14% | 0.01% | 0.87% |

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	77–78.

(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.

(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,	2014,	the	provision	for	credit	losses	was	$3.1 billion,	compared	with	$225	million	for	the	year	ended	December	31,	2013.

The	increase	in	consumer,	excluding	credit	card,	provision	for	credit	losses	for the	year	ended	December	31,	2014	reflected	a	$904	million	reduction	in	the allowance	for	loan	losses,	as	noted	above	in	the	Allowance	for	Credit	Losses discussion,	which	was	lower	than	the	$3.8	billion	reduction	in	the	prior	year.	The lower	allowance	reduction	was	partially	offset	by	lower	net	charge-offs	in	2014.

The	increase	in	credit	card	provision	for	credit	losses	for	the	year	ended December	31,	2014	reflected	a	$350	million

reduction	in	the	allowance	for	loan	losses,	as	noted	above	in	the	Allowance	for Credit	Losses	discussion,	which	was	lower	than	the	$1.7	billion	reduction	in	the prior	year.	The	lower	allowance	reduction	was	partially	offset	by	lower	net charge-offs	in	2014.

The	wholesale	provision	for	credit	losses	for	the	year	ended	December	31,	2014 reflected	a	continued	favorable	credit	environment	as	evidenced	by	low	charge- off	rates,	and	declining	nonaccrual	balances	and	other	portfolio	activity.

For	further	information	on	the	provision	for	credit	losses,	see	the	Consolidated Results	of	Operations	on	pages	68–71.

| Year	ended	December	31, |  | 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) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Consumer,\texcluding\tcredit\tcard | $414 | $(1,872) | $302 | $5 | $1 | $— | $419 | $(1,871) | $302 |
| Credit\tcard | 3,079 | 2,179 | 3,444 | — | — | — | 3,079 | 2,179 | 3,444 |
| Total\tconsumer | 3,493 | 307 | 3,746 | 5 | 1 | — | 3,498 | 308 | 3,746 |
| Wholesale | (269) | (119) | (359) | (90) | 36 | (2) | (359) | (83) | (361) |
| Total | $3,224 | $188 | $3,387 | $(85) | $37 | $(2) | $3,139 | $225 | $3,385 |

# 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	is	an	independent	risk	management	function	that	identifies	and monitors	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.

# Risk	measurement

# 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:

# 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	lines	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	by	Risk Management	to	limit	approvers,	Market	Risk	and	senior	management.	In	the event	of	a	breach,	Market	Risk	consults	with	Firm	senior	management	and	lines 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	for	derivatives	is	generally	measured	after	consideration	of	DVA	and	FVA	on	those	positions;	market	risk	for	structured	notes	is	generally	measured	without	consideration	to	such adjustments.

# 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	overarching	VaR	model	framework	used	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 necessary/appropriate	information	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.	This means	that,	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	twelve	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.

Data	sources	used	in	VaR	models	may	be	the	same	as	those	used	for	financial statement	valuations.	However,	in	cases	where	market	prices	are	not	observable, or	where	proxies	are	used	in	VaR	historical	time	series,	the	sources	may	differ.	In addition,	the	daily	market	data	used	in	VaR	models	may	be	different	than	the independent	third-party	data	collected	for	VCG	price	testing	in	their	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.

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.

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.

In	addition,	for	certain	products,	specific	risk	parameters	are	not	captured	in	VaR due	to	the	lack	of	inherent	liquidity	and	availability	of	appropriate	historical	data. 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.

The	Firm	uses	alternative	methods	to	capture	and	measure	those	risk	parameters that	are	not	otherwise	captured	in	VaR,	including	economic-value	stress	testing and	nonstatistical	measures	as	described	further	below.

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	will	also	affect	historical	comparisons	of	VaR	results. Model	changes	go	through	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	139.

Separately,	the	Firm	calculates	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, |  |  | 2014 |  |  |  |  | 2013 |  |  |  |  | At	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | \tAvg. |  | Min | Max |  | \tAvg. |  | Min |  | Max |  | 2014 |  | 2013 | 2013 |
| CIB\ttrading\tVaR\tby\trisk\ttype |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Fixed\tincome | $34 |  | $23 | $45 |  | $43 |  | $23 |  | $62 |  | $34 |  | $36 |  |
| Foreign\texchange | 8 |  | 4 | 25 |  | 7 |  | 5 |  | 11 |  | 8 |  | 9 |  |
| Equities | 15 |  | 10 | 23 |  | 13 |  | 9 |  | 21 |  | 22 |  | 14 |  |
| Commodities\tand\tother | 8 |  | 5 | 14 |  | 14 |  | 11 |  | 18 |  | 6 |  | 13 |  |
| Diversification\tbenefit\tto\tCIB\ttrading\tVaR | (30) | (a) | (b)\nNM | NM | (b) | (34) | (a) | NM | (b) | NM | (b) | (32) | (a) | (36) | (a) |
| CIB\ttrading\tVaR | 35 |  | 24 | 49 |  | 43 |  | 21 |  | 66 |  | 38 |  | 36 |  |
| Credit\tportfolio\tVaR | 13 |  | 8 | 18 |  | 13 |  | 10 |  | 18 |  | 16 |  | 11 |  |
| Diversification\tbenefit\tto\tCIB\tVaR | (8) | (a) | (b)\nNM | NM | (b) | (9) | (a) | NM | (b) | NM | (b) | (9) | (a) | (5) | (a) |
| CIB\tVaR | 40 |  | 29 | 56 |  | 47 |  | 25 |  | 74 |  | 45 |  | 42 |  |
| Mortgage\tBanking\tVaR | 7 |  | 2 | 28 |  | 12 |  | 4 |  | 24 |  | 3 |  | 5 |  |
| Treasury\tand\tCIO\tVaR\t(c) | 4 |  | 3 | 6 |  | 6 |  | 3 |  | 14 |  | 4 |  | 4 |  |
| Asset\tManagement\tVaR | 3 |  | 2 | 4 |  | 4 |  | 2 |  | 5 |  | 2 |  | 3 |  |
| Diversification\tbenefit\tto\tother\tVaR | (4) | (a) | (b)\nNM | NM | (b) | (8) | (a) | NM | (b) | NM | (b) | (3) | (a) | (5) | (a) |
| Other\tVaR | 10 |  | 5 | 27 |  | 14 |  | 6 |  | 28 |  | 6 |  | 7 |  |
| Diversification\tbenefit\tto\tCIB\tand\tother\tVaR | (7) | (a) | (b)\nNM | NM | (b) | (9) | (a) | NM | (b) | NM | (b) | (5) | (a) | (5) | (a) |
| Total\tVaR | $43 |  | $30 | $70 |  | $52 |  | $29 |  | $87 |  | $46 |  | $44 |  |

(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. (c) The	Treasury	and	CIO	VaR	includes	Treasury	VaR	as	of	the	third	quarter	of	2013.

As	presented	in	the	table	above,	average	Total	VaR	and	average	CIB	VaR decreased	during	2014,	compared	with	2013.	The	decrease	in	Total	VaR	was primarily	due	to	risk	reduction	in	CIB	and	Mortgage	Banking	as	well	as	lower volatility	in	the	historical	one-year	look-back	period	during	2014	versus	2013.

Average	CIB	trading	VaR	decreased	during	2014	primarily	due	to	lower	VaR	in Fixed	Income	(driven	by	unwinding	of	risk	and	redemptions	in	the	synthetic credit	portfolio,	and	lower	volatility	in	the	historical	one-year	look-back	period) and	to	reduced	risk	positions	in	commodities.

Average	Mortgage	Banking	VaR	decreased	during	2014	as	a	result	of	reduced exposures	due	to	lower	loan	originations.

Average	Treasury	and	CIO	VaR	decreased	during	2014,	compared	with	2013. The	decrease	predominantly	reflected	the	unwind	and	roll-off	of	certain	marked to	market	positions,	and	lower	market	volatility	in	the	historical	one-year	look- back	period.

The	Firm's	average	Total	VaR	diversification	benefit	was	$7	million	or	16%	of the	sum	for	2014,	compared	with	$9	million	or	17%	of	the	sum	for	2013.	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:	profits	and	losses	on	the Firm's	Risk	Management	positions,	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	on the	Firm's	Risk	Management	positions	for	the	year	ended	December	31,	2014. 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	backtesting	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,	2014,	the	Firm	observed	five	VaR	band	breaks	and posted	gains	on	157	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	framework	uses	a	grid-based	approach, which	calculates	multiple	magnitudes	of	stress	for	both	market	rallies	and	market sell-offs	for	each	risk	factor.	Stress-test	results,	trends	and	explanations	based	on current	market	risk	positions	are	reported	to	the	Firm's	senior	management	and	to the	lines	of	business	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.

Stress	scenarios	are	defined	and	reviewed	by	Market	Risk,	and	significant changes	are	reviewed	by	the	relevant	Risk	Committees.	While	most	of	the scenarios	estimate	losses	based	on	significant	market	moves,	such	as	an	equity market	collapse	or	credit	crisis,	the	Firm	also	develops	scenarios	to	quantify	risk arising	from	specific	portfolios	or	concentrations	of	risks,	which	attempt	to capture	certain	idiosyncratic	market	movements.	Scenarios	may	be	redefined	on an	ongoing	basis	to	reflect	current	market	conditions.	Ad	hoc	scenarios	are	run	in response	to	specific	market	events	or	concerns.	The	Firm's	stress	testing framework	is	utilized	in	calculating	results	under	scenarios	mandated	by	the Federal	Reserve's	CCAR	and	ICAAP	("Internal	Capital	Adequacy	Assessment Process")	processes.

# 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	used	for	tactical	control	and	monitoring	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	total	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	core	net	interest	income	(see page	78	for	further	discussion	of	core	net	interest	income)	and	interest	rate- sensitive	fees.	Earnings-at-risk	excludes	the	impact	of	trading	activities	and	MSR, 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	Risk	Policy	Committee	of	the	Firm's	Board	of Directors.	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.

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,	corporate-wide	basis.	Business	units	transfer	their	interest	rate	risk to	Treasury	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	manages	structural	interest	rate	risk	generally	through	its	investment securities	portfolio	and	related	derivatives.

The	Firm	conducts	simulations	of	changes	in	structural	interest	rate-sensitive revenue	under	a	variety	of	interest	rate	scenarios.	Earnings-at-risk	scenarios estimate	the	potential	change	in	this	revenue,	and	the	corresponding	impact	to	the Firm's	pretax	core	net	interest	income,	over	the	following	12	months,	utilizing multiple	assumptions	as	described	below.	These	scenarios	highlight	exposures	to changes	in	interest	rates,	pricing	sensitivities	on	deposits,	optionality	and	changes in	product	mix.	The	scenarios	include	forecasted	balance	sheet	changes,	as	well as	prepayment	and	reinvestment	behavior.	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.

# JPMorgan	Chase's	12-month	pretax	core	net	interest	income	sensitivity profiles.

# (Excludes	the	impact	of	trading	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	is	largely	a	result	of	reinvesting	at	higher	yields and	assets	re-pricing	at	a	faster	pace	than	deposits.

Additionally,	another	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	core	net	interest income	benefit	of	$566	million.	The	increase	in	core	net	interest	income	under this	scenario	reflects	the	Firm	reinvesting	at	the	higher	long-term	rates,	with funding	costs	remaining	unchanged.

# 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	is	an	independent	risk	management function	which	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

•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	Federal	Financial	Institutions	Examination	Council	("FFIEC")	bank regulatory	requirements	as	there	are	significant	differences	in	reporting methodology.	For	further	information	on	the	FFIEC's	reporting	methodology,	see Cross-border	outstandings	on	page	325.

# 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	activity	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	for	early	identification	of	potential	country	risk	concerns, such	as	signaling	models	and	ratings	indicators.

# Country	risk	reporting

The	following	table	presents	the	Firm's	top	20	exposures	by	country	(excluding the	U.S.)	as	of	December	31,	2014.	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,\t2014 |  |  |
| (in\tbillions) | Lending(a) | Trading\tand\ninvesting(b)(c) | Other(d) | Total\texposure |
| United\tKingdom | $25.8 | $31.1 | $1.4 | $58.3 |
| Germany | 23.5 | 21.6 | 0.2 | 45.3 |
| Netherlands | 6.1 | 19.2 | 2.1 | 27.4 |
| France | 11.4 | 15.2 | 0.2 | 26.8 |
| China | 10.8 | 7.0 | 0.5 | 18.3 |
| Japan | 11.5 | 5.5 | 0.4 | 17.4 |
| Australia | 6.4 | 10.8 | — | 17.2 |
| Canada | 12.4 | 4.2 | 0.3 | 16.9 |
| Switzerland | 9.3 | 1.7 | 2.3 | 13.3 |
| India | 5.8 | 6.2 | 0.6 | 12.6 |
| Brazil | 6.3 | 6.3 | — | 12.6 |
| Korea | 5.1 | 5.2 | 0.1 | 10.4 |
| Spain | 3.4 | 3.5 | — | 6.9 |
| Hong\tKong | 1.7 | 4.1 | 1.0 | 6.8 |
| Italy | 2.4 | 3.4 | 0.2 | 6.0 |
| Belgium | 3.1 | 2.6 | 0.1 | 5.8 |
| Taiwan | 2.2 | 3.5 | — | 5.7 |
| Singapore | 3.1 | 1.9 | 0.5 | 5.5 |
| Mexico | 2.5 | 3.0 | — | 5.5 |
| Luxembourg | 3.5 | 0.3 | 1.1 | 4.9 |

(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	undrawn	commitments	to	extend	credit.	Excludes	intra-day and	operating	exposures,	such	as	from	settlement	and	clearing	activities.

(b) Includes	market-making	inventory,	securities	held	in	AFS	accounts,	counterparty	exposure on	derivative	and	securities	financings	net	of	collateral	and	hedging.

(c) Includes	single-name	and	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.

The	Firm's	country	exposure	to	Russia	was	$4.2	billion	at	December	31,	2014. The	Firm	is	closely	monitoring	events	in	the	region,	and	assessing	the	impact	of falling	oil	prices,	a	weakening	currency,	ongoing	sanctions	and	potential countermeasures	such	as	capital	controls.	The	Firm	is	also	focused	on	possible contagion	effects,	via	trade,	financial	or	political	channels.

# 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,	but	primarily	for	the	measurement, monitoring	and	management	of	risk	positions.	Valuation	models	are	employed	by the	Firm	to	value	certain	financial	instruments	that	cannot	otherwise	be	valued using	quoted	prices.	These	valuation	models	may	also	be	employed	as	inputs	to risk	management	models,	including	VaR	and	economic	stress	models.	The	Firm also	makes	use	of	models	for	a	number	of	other	purposes,	including	the calculation	of	regulatory	capital	requirements	and	estimating	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	(within	the	Model	Risk	and	Development	unit)	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	for	changes 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	are	independent	of	the	model owners	and	they	review	and	approve	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 and	Development	unit,	and	the	Firmwide	Model	Risk	and	Development 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,	new	models,	as	well	as	material	changes	to existing	models,	are	reviewed	and	approved	by	the	Model	Risk	function	prior	to implementation	in	the	operating	environment.

In	the	event	that	the	Model	Risk	function	does	not	approve	a	model,	the	model owner	is	required	to	remediate	the	model	within	a	time	period	agreed	upon	with the	Model	Risk	function.	The	model	owner	is	also	required	to	resubmit	the	model for	review	to	the	Model	Risk	function	and	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.	The	Firm	may also	implement	other	appropriate	risk	measurement	tools	to	augment	the	model that	is	subject	to	remediation.	In	certain	circumstances,	exceptions	to	the	Firm's model	risk	policy	may	be	granted	by	the	head	of	the	Model	Risk	function	to allow	a	model	to	be	used	prior	to	review	or	approval.

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	including	affordable	housing	and	alternative energy	investments,	private	equity,	and	mezzanine/junior	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.	Targeted	levels	for	total	and	annual	investments	are	established in	order	to	manage	the	overall	size	of	the	portfolios.	Industry,	geographic,	and position	level	concentration	limits	are	in	place	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.

The	Firm	has	taken	steps	to	reduce	its	exposure	to	principal	investments,	selling portions	of	Corporate's	One	Equity	Partners	private	equity	portfolio	and	the CIB's	Global	Special	Opportunities	Group	equity	and	mezzanine	financing portfolio.

# OPERATIONAL	RISK	MANAGEMENT

Operational	risk	is	the	risk	of	loss	resulting	from	inadequate	or	failed	processes or	systems	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	overall Operational	Risk	Management	Framework	("ORMF")	which	comprises governance	oversight,	risk	assessment,	capital	measurement,	and	reporting	and monitoring.	The	ORMF	is	intended	to	enable	the	Firm	to	function	with	a	sound and	well-controlled	operational	environment.

Risk	Management	is	responsible	for	prescribing	the	ORMF	to	the	lines	of business	and	corporate	functions	and	to	provide	independent	oversight	of	its implementation.	In	2014,	Operational	Risk	Officers	("OROs")	were	appointed across	each	line	of	business	and	corporate	function	to	provide	this	independent oversight.

The	lines	of	business	and	corporate	functions	are	responsible	for	implementing the	ORMF.	The	Firmwide	Oversight	and	Control	Group,	comprised	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	review	and monitoring	of	ORMF	execution.

# Operational	risk	management	framework

The	components	of	the	Operational	Risk	Management	Framework	are:

# Oversight	and	governance

Control	committees	oversee	the	operational	risks	and	control	environment	of	the respective	line	of	business,	function	or	region.	These	committees	escalate operational	risk	issues	to	their	respective	line	of	business,	function	or	regional Risk	committee	and	also	escalate	significant	risk	issues	(and/or	risk	issues	with potential	Firmwide	impact)	to	the	Firmwide	Control	Committee	("FCC").	The FCC	provides	a	monthly	forum	for	reviewing	and	discussing	Firmwide operational	risk	metrics	and	management,	including	existing	and	emerging	issues, and	reviews	execution	against	the	ORMF.	It	escalates	significant	issues	to	the Firmwide	Risk	Committee,	as	appropriate.	For	additional	information	on	the Firmwide	Control	Committee,	see	Risk	Governance	on	pages	106–109.

# Risk	self-assessment

In	order	to	evaluate	and	monitor	operational	risk,	the	lines	of	business	and functions	utilize	the	Firm's	standard	risk	and	control	self-assessment	("RCSA") process	and	supporting	architecture.	The	RCSA	process	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.	Commencing	in	2015,	Risk	Management	will	perform	sample	independent challenge	of	the	RCSA	program.

# Risk	reporting	and	monitoring

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.	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.

The	Firm	has	a	process	for	capturing,	tracking	and	monitoring	operational	risk events.	The	Firm	analyzes	errors	and	losses	and	identifies	trends.	Such	analysis enables	identification	of	the	causes	associated	with	risk	events	faced	by	the	lines of	business.

# Capital	measurement

Operational	risk	capital	is	measured	primarily	using	a	statistical	model	based	on the	Loss	Distribution	Approach	("LDA").	The	operational	risk	capital	model	uses actual	losses	(internal	and	external	to	the	Firm),	an	inventory	of	material	forward- looking	potential	loss	scenarios	and	adjustments	to	reflect	changes	in	the	quality of	the	control	environment	in	determining	Firmwide	operational	risk	capital.	This methodology	is	designed	to	comply	with	the	Advanced	Measurement	rules	under the	Basel	framework.

The	Firm's	capital	methodology	incorporates	four	required	elements	of	the Advanced	Measurement	Approach	("AMA"):

# •Internal

losses,

•External

•Scenario	analysis,	and

•Business	environment	and	internal	control	factors ("BEICF").

The	primary	component	of	the	operational	risk	capital	estimate	is	the	result	of	a statistical	model,	the	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	loss	over	a	one-year	time	horizon,	at	a	99.9% confidence	level.	The	LDA	model	incorporates	actual	operational	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	LDA	is	supplemented	by	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	management	judgment	and	feedback	from	its	bank regulators.	For	information	related	to	operational	risk	RWA,	see	Regulatory capital	on	pages	146–153.

# Audit	alignment

Internal	Audit	utilizes	a	risk-based	program	of	audit	coverage	to	provide	an independent	assessment	of	the	design	and	effectiveness	of	key	controls	over	the Firm's	operations,	regulatory	compliance	and	reporting.	This	includes	reviewing the	operational	risk	framework,	the	effectiveness	of	the	RCSA	process,	and	the loss	data-collection	and	reporting	activities.

# Insurance

One	of	the	ways	operational	loss	is	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	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	against attempts	by	unauthorized	parties	to	obtain	access	to	confidential	information, destroy	data,	disrupt	or	degrade	service,	sabotage	systems	or	cause	other	damage. In	2014,	the	Firm	spent	more	than	$250	million,	and	had	approximately	1,000 people	focused	on	cybersecurity	efforts,	and	these	efforts	are	expected	to	grow significantly	over	the	coming	years.

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.	On	October	2,	2014,	the	Firm	updated	that	information	and disclosed	that,	while	user	contact	information	(name,	address,	phone	number	and email	address)	and	internal	JPMorgan	Chase	information	relating	to	such	users had	been	compromised,	there	had	been	no	evidence	that	account	information	for such	affected	customers	--	account	numbers,	passwords,	user	IDs,	dates	of	birth or	Social	Security	numbers	--	was	compromised	during	the	attack.	The	Firm continues	to	vigilantly	monitor	the	situation.	In	addition,	as	of	the	October	2, 2014	announcement,	as	well	as	of	the	date	of	this	Annual	Report,	the	Firm	has not	seen	any	unusual	customer	fraud	related	to	this	incident.	The	Firm	is cooperating	with	government	agencies	in	connection	with	their	investigation	of the	incident.	The	Firm	also	notified	its	customers	that	they	were	not	liable	for unauthorized	transactions	in	their	accounts	attributable	to	this	attack	that	they promptly	alerted	the	Firm	about.

The	Firm	has	established,	and	continues	to	establish,	defenses	on	an	ongoing basis	to	mitigate	this	and	other	possible	future	attacks.	The	cyberattacks experienced	to	date	have	not	resulted	in	any	material	disruption	to	the	Firm's operations	or	had	a	material	adverse	effect	on	the	Firm's	results	of	operations. The	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	this	attack	and	other	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	with	the	appropriate	government	and	law enforcement	agencies	and	other	businesses,	including	the	Firm's	third-party service	providers,	to	continue	to	enhance	defenses	and	improve	resiliency	to cybersecurity	threats.

# 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,	technology	and	communications	outages, flooding,	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	2014	that	have	resulted	in	business interruptions,	such	as	severe	winter	weather	in	the	U.S.,	tropical	storms	in	the Philippines,	and	geopolitical	events	in	Brazil	and	Hong	Kong.

# 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	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,	as	well	as	potential	exposures	on	key	litigation	and transactional	matters.	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,	the	Firm's Conflicts	Office	examines	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	fines	or	sanctions	or	of	financial	damage	or	loss	due to	the	failure	to	comply	with	laws,	rules,	and	regulations.

Global	Compliance	Risk	Management's	("Compliance")	role	is	to	identify, measure,	monitor,	and	report	on	and	provide	oversight	regarding	compliance risks	arising	from	business	operations,	and	provide	guidance	on	how	the	Firm can	mitigate	these	risks.

While	each	line	of	business	is	accountable	for	managing	its	compliance	risk,	the Firm's	Compliance	teams	work	closely	with	the	Operating	Committee	and	senior management	to	provide	independent	review	and	oversight	of	the	lines	of	business operations,	with	a	focus	on	compliance	with	applicable	global,	regional	and	local laws	and	regulations.	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.	The	Firm	expects	such	regulatory	scrutiny will	continue.

Compliance	operates	independent	of	the	lines	of	business,	and	is	led	by	the	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	ongoing	dialog	and	reporting	between	the	lines	of business,	Regional	Chief	Compliance	Officers	and	the	CCO	regarding	significant compliance	and	regulatory	management	matters,	as	well	as	implementation	of	the Compliance	program	across	the	lines	of	business	and	Regions.

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	-	even	if	one	thinks	it	would help	the	Firm's	business.	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	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.

# FIDUCIARY	RISK	MANAGEMENT

Fiduciary	risk	is	the	risk	of	a	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.

Depending	on	the	fiduciary	activity	and	capacity	in	which	the	Firm	is	acting, federal	and	state	statutes	and	regulations,	and	common	law	require	the	Firm	to adhere	to	specific	duties	in	which	the	Firm	must	always	place	the	client's interests	above	its	own.

# Fiduciary	risk	governance

Fiduciary	Risk	Management	is	the	responsibility	of	the	relevant	LOB	risk	and/or other	governance	committees.	Senior	business,	legal,	risk	and	compliance managers,	who	have	particular	responsibility	for	fiduciary	matters,	work	with	the relevant	LOB	risk	committees	with	the	goal	of	ensuring	that	businesses	providing investment,	trusts	and	estates,	or	other	fiduciary	products	or	services	that	give	rise to	fiduciary	duties	to	clients	perform	at	the	appropriate	standard	relative	to	their fiduciary	relationship	with	a	client.	Each	LOB	and	its	respective	risk	and/or	other governance	committees	are	responsible	for	the	oversight	and	management	of	the fiduciary	risks	in	their	businesses.	Of	particular	focus	are	the	policies	and practices	that	address	a	business's	responsibilities	to	a	client,	including performance	and	service	requirements	and	expectations;	client	suitability determinations;	and	disclosure	obligations	and	communications.	In	this	way,	the relevant	LOB	risk	and/or	other	governance	committees	provide	oversight	of	the Firm's	efforts	to	monitor,	measure	and	control	the	performance	and	delivery	of the	products	or	services	to	clients	that	may	give	rise	to	such	fiduciary	duties,	as well	as	the	Firm's	fiduciary	responsibilities	with	respect	to	the	Firm's	employee benefit	plans.

The	Firmwide	Fiduciary	Risk	Committee	("FFRC")	is	a	forum	for	risk	matters related	to	the	Firm's	fiduciary	activities	and	oversees	the	firmwide	fiduciary	risk governance	framework.	It	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	Firmwide	Risk	Committee	and	any	other	committee	considered appropriate.

# REPUTATION	RISK	MANAGEMENT

Reputation	risk	is	the	risk	that	an	action,	transaction,	investment	or	event	will reduce	the	trust	that	clients,	shareholders,	employees	or	the	broader	public	has	in the	Firm's	integrity	or	competence.	Maintaining	the	Firm's	reputation	is	the responsibility	of	each	individual	employee	of	the	Firm.	The	Firm's	Reputation Risk	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	comprises	three	key	elements:	clear,	documented escalation	criteria	appropriate	to	the	business	footprint;	a	designated	primary discussion	forum	–	in	most	cases,	one	or	more	dedicated	reputation	risk committees;	and	a	list	of	designated	contacts.	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

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	under	regulatory requirements;

•Maintain	debt	ratings	that	enable	the	Firm	to	optimize	its	funding	mix	and liquidity	sources	while	minimizing	costs;

•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	other	stated objectives.

These	objectives	are	achieved	through	ongoing	monitoring	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.

# Capital	strategy	and	governance

The	Firm's	CEO,	in	conjunction	with	the	Board	and	its	subcommittees,	establish principles	and	guidelines	for	capital	planning,	capital	issuance,	usage	and distributions,	and	establish	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	Firm	has established	the	Capital	Governance	Committee	and	the	Regulatory	Capital Management	Office	("RCMO")	as	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 DRPC	assesses	the	Firm's	capital	adequacy	process	and	its	components.	This review	determines	the	effectiveness	of	the	capital	adequacy	process,	the appropriateness	of	the	risk	tolerance	levels,	and	the	strength	of	the	control infrastructure.	For	additional	discussion	on	the	DRPC,	see	Enterprise-wide	Risk Management	on	pages	105–109.

# Capital	disciplines

In	its	capital	management,	the	Firm	uses	three	primary	disciplines,	which	are further	described	below:

•Regulatory	capital

•Economic	capital

•Line	of	business	equity

The	Federal	Reserve	establishes	capital	requirements,	including	well-capitalized standards,	for	the	consolidated	financial	holding	company.	The	Office	of	the Comptroller	of	the	Currency	("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.

The	U.S.	capital	requirements	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,	for	U.S.	bank	holding	companies	and	banks,	revises,	among	other things,	the	definition	of	capital	and	introduces	a	new	common	equity	Tier	1 capital	("CET1	capital")	requirement;	presents	two	comprehensive methodologies	for	calculating	risk-weighted	assets	("RWA"),	a	general (Standardized)	approach,	which	replaces	Basel	I	RWA	("Basel	III	Standardized") and	an	advanced	approach,	which	replaces	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	January	1,	2014	and	continue	through	the	end	of	2018	("Transitional period")	as	described	below.	Both	Basel	III	Standardized	and	Basel	III	Advanced became	effective	commencing	January	1,	2014	for	large	and	internationally active	U.S.	bank	holding	companies	and	banks,	including	the	Firm	and	its insured	depository	institution	("IDI")	subsidiaries.

Prior	to	the	implementation	of	Basel	III	Advanced,	the	Firm	was	required	to complete	a	qualification	period	("parallel	run")	during	which	it	needed	to demonstrate	that	it	met	the	requirements	of	the	rule	to	the	satisfaction	of	its	U.S. banking	regulators.	On	February	21,	2014,	the	Federal	Reserve	and	the	OCC informed	the	Firm	and	its	national	bank	subsidiaries	that	they	had	satisfactorily completed	the	parallel	run	requirements	and	were	approved	to	calculate	capital under	Basel	III	Advanced,	in	addition	to	Basel	III	Standardized,	as	of	April	1, 2014.	In	conjunction	with	its	exit	from	the	parallel	run,	the	capital	adequacy	of the	Firm	and	its	national	bank	subsidiaries	is	evaluated	against	the	Basel	III approach	(Standardized	or	Advanced)	which	results,	for	each	quarter	beginning with	the	second	quarter	of	2014,	in	the	lower	ratio	(the	"Collins	Floor"),	as required	by	the	Collins	Amendment	of	the	Dodd-Frank	Act.

# Definition	of	capital

Basel	III	revises	Basel	I	and	II	by	narrowing	the	definition	of	capital	and increasing	the	capital	requirements	for	specific	exposures.	Under	Basel	III,	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	other	post-retirement	employee	benefit	("OPEB") plans),	less	certain	deductions	for	goodwill,	MSRs	and	deferred	tax	assets	that arise	from	net	operating	loss	("NOL")	and	tax	credit	carryforwards.	Tier	1	capital is	predominantly	comprised	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 revisions	to	CET1	capital,	Tier	1	capital	and	Tier	2	capital	are	subject	to	phase-in periods	that	began	January	1,	2014,	and	continue	through	the	end	of	2018,	and during	that	period,	CET1	capital,	Tier	1	capital	and	Tier	2	capital	represent	Basel III	Transitional	capital.

# Risk-weighted	assets

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.	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.

# Supplementary	leverage	ratio	("SLR")

Basel	III	also	includes	a	requirement	for	Advanced	Approach	banking organizations,	including	the	Firm,	to	calculate	a	SLR.	The	SLR,	a	non-GAAP financial	measure,	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	at	least	5%	and	IDI subsidiaries,	including	JPMorgan	Chase	Bank,	N.A.	and	Chase	Bank	USA,	N.A., to	have	a	minimum	SLR	of	at	least	6%,	both	beginning	January	1,	2018.

# Capital	ratios

The	basis	to	calculate	the	Firm's	capital	ratios	(both	risk-based	and	leverage)	under	Basel	III	during	the	transitional	period	and	when	fully	phased-in	are	shown	in	the	table below.

(a) Trust	preferred	securities	("TruPS")	are	being	phased	out	from	inclusion	in	Basel	III	capital	commencing	January	1,	2014,	continuing	through	the	end	of 2021.

(b) Defined	as	Basel	III	Standardized	Transitional	for	2014.	Beginning	January	1,	2015,	Basel	III	Standardized	RWA	is	calculated	under	the	Basel	III	definition	of	the	Standardized Approach.

(c) Adjusted	average	assets,	for	purposes	of	calculating	the	leverage	ratio	and	SLR,	includes	total	quarterly	average	assets	adjusted	for	unrealized	gains/(losses)	on	securities,	less	deductions	for	disallowed	goodwill	and	other	intangible	assets, investments	in	certain	subsidiaries,	and	the	total	adjusted	carrying	value	of	nonfinancial	equity	investments	that	are	subject	to	deductions	from	Tier	1	capital.

# Risk-based	capital	regulatory	minimums

The	Basel	III	rules	include	minimum	capital	ratio	requirements	that	are	also subject	to	phase-in	periods	through	January	1,	2019.

In	addition	to	the	regulatory	minimum	capital	requirements,	certain	banking organizations,	including	the	Firm,	will	be	required	to	hold	an	additional	2.5%	of CET1	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	will	be	phased-in	beginning	January 1,	2016.

Moreover,	G-SIBs	will	be	required	to	maintain,	in	addition	to	the	capital conservation	buffer,	further	amounts	of	capital	ranging	from	1%	to	2.5%	across all	tiers	of	regulatory	capital.	In	November	2014,	based	upon	data	as	of December	31,	2013,	the	Financial	Stability	Board	("FSB")	indicated	that	certain G-SIBs,	including	the	Firm,	would	be	required	to	hold	the	additional	2.5%	of capital;	the	requirement	will	be	phased-in	beginning	January	1,	2016.

The	Basel	Committee	has	stated	that	G-SIBs	could	in	the	future	be	required	to hold	3.5%	or	more	of	additional	capital	if	their	relative	systemic	importance	were to	increase.	Currently,	no	G-SIB	is	required	to	hold	more	than	the	additional	2.5% of	capital.

Consequently,	based	upon	the	final	rules	currently	in	effect,	the	minimum	Basel III	CET1	capital	ratio	requirement	for	the	Firm	is	expected	to	be	9.5%,	comprised of	the	minimum	ratio	of	4.5%	plus	the	2.5%	capital	conservation	buffer	and	the 2.5%	G-SIB	requirement	both	beginning	January	1,	2019.

Basel	III	also	establishes	a	minimum	6.5%	CET1	standard	for	the	definition	of "well	capitalized"	under	the	Prompt	Corrective	Action	("PCA")	requirements	of the	FDIC	Improvement	Act	("FDICIA").	The	CET1	standard	is	effective beginning	with	the	first	quarter	of	2015.

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.	It	is	the	Firm's	current	expectation	that	its	Basel	III	CET1	ratio	will	exceed	the	regulatory	minimums,	both	during	the	transition	period	and	upon	full implementation	in	2019	and	thereafter.

On	December	9,	2014,	the	Federal	Reserve	issued	a	Notice	of	Proposed Rulemaking	("NPR")	that	would	establish	a	new	capital	surcharge	across	all	tiers of	regulatory	capital	for	G-SIBs	in	the	U.S.,	including	the	Firm.	The	Firm estimates	its	fully	phased-in	G-SIB	surcharge	(based	upon	data	as	of	December 31,	2013)	would	be	4.5%	under	the	NPR,	compared	to	a	fully	phased-in	G-SIB surcharge	of	2.5%	as	estimated	under	the	Basel	III	rules	currently	in	effect.

# Basel	III	Advanced	Fully	Phased-In

Based	on	the	U.S.	capital	rules	currently	in	effect,	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,	and	the	Firm	will	continue	to	have	its	capital	adequacy	evaluated against	the	approach	that	results	in	the	lower	ratio.	While	the	Firm	has	recently imposed	Basel	III	Standardized	Fully	Phased-In	RWA	limits	on	the	lines	of business	in	adapting	its	capital	framework,	the	Firm	currently	expects	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 Advanced	Fully	Phased-In	(and	CET1	under	Basel	I	as	of	December	31,	2013), are	non-GAAP	financial	measures.	However,	such	measures	are	used	by	bank 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	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).

The	following	table	presents	the	estimated	Basel	III	Advanced	Fully	Phased-In Capital	ratios	for	JPMorgan	Chase	at	December	31,	2014.	Also	included	in	the table	are	the	regulatory	minimum	ratios	currently	expected	to	be	in	effect beginning	January	1,	2019.

|  | December	31,	2014 | Fully	phased-in<br>minimum	capital<br>ratios(a) | Fully	phased-in	well-<br>capitalized	ratios(b) |
| :--- | :--- | :--- | :--- |
| Risk-based\tcapital\nratios: |  |  |  |
| CET1\tcapital | 10.2% | 9.5% | 6.5% |
| Tier\t1\tcapital | 11.4 | 11.0 | 8.0 |
| Total\tcapital | 12.8 | 13.0 | 10.0 |
| Leverage\tratio: |  |  |  |
| Tier\t1 | 7.5 | 4.0 | 5.0 |
| SLR | 5.6 | 3.0 | 5.0 |

(a) Represents	the	minimum	capital	ratios	applicable	to	the	Firm	under	fully	phased-in	Basel	III rules	currently	in	effect.

(b) Represents	the	minimum	Basel	III	Fully	Phased-In	capital	ratios	applicable	to	the	Firm under	the	PCA	requirements	of	FDICIA.

A	reconciliation	of	total	stockholders'	equity	to	Basel	III	Advanced	Fully	Phased- In	CET1	capital,	Tier	1	capital	and	Total	qualifying	capital	is	presented	in	the table	below.

# Risk-based	capital	components	and	assets

(a) Goodwill	and	other	intangible	assets	are	net	of	any	associated	deferred	tax	liabilities.

# Capital	rollforward

The	following	table	presents	the	changes	in	CET1	capital,	Tier	1	capital	and	Tier 2	capital	for	the	year	ended	December	31,	2014.	Under	Basel	I	CET1	represents Tier	1	common	capital.

| Year	ended	December	31,	(in	millions) | 2014 |
| :--- | :--- |
| Basel\tI\tCET1\tcapital\tat\tDecember\t31,\t2013 | $148,887 |
| Effect\tof\trule\tchanges(a) | 2,315 |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tCET1\tcapital\tat\tDecember\t31,\t2013 | 151,202 |
| Net\tincome\tapplicable\tto\tcommon\tequity | 20,637 |
| Dividends\tdeclared\ton\tcommon\tstock | (6,078) |
| Net\tpurchases\tof\ttreasury\tstock | (3,009) |
| Changes\tin\tadditional\tpaid-in\tcapital | (558) |
| Changes\trelated\tto\tAOCI | 1,327 |
| Adjustment\trelated\tto\tFVA/DVA | 580 |
| Other | 751 |
| Increase\tin\tCET1\tcapital | 13,650 |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tCET1\tcapital\tat\tDecember\t31,\t2014 | $164,852 |
| Basel\tI\tTier\t1\tcapital\tat\tDecember\t31,\t2013 | $165,663 |
| Effect\tof\trule\tchanges(b) | (3,295) |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTier\t1\tcapital\tat\tDecember\t31,\t2013 | 162,368 |
| Change\tin\tCET1\tcapital | 13,650 |
| Net\tissuance\tof\tnoncumulative\tperpetual\tpreferred\tstock | 8,905 |
| Other | (13) |
| Increase\tin\tTier\t1\tcapital | 22,542 |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTier\t1\tcapital\tat\tDecember\t31,\t2014 | $184,910 |
| Basel\tI\tTier\t2\tcapital\tat\tDecember\t31,\t2013 | $33,623 |
| Effect\tof\trule\tchanges(c) | (11,644) |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTier\t2\tcapital\tat\tDecember\t31,\t2013 | 21,979 |
| Change\tin\tlong-term\tdebt\tand\tother\tinstruments\tqualifying\tas\tTier\t2 | 809 |
| Change\tin\tallowance\tfor\tcredit\tlosses | (1,063) |
| Other | (41) |
| Decrease\tin\tTier\t2\tcapital | (295) |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTier\t2\tcapital\tat\tDecember\t31,\t2014 | $21,684 |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTotal\tcapital\tat\tDecember\t31,\t2014 | $206,594 |

(a) Predominantly	represents:	(1)	the	addition	of	certain	exposures,	which	were	deducted	from capital	under	Basel	I,	that	are	risk-weighted	under	Basel	III;	(2)	adjustments	related	to	AOCI for	AFS	securities	and	defined	benefit	pension	and	OPEB	plans;	and	(3)	a	deduction	for deferred	tax	assets	related	to	NOL	carryforwards.

(b) Predominantly	represents	the	exclusion	of	TruPS	from	Tier	1	capital	under	Basel	III. (c) Predominantly	represents	a	change	in	the	calculation	of	qualifying	allowance	for	credit losses	under	Basel	III.

# RWA	rollforward

The	following	table	presents	changes	in	the	components	of	RWA	under	Basel	III Advanced	Fully	Phased-In	for	the	year	ended	December	31,	2014.	The	amounts in	the	rollforward	categories	are	estimates,	based	on	the	predominant	driver	of	the change.

|  |  | Year	ended	December	31,	(in	millions) | Year	ended	December	31,	(in	millions) |  |
| :--- | :--- | :--- | :--- | :--- |
| (in\tbillions) | Credit\trisk\nRWA | Market\trisk\nRWA | Operational\trisk\nRWA | Total\tRWA |
| Basel\tI\tRWA\tat\tDecember\t31,\n2013 | $1,223 | $165 | NA | $1,388 |
| Effect\tof\trule\tchanges(a) | (168) | (4) | 375 | 203 |
| Basel\tIII\tAdvanced\tFully |  |  |  |  |
| Phased-In\tRWA\tat |  |  |  |  |
| December\t31,\t2013 | 1,055 | 161 | 375 | 1,591 |
| Model\t&amp;\tdata\tchanges(b) | 56 | 36 | 25 | 117 |
| Portfolio\trunoff(c) | (22) | (22) | — | (44) |
| Movement\tin\tportfolio\tlevels(d) | (49) | 4 | — | (45) |
| Changes\tin\tRWA | (15) | 18 | 25 | 28 |
| Basel\tIII\tAdvanced\tFully |  |  |  |  |
| Phased-In\tRWA\tat |  |  |  |  |
| December\t31,\t2014 | $1,040 | $179 | $400 | $1,619 |

(a) Effect	of	rule	changes	refers	to	movements	in	levels	of	RWA	as	a	result	of	changing	to calculating	RWA	under	the	Basel	III	Advanced	Fully	Phased-In	rules.	See	Risk-weighted assets	on	page	147	for	additional	information	on	the	calculation	of	RWA	under	Basel	III. (b) 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).

(c) Portfolio	runoff	for	credit	risk	RWA	reflects	lower	loan	balances	in	Mortgage	Banking	and reduced	risk	from	position	rolloffs	in	legacy	portfolios,	and	for	market	risk	RWA	reflects reduced	risk	from	position	rolloffs	in	legacy	portfolios.

(d) 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.

# Basel	III	Transitional

Basel	III	Transitional	capital	requirements	became	effective	on	January	1,	2014, and	will	become	fully	phased-in	on	January	1,	2019.	The	following	table presents	a	reconciliation	of	the	Firm's	Basel	III	Advanced	Transitional	capital and	RWA	to	the	Firm's	estimated	Basel	III	Advanced	Fully	Phased-In	capital and	RWA	as	of	December	31,	2014.

| December	31,	2014<br>(in	millions) |  |
| :--- | :--- |
| Basel\tIII\tAdvanced\tTransitional\tCET1\tcapital | $164,764 |
| AOCI\tphase-in(a) | 2,249 |
| CET1\tcapital\tdeduction\tphased-in(b) | (1,212) |
| Intangibles\tdeduction\tphase-in(c) | (850) |
| Other\tadjustments\tto\tCET1\tcapital(d) | (99) |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tCET1\tcapital | $164,852 |
| Basel\tIII\tAdvanced\tTransitional\tAdditional\tTier\t1\tcapital | $21,868 |
| Non-qualifying\tinstruments\tphase-out | (2,670) |
| Tier\t1\tcapital\tdeduction\tphased-out(b) | 1,212 |
| Other\tadjustments\tto\tTier\t1\tcapital(d) | (352) |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tAdditional\tTier\t1\tcapital | $20,058 |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTier\t1\tcapital | $184,910 |
| Basel\tIII\tAdvanced\tTransitional\tTier\t2\tcapital | $24,390 |
| Non-qualifying\tinstruments\tphase-out | (2,670) |
| Other\tadjustments\tto\tTier\t2\tcapital(e) | (36) |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTier\t2\tcapital | $21,684 |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tTotal\tcapital | $206,594 |
| Basel\tIII\tAdvanced\tTransitional\tRWA | $1,608,240 |
| Adjustment\trelated\tto\tchange\tin\trisk-weighting (f) | 11,047 |
| Basel\tIII\tAdvanced\tFully\tPhased-In\tRWA | $1,619,287 |

(a) Includes	the	remaining	balance	of	AOCI	related	to	AFS	debt	securities	and	defined	benefit pension	and	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	DTA	related	to	net	operating loss	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.

(e) Includes	the	Firm's	investments	in	its	own	Tier	2	capital	instruments	and	unrealized	gains on	AFS	equity	securities.

(f) Primarily	relates	to	the	risk-weighting	of	items	not	subject	to	capital	deduction	thresholds including	MSRs.

The	following	table	presents	the	regulatory	capital	ratios	as	of	December	31 2014,	under	Basel	III	Standardized	Transitional	and	Basel	III	Advanced Transitional.	Also	included	in	the	table	are	the	regulatory	minimum	ratios	in effect	as	of	December	31,	2014.

|  | December	31,	2014<br>Basel	III<br>Standardized<br>Transitional | Basel	III<br>Advanced<br>Transitional | Minimum<br>capital<br>ratios(b) | Well-<br>capitalized<br>ratios(c) |
| :--- | :--- | :--- | :--- | :--- |
| Risk-based |  |  |  |  |
| capital |  |  |  |  |
| ratios(a): |  |  |  |  |
| CET1\tcapital | 11.2% | 10.2% | 4.0% | NA |
| Tier\t1\tcapital | 12.7 | 11.6 | 5.5 | 6.0% |
| Total\tcapital | 15.0 | 13.1 | 8.0 | 10.0 |
| Leverage\tratio: |  |  |  |  |
| Tier\t1\nleverage | 7.6 | 7.6 | 4.0 | 5.0 |

(a) For	each	of	the	risk-based	capital	ratios	the	lower	of	the	Standardized	Transitional	or	Advanced Transitional	ratio	represents	the	Collins	Floor.

(b) Represents	the	minimum	capital	ratios	for	2014	currently	applicable	to	the	Firm	under	Basel	III.

(c) Represents	the	minimum	capital	ratios	for	2014	currently	applicable	to	the	Firm	under	the	PCA requirements	of	the	FDICIA.

(d) The	CET1	capital	ratio	became	a	relevant	measure	of	capital	under	the	prompt	corrective	action requirements	on	January	1,	2015.

At	December	31,	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	and	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 consolidated	Pillar	3	Regulatory	Capital	Disclosures	reports,	which	are	available on	the	Firm's	website

(http://investor.shareholder.com/jpmorganchase/basel.cfm).

# Supplementary	leverage	ratio

The	Firm	estimates	that	if	the	U.S.	SLR	final	rule	were	in	effect	at	December	31, 2014,	the	Firm's	SLR	would	have	been	approximately	5.6%	and	JPMorgan Chase	Bank,	N.A.'s	and	Chase	Bank	USA,	N.A.'s	SLRs	would	have	been approximately	5.9%	and	8.1%,	respectively,	at	that	date.

Comprehensive	Capital	Analysis	and	Review	("CCAR")

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	BHC's	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	26,	2014,	the	Federal	Reserve	informed	the	Firm	that	it	did	not	object, on	either	a	quantitative	or	qualitative	basis,	to	the	Firm's	2014	capital	plan.	For information	on	actions	taken	by	the	Firm's	Board	of	Directors	following	the	2014 CCAR	results,	see	Capital	actions	on	page	154.

On	January	5,	2015,	the	Firm	submitted	its	2015	capital	plan	to	the	Federal Reserve	under	the	Federal	Reserve's	2015	CCAR	process.	The	Firm	expects	to receive	the	Federal	Reserve's	final	response	to	its	plan	no	later	than	March	31, 2015.

The	Firm's	CCAR	process	is	integrated	into	and	employs	the	same methodologies	utilized	in	the	Firm's	Internal	Capital	Adequacy	Assessment Process	("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.

# Minimum	Total	Loss	Absorbing	Capacity	("TLAC")

In	November	2014,	the	FSB,	in	consultation	with	the	Basel	Committee	on Banking	Supervision,	issued	a	consultative	document	proposing	that,	in	order	for G-SIBs	to	have	sufficient	loss	absorbing	and	recapitalization	capacity	to	support an	orderly	resolution,	they	would	be	required	to	have	outstanding	a	sufficient amount	and	type	of	debt	and	capital	instruments.	This	amount	and	type	of	debt and	capital	instruments	(or	"total	loss	absorbing	capacity"	or	TLAC)	is	intended to	effectively	absorb	losses,	as	necessary,	upon	a	failure	of	a	G-SIB,	without imposing	such	losses	on	taxpayers	of	the	relevant	jurisdiction	or	causing	severe systemic	disruptions,	and	thereby	ensuring	the	continuity	of	the	G-SIBs	critical functions.	The	document	identifies	specific	criteria	that	must	be	met	for instruments	to	be	considered	eligible	under	TLAC	and	sets	out	minimum requirements	that	include	existing	Basel	III	minimum	capital	requirements, excluding	capital	buffers.	The	FSB's	proposed	range	for	a	common	minimum TLAC	requirement	is	16-20%	of	the	financial	institution's	RWA	and	at	least twice	its	Basel	III	Tier	1	leverage	ratio.	The	Firm	estimated	that	it	has approximately	15%	minimum	TLAC	as	a	percentage	of

Basel	III	Advanced	Fully	Phased-in	RWA,	excluding	capital	buffers	currently	in effect,	at	year	end	2014	based	on	its	understanding	of	how	the	FSB	proposal	may be	implemented	in	the	United	States.	The	FSB	is	expected	to	revise	its	proposal following	a	period	of	public	consultation	and	findings	from	a	quantitative	impact study	and	market	survey	to	be	conducted	in	the	first	quarter	of	2015.	The	final proposal	is	expected	to	be	submitted	to	the	G-20	in	advance	of	the	G-20	Summit scheduled	for	fourth	quarter	of	2015.	U.S.	banking	regulators	are	expected	to issue	an	NPR	that	would	outline	TLAC	requirements	specific	to	U.S.	banks.

# Regulatory	capital	outlook

The	Firm	expects	to	continue	to	accrete	capital	in	the	near	term	and	believes	its current	capital	levels	enable	it	to	retain	market	access,	continue	its	strategy	to invest	in	and	grow	its	businesses	and	maintain	flexibility	to	distribute	excess capital.	The	Firm	intends	to	balance	return	of	capital	to	shareholders	with achieving	higher	capital	ratios	over	time.	Additionally,	the	Firm	expects	the capital	ratio	calculated	under	the	Basel	III	Standardized	Fully	Phased-In Approach	to	become	its	binding	constraint	by	the	end	of	2015,	or	slightly thereafter.	As	a	result,	the	Firm	expects	to	reach	Basel	III	Advanced	and Standardized	Fully	Phased-In	CET1	ratios	of	approximately	11%	by	the	end	of 2015	and	is	targeting	reaching	a	Basel	III	CET1	ratio	of	approximately	12%	by the	end	of	2018.

The	Firm's	capital	targets	take	into	consideration	the	current	U.S.	Basel	III requirements	and	contemplate	the	requirements	under	the	U.S.	G-SIB	proposal issued	on	December	9,	2014	and	therefore,	assume	a	4.5%	G-SIB	capital surcharge.	These	targets	are	subject	to	revision	in	the	future	as	a	result	of	changes that	may	be	introduced	by	banking	regulators	to	the	required	minimum	ratios	to which	the	Firm	is	subject.	In	particular,	if	the	Firm's	G-SIB	capital	surcharge	is determined	to	be	lower	than	4.5%,	the	capital	targets	would	be	adjusted accordingly.	The	Firm	intends	to	manage	its	capital	so	that	it	achieves	the required	capital	levels	and	composition	in	line	with	or	in	advance	of	the	required timetables	of	current	and	proposed	rules.

# Economic	risk	capital

Economic	risk	capital	is	another	of	the	disciplines	the	Firm	uses	to	assess	the capital	required	to	support	its	businesses.	Economic	risk	capital	is	a	measure	of the	capital	needed	to	cover	JPMorgan	Chase's	business	activities	in	the	event	of unexpected	losses.	The	Firm	measures	economic	risk	capital	using	internal	risk- assessment	methodologies	and	models	based	primarily	on	four	risk	factors: credit,	market,	operational	and	private	equity	risk	and	considers	factors, assumptions	and	inputs	that	differ	from	those	required	to	be	used	for	regulatory capital	requirements.	Accordingly,	economic	risk	capital	provides	a complementary	measure	to	regulatory	capital.	As	economic	risk	capital	is	a separate	component	of	the	capital	framework	for	Advanced	Approach	banking organizations	under	Basel	III,	the	Firm	continues	to	enhance	its	economic	risk capital	framework.

The	Firm's	framework	for	allocating	capital	to	its	business	segments	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

Equity	for	a	line	of	business	represents	the	amount	the	Firm	believes	the	business would	require	if	it	were	operating	independently,	considering	capital	levels	for similarly	rated	peers,	regulatory	capital	requirements	(as	estimated	under	Basel III	Advanced	Fully	Phased-In)	and	economic	risk	measures.	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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Consumer\t&amp;\tCommunity\tBanking | $51.0 | $46.0 | $43.0 |
| Corporate\t&amp;\tInvestment\tBank | 61.0 | 56.5 | 47.5 |
| Commercial\tBanking | 14.0 | 13.5 | 9.5 |
| Asset\tManagement | 9.0 | 9.0 | 7.0 |
| Corporate | 72.4 | 71.4 | 77.4 |
| Total\tcommon\tstockholders'\tequity | $207.4 | $196.4 | $184.4 |

Effective	January	1,	2013,	the	Firm	refined	the	capital	allocation	framework	to align	it	with	the	revised	line	of	business	structure	that	became	effective	in	the fourth	quarter	of	2012.	The	change	in	equity	levels	for	the	lines	of	businesses	was largely	driven	by	the	evolving	regulatory	requirements	and	higher	capital	targets the	Firm	had	established	under	the	Basel	III	Advanced	Approach.

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.

(a) Reflects	refined	capital	allocations	effective	January	1,	2015.

# 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.

The	Firm's	current	expectation	is	to	continue	to	target	a	payout	ratio	of approximately	30%	of	normalized	earnings	over	time.	Following	the	Federal Reserve's	non-objection	to	the	Firm's	2014	capital	plan,	the	Board	of	Directors increased	the	quarterly	common	stock	dividend	on	May	20,	2014,	from	$0.38	to $0.40	per	share,	effective	beginning	with	the	dividend	paid	on	July	31,	2014,	to stockholders	of	record	on	July	3,	2014.

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.

# Preferred	stock

During	the	year	ended	December	31,	2014,	the	Firm	issued	$8.9	billion	of noncumulative	preferred	stock.	Preferred	stock	dividends	declared	were	$1.1 billion	for	the	year	ended	December	31,	2014.	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	$1.3 billion	for	the	year	ended	December	31,	2014.	For	additional	information	on	the Firm's	preferred	stock,	see	Note	22.

# Redemption	of	outstanding	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.

# Common	equity

On	March	13,	2012,	the	Board	of	Directors	authorized	a	$15.0	billion	common equity	(i.e.,	common	stock	and	warrants)	repurchase	program.	As	of December	31,	2014,	$3.8	billion	(on	a	trade-date	basis)	of	authorized	repurchase capacity	remained	under	the	program.	The	amount	of	equity	that	may	be repurchased	by	the	Firm	is	also	subject	to	the	amount	that	is	set	forth	in	the Firm's	annual	capital	plan	submitted	to	the	Federal	Reserve	as	part	of	the	CCAR process.	In	conjunction	with	the	Federal	Reserve's	release	of	its	2014	CCAR results,	the	Firm's	Board	of	Directors	has	authorized	the	Firm	to	repurchase	$6.5 billion	of	common	equity	between	April	1,	2014,	and	March	31,	2015.	As	of December	31,	2014,	$2.1	billion	(on	a	trade-date	basis)	of	such	repurchase capacity	remains.	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,	2014,	2013	and	2012,	on	a	trade-date	basis.	There were	no	warrants	repurchased	during	the	years	ended	December	31,	2014,	and 2013.

| Year	ended	December	31,	(in	millions)<br>Total	number	of	shares	of	common	stock<br>repurchased | 2014<br>83.4 | 2013<br>96.1 | 2012<br>30.9 |
| :--- | :--- | :--- | :--- |
| Aggregate\tpurchase\tprice\tof\tcommon\tstock\nrepurchases | $4,834 | $4,789 | $1,329 |
| Total\tnumber\tof\twarrants\trepurchased | — | — | 18.5 |
| Aggregate\tpurchase\tprice\tof\twarrant\trepurchases | $— | $— | $238 |

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	utilizing	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	pages	18–19.

# Broker-dealer	regulatory	capital

JPMorgan	Chase's	principal	U.S.	broker-dealer	subsidiaries	are	J.P.	Morgan Securities	LLC	("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,	2014, JPMorgan	Securities'	net	capital,	as	defined	by	the	Net	Capital	Rule,	was	$12.8 billion,	exceeding	the	minimum	requirement	by	$10.6	billion,	and	JPMorgan Clearing's	net	capital	was	$7.5	billion,	exceeding	the	minimum	requirement	by $5.6	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, 2014,	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,	2014,	J.P.	Morgan	Securities	plc	had	estimated	total	capital	of $30.1	billion;	its	estimated	CET1	capital	ratio	was	10.7%	and	its	estimated	Total capital	ratio	was	14.1%.	Both	ratios	exceeded	the	minimum	transitional	standards (4.0%	and	8.0%	for	the	CET1	ratio	and	Total	capital	ratio,	respectively)	as established	by	the	Capital	Requirements	Directive	and	Regulation	(the	European Union	("EU")	implementation	of	Basel	III)	as	well	as	additional	minimum requirements	specified	by	the	Prudential	Regulatory	Authority	as	Individual Capital	Guidance	and	PRA	Buffer	requirements.

# LIQUIDITY	RISK	MANAGEMENT

Liquidity	risk	is	the	risk	that	the	Firm	will	be	unable	to	meet	its	contractual	and contingent	obligations.	Liquidity	risk	management	is	intended	to	ensure	that	the Firm	has	the	appropriate	amount,	composition	and	tenor	of	funding	and	liquidity in	support	of	its	assets.

# Liquidity	Risk	Oversight

The	Firm	has	an	independent	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	reporting	into	the	CIO, Treasury,	and	Corporate	("CTC")	Chief	Risk	Officer	("CRO").	The	CTC	CRO has	responsibility	for	firmwide	Liquidity	Risk	Oversight	and	reports	to	the	Firm's CRO.	Liquidity	Risk	Oversight's	responsibilities	include	but	are	not	limited	to:

•Establishing	and	monitoring	limits,	indicators,	and	thresholds,	including liquidity	appetite	tolerances;

•Defining	and	monitoring	internal	Firmwide	and	legal	entity	stress	tests	and regulatory	defined	stress	testing;

•Reporting	and	monitoring	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	lines	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	105–109.

# 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.	In	addition,	stress	scenarios	are produced	for	the	parent	holding	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, ensure	funding	mix	optimization,	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	holding	company	and	subsidiary	funding

The	parent	holding	company	acts	as	a	source	of	funding	to	its	subsidiaries.	The Firm's	liquidity	management	is	intended	to	maintain	liquidity	at	the	parent holding	company,	in	addition	to	funding	and	liquidity	raised	at	the	subsidiary operating	level,	at	levels	sufficient	to	fund	the	operations	of	the	parent	holding company	and	its	subsidiaries	for	an	extended	period	of	time	in	a	stress environment	where	access	to	normal	funding	sources	is	disrupted.	The	parent holding	company	currently	holds	more	than	18	months	of	pre-funding	assuming no	access	to	wholesale	funding	markets.

# LCR	and	NSFR

In	December	2010,	the	Basel	Committee	introduced	two	new	measures	of liquidity	risk:	the	liquidity	coverage	ratio	("LCR"),	which	is	intended	to	measure the	amount	of	"high-quality	liquid	assets"	("HQLA")	held	by	the	Firm	in	relation to	estimated	net	cash	outflows	within	a	30-day	period	during	an	acute	stress event;	and	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.	The	standards	require	that	the	LCR	be	no lower	than	100%	and	the	NSFR	be	greater	than	100%.

On	September	3,	2014,	the	U.S.	banking	regulators	approved	the	final	LCR	rule ("U.S.	LCR"),	which	became	effective	on	January	1,	2015.	Under	the	final	rules, the	LCR	is	required	to	be	80%	at	January	1,	2015,	increasing	by	10%	each	year until	reaching	100%	at	January	1,	2017.	At	December	31,	2014,	the	Firm	was compliant	with	the	fully	phased-in	U.S.	LCR	based	on	its	current	understanding of	the	final	rule.	The	Firm's	LCR	may	fluctuate	from	period-to-period	due	to normal	flows	from	client	activity.

On	October	31,	2014,	the	Basel	Committee	issued	the	final	standard	for	the NSFR	which	will	become	a	minimum	standard	by	January	1,	2018.	At	December 31,	2014,	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	a	proposal	on	the	NSFR	that	would	outline	requirements	specific	to	U.S. banks.

HQLA	is	the	estimated	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	rule.

As	of	December	31,	2014,	HQLA	was	estimated	to	be	approximately	$600 billion,	as	determined	under	the	U.S.	LCR	final	rule,	compared	with	$522	billion as	of	December	31,	2013,	which	was	calculated	using	the	Basel	Committee's definition	of	HQLA.	The	increase	in	HQLA	was	due	to	higher	cash	balances largely	driven	by	higher	deposit	balances,	partially	offset	by	the	impact	of	the application	of	the	U.S.	LCR	rule	which	excludes	certain	types	of	securities	that are	permitted	under	the	Basel	Rules.	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	U.S.	LCR broken	out	by	HQLA-eligible	cash	and	HQLA-eligible	securities	as	of December	31,	2014.

(a) Predominantly	cash	on	deposit	at	central	banks.

(b) Predominantly	includes	U.S.	agency	mortgage-backed	securities,	U.S.	Treasuries,	and sovereign	bonds.

In	addition	to	HQLA,	as	of	December	31,	2014,	the	Firm	has	approximately	$321 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,	2014,	the	Firm's	remaining	borrowing	capacity	at	various FHLBs	and	the	Federal	Reserve	Bank	discount	window	was	approximately	$143 billion.	This	borrowing	capacity	excludes	the	benefit	of	securities	included	above in	HQLA	or	other	unencumbered	securities	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	(aggregating	approximately	$757.3 billion	at	December	31,	2014),	is	funded	with	a	portion	of	the	Firm's	deposits (aggregating	approximately	$1,363.4	billion	at	December	31,	2014) 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.	Capital	markets secured	financing	assets	and	trading	assets	are	primarily	funded	by	the	Firm's capital	markets	secured	financing	liabilities,	trading	liabilities	and	a	portion	of	the Firm's	long-term	debt	and	stockholders'	equity.

In	addition	to	funding	capital	markets	assets,	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	disclosures	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,	2014,	the	Firm's	loans-to- deposits	ratio	was	56%,	compared	with	57%	at	December	31,	2013.

As	of	December	31,	2014,	total	deposits	for	the	Firm	were	$1,363.4	billion, compared	with	$1,287.8	billion	at	December	31,	2013	(58%	of	total	liabilities	at both	December	31,	2014	and	2013).	The	increase	was	due	to	growth	in	both wholesale	and	consumer	deposits.	For	further	information,	see	Balance	Sheet Analysis	on	pages	72–73.

The	Firm	typically	experiences	higher	customer	deposit	inflows	at	period-ends.	Therefore,	the	Firm	believes	average	deposit	balances	are	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,	2014	and	2013.

| Deposits |  |  | Year	ended	December	31, | Year	ended	December	31, |
| :--- | :--- | :--- | :--- | :--- |
| As\tof\tor\tfor\tthe\tperiod\tended\tDecember\t31, |  |  | Average | Average |
| (in\tmillions) | 2014 | 2013 | 2014 | 2013 |
| Consumer\t&amp;\tCommunity\tBanking | $502,520 | $464,412 | $486,919 | $453,304 |
| Corporate\t&amp;\tInvestment\tBank | 468,423 | 446,237 | 417,517 | 384,289 |
| Commercial\tBanking | 213,682 | 206,127 | 190,425 | 184,409 |
| Asset\tManagement | 155,247 | 146,183 | 150,121 | 139,707 |
| Corporate | 23,555 | 24,806 | 19,319 | 27,433 |
| Total\tFirm | $1,363,427 | $1,287,765 | $1,264,301 | $1,189,142 |

A	significant	portion	of	the	Firm's	deposits	are	consumer	deposits	(37%	and	36%	at	December	31,	2014	and	2013,	respectively),	which	are	considered	particularly	stable as	they	are	less	sensitive	to	interest	rate	changes	or	market	volatility.	Additionally,	the	majority	of	the	Firm's	institutional	deposits	are	also	considered	to	be	stable	sources of	funding	since	they	are	generated	from	customers	that	maintain	operating	service	relationships	with	the	Firm.	For	further	discussions	of	deposit	and	liability	balance trends,	see	the	discussion	of	the	results	for	the	Firm's	business	segments	and	the	Balance	Sheet	Analysis	on	pages	79–104	and	pages	72–73,	respectively.

The	following	table	summarizes	short-term	and	long-term	funding,	excluding	deposits,	as	of	December	31,	2014	and	2013,	and	average	balances	for	the	years	ended December	31,	2014	and	2013.	For	additional	information,	see	the	Balance	Sheet	Analysis	on	pages	72–73	and	Note	21.

| As	of	or	for	the	year	ended	December	31, |  |  | Average | Average |
| :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | 2014 | 2013 | 2014 | 2013 |
| Commercial\tpaper: |  |  |  |  |
| Wholesale\tfunding | $24,052 | $17,249 | $19,442 | $17,785 |
| Client\tcash\tmanagement | 42,292 | 40,599 | 40,474 | 35,932 |
| Total\tcommercial\tpaper | $66,344 | $57,848 | $59,916 | $53,717 |
| Obligations\tof\tFirm-administered\tmulti-seller\tconduits(a) | $12,047 | $14,892 | $10,427 | $15,504 |
| Other\tborrowed\tfunds | $30,222 | $27,994 | $31,721 | $30,449 |
| Securities\tloaned\tor\tsold\tunder\tagreements\tto\trepurchase: |  |  |  |  |
| Securities\tsold\tunder\tagreements\tto\trepurchase | $167,077 | $155,808 | $181,186 | $207,106 |
| Securities\tloaned | 21,798 | 19,509 | 22,586 | 26,068 |
| Total\tsecurities\tloaned\tor\tsold\tunder\tagreements\tto\trepurchase(b)(c)(d) | $188,875 | $175,317 | $203,772 | $233,174 |
| Total\tsenior\tnotes | $142,480 | $135,754 | $139,707 | $137,662 |
| Trust\tpreferred\tsecurities | 5,496 | 5,445 | 5,471 | 7,178 |
| Subordinated\tdebt | 29,472 | 29,578 | 29,082 | 27,955 |
| Structured\tnotes | 30,021 | 28,603 | 30,311 | 29,517 |
| Total\tlong-term\tunsecured\tfunding | $207,469 | $199,380 | $204,571 | $202,312 |
| Credit\tcard\tsecuritization | $31,239 | $26,580 | $28,935 | $27,834 |
| Other\tsecuritizations(e) | 2,008 | 3,253 | 2,734 | 3,501 |
| FHLB\tadvances | 64,994 | 61,876 | 60,667 | 55,487 |
| Other\tlong-term\tsecured\tfunding(f) | 4,373 | 6,633 | 5,031 | 6,284 |
| Total\tlong-term\tsecured\tfunding | $102,614 | $98,342 | $97,367 | $93,106 |
| Preferred\tstock(g) | $20,063 | $11,158 | 17,018 | $10,960 |
| Common\tstockholders'\tequity(g) | $212,002 | $200,020 | 207,400 | $196,409 |

(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	$2.7	billion	and	$4.6	billion	as	of	December	31,	2014	and	2013,	respectively,	and	average	balance	of	 $4.2	billion	for	the	years	ended December	31,	2014	and	2013.

(d) Excluded	long-term	securities	loaned	of	$483	million	as	of	December	31,	2013,	and	average	balance	of	 $24	million	and	$414	million	for	the	years	ended	December	31,	2014	and	2013,	respectively. There	were	no	long-term	securities	loaned	as	of	December	31,	2014.

(e) 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.

(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	146–155,	Consolidated	statements	of	changes	in	stockholders'	equity,	Note	22 and	Note	23.

# Short-term	funding

A	significant	portion	of	the	Firm's	total	commercial	paper	liabilities, approximately	64%	as	of	December	31,	2014,	were	not	sourced	from	wholesale funding	markets,	but	were	originated	from	deposits	that	customers	choose	to sweep	into	commercial	paper	liabilities	as	a	cash	management	program	offered	to customers	of	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,	agency	debt	and	agency	MBS,	and constitute	a	significant	portion	of	the	federal	funds	purchased	and	securities loaned	or	sold	under	purchase	agreements.	The	amounts	of	securities	loaned	or sold	under	agreements	to	repurchase	at	December	31,	2014,	increased predominantly	due	to	a	change	in	the	mix	of	the	Firm's	funding	sources.	The decrease	in	average	balances	for	the	year	ended	December	31,	2014,	compared with	December	31,	2013,	was	predominantly	due	to	less	secured	financing	of	the Firm's	investment	securities	portfolio,	and	a	change	in	the	mix	of	the	Firm's funding	sources.	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	pre-funding	at the	parent	holding	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	holding	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,	2014	and	2013.	For	additional	information,	see	Note	21.

# Long-term	unsecured	funding

| (in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Issuance |  |  |
| Senior\tnotes\tissued\tin\tthe\tU.S.\tmarket | $16,373 | $19,835 |
| Senior\tnotes\tissued\tin\tnon-U.S.\tmarkets | 11,221 | 8,843 |
| Total\tsenior\tnotes | 27,594 | 28,678 |
| Subordinated\tdebt | 4,979 | 3,232 |
| Structured\tnotes | 19,806 | 16,979 |
| Total\tlong-term\tunsecured\tfunding\t–\tissuance | $52,379 | $48,889 |
| Maturities/redemptions |  |  |
| Total\tsenior\tnotes | $21,169 | $18,418 |
| Trust\tpreferred\tsecurities | — | 5,052 |
| Subordinated\tdebt | 4,487 | 2,418 |
| Structured\tnotes | 18,554 | 17,785 |
| Total\tlong-term\tunsecured\tfunding\t–\nmaturities/redemptions | $44,210 | $43,673 |

The	Firm	raises	secured	long-term	funding	through	securitization	of	consumer credit	card	loans	and	advances	from	the	FHLBs.	It	may	also	in	the	future	raise long-term	funding	through	securitization	of	residential	mortgages,	auto	loans	and student	loans,	which	will	increase	funding	and	investor	diversity.

The	following	table	summarizes	the	securitization	issuance	and	FHLB	advances and	their	respective	maturities	or	redemption	for	the	years	ended	December	31, 2014	and	2013.

# Long-term	secured	funding

(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	74,	and	Credit	risk, liquidity	risk	and	credit-related	contingent	features	in Note	6.

The	credit	ratings	of	the	parent	holding	company	and	the	Firm's	principal	bank	and	nonbank	subsidiaries	as	of	December	31,	2014,	were	as	follows.

Downgrades	of	the	Firm's	long-term	ratings	by	one	or	two	notches	could	result	in a	downgrade	of	the	Firm's	short-term	ratings.	If	this	were	to	occur,	the	Firm believes	its	cost	of	funds	could	increase	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	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,	rating	uplift	assumptions	surrounding government	support,	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.

On	September	18,	2014,	S&P	revised	its	ratings	methodology	for	hybrid	capital securities	issued	by	financial	institutions,	and	on	September	29,	2014,	the	ratings of	the	Firm's	hybrid	capital	securities	(including	trust	preferred	securities	and preferred	stock)	were	lowered	by	1	notch	from	BBB	to	BBB-,	reflecting	the	new methodology.	Furthermore,	S&P	has	announced	a	Request	for	Comment	on	a proposed	change	to	rating	criteria	related	to	additional	loss	absorbing	capacity.	In addition,	Moody's	and	Fitch	are	in	the	process	of	reviewing	their	ratings methodologies:	Moody's	has	announced	a	Request	for	Comment	on	the	revision to	its	Bank	Rating	Methodology	and	Fitch	has	announced	a	review	of	the	ratings differential	that	it	applies	between	bank	holding	companies	and	their	bank subsidiaries.

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	consumer	and	wholesale	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	requires	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	uses	a	risk	rating	system	to	determine	the	credit	quality	of	its	wholesale loans	and	lending-related	commitments.	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. Emphasizing	one	factor	over	another	or	considering	additional	factors	could affect	the	risk	rating	assigned	by	the	Firm	to	that	loan.

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	loans	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	loan	characteristics	between	the	Firm's	specific	loan	portfolio 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,	depending	on	the	portfolio.	Changes	in	economic	conditions	or	in	the Firm's	assumptions	could	affect	its	estimate	of	probable	credit	losses	inherent	in the	portfolio	at	the	balance	sheet	date.	For	example,	changes	in	the	inputs	below would	have	the	following	effects	on	the	Firm's	modeled	loss	estimates	as	of December	31,	2014,	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	from	current	levels	could	imply	an	increase	to	modeled	credit loss	estimates	of	approximately	$1.2	billion.

•For	the	residential	real	estate	portfolio,	excluding	PCI	loans,	a	combined	5% decline	in	housing	prices	and	a	1%	increase	in	unemployment	from	current levels	could

imply	an	increase	to	modeled	annual	loss	estimates	of	approximately	$100 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.

•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	$1.8	billion.

•A	100	basis	point	increase	in	estimated	loss	given	default	for	the	Firm's	entire wholesale	loan	portfolio	could	imply	an	increase	in	the	Firm's	modeled	loss estimates	of	approximately	$140	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	loans	and	credit	card	loss	estimates,	management believes	that	its	current	estimate	of	the	allowance	for	credit	loss	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,	2014<br>(in	billions,	except	ratio	data) | Total	assets	at	fair<br>value | Total	level	3	assets |
| :--- | :--- | :--- |
| Trading\tdebt\tand\tequity\tinstruments | $320.0 | $22.5 |
| Derivative\treceivables | 79.0 | 12.6 |
| Trading\tassets | 399.0 | 35.1 |
| AFS\tsecurities | 298.8 | 1.0 |
| Loans | 2.6 | 2.5 |
| MSRs | 7.4 | 7.4 |
| Private\tequity\tinvestments(a) | 5.7 | 2.5 |
| Other | 36.2 | 2.4 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\nrecurring\tbasis | 749.7 | 50.9 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\nnonrecurring\tbasis | 4.5 | 3.2 |
| Total\tassets\tmeasured\tat\tfair\tvalue | $754.2 | $54.1 |
| Total\tFirm\tassets | $2,573.1 |  |
| Level\t3\tassets\tas\ta\tpercentage\tof\ttotal\tFirm\nassets |  | 2.1% |
| Level\t3\tassets\tas\ta\tpercentage\tof\ttotal\tFirm\nassets\tat\tfair\tvalue |  | 7.2% |

(a) 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.

During	2014,	the	Firm	recognized	an	impairment	of	the	Private	Equity	business' goodwill	totaling	$276	million.	Remaining	goodwill	of	$101	million	at 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.

Based	upon	the	updated	valuations	for	all	of	its	reporting	units,	the	Firm concluded	that	the	goodwill	allocated	to	its	other	reporting	units	was	not	impaired at	December	31,	2014.	The	fair	values	of	these	reporting	units	exceeded	their carrying	values.	Except	for	the	Firm's	mortgage	banking	business,	the	excess	fair value	as	a	percentage	of	carrying	value	ranged	from	approximately	20-210%	for the	other	reporting	units	and	did	not	indicate	a	significant	risk	of	goodwill impairment	based	on	current	projections	and	valuations.	The	fair	value	of	the Firm's	Mortgage	Banking	business	exceeded	its	carrying	value	by	less	than	5% and	accordingly,	the	associated	goodwill	of	approximately	$2	billion	remains	at an	elevated	risk	for	goodwill	impairment.

The	projections	for	all	of	the	Firm's	reporting	units	are	consistent	with	the	short- term	assumptions	discussed	in	the	Business	outlook	on	pages	66–67,	and	in	the longer	term,	incorporate	a	set	of	macroeconomic	assumptions	and	the	Firm's	best estimates	of	long-term	growth	and	returns	of	its	businesses.	Where	possible,	the Firm	uses	third-party	and	peer	data	to	benchmark	its	assumptions	and	estimates.

Deterioration	in	economic	market	conditions,	increased	estimates	of	the	effects	of recent	regulatory	or	legislative	changes,	or	additional	regulatory	or	legislative changes	may	result	in	declines	in	projected	business	performance	beyond management's	current	expectations.	For	example,	in	the	Firm's	Mortgage Banking	business,	such	declines	could	result	from	increases	in	primary	mortgage interest	rates,	lower	mortgage	origination	volume,	higher	costs	to	resolve foreclosure-related	matters	or	from	deterioration	in	economic	conditions, including	decreases	in	home	prices	that	result	in	increased	credit	losses.	Declines in	business	performance,	increases	in	equity	capital	requirements,	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	NOLs.	The	Firm	performs	regular	reviews	to	ascertain whether	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,	2014, 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	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

# Amendments	to	the	consolidation	analysis

In	February	2015,	the	Financial	Accounting	Standards	Board	("FASB")	issued guidance	regarding	consolidation	of	legal	entities	such	as	limited	partnerships, limited	liability	corporations,	and	securitization	structures.	The	guidance eliminates	the	deferral	issued	by	the	FASB	in	February	2010	of	the	accounting guidance	for	VIEs	for	certain	investment	funds,	including	mutual	funds,	private equity	funds	and	hedge	funds.	In	addition,	the	guidance	amends	the	evaluation	of fees	paid	to	a	decision	maker	or	a	service	provider,	and	exempts	certain	money market	funds	from	consolidation.	The	guidance	will	be	effective	in	the	first quarter	of	2016	with	early	adoption	permitted.	The	Firm	is	currently	evaluating the	potential	impact	on	the	Consolidated	Financial	Statements.

# Reclassification	of	residential	real	estate	collateralized	consumer	mortgage loans	upon	foreclosure	and	classification	of	certain	government-guaranteed mortgage	loans	upon	foreclosure

In	January	2014,	the	FASB	issued	guidance	which	clarified	the	timing	of	when	a creditor	is	considered	to	have	taken	physical	possession	of	residential	real	estate collateral	for	a	consumer	mortgage	loan,	resulting	in	the	reclassification	of	the loan	receivable	to	real	estate	owned.	The	final	standard	also	requires	disclosure	of outstanding	foreclosed	residential	real	estate	and	the	amount	of	the	recorded investment	in	residential	real	estate	mortgage	loans	in	the	process	of	foreclosure. In	August	2014,	the	FASB	issued	separate	guidance	clarifying	the	classification and	measurement	of	certain	foreclosed	government-guaranteed	mortgage	loans. Under	the	final	standard,	certain	foreclosed	government-insured	mortgage	loan amounts	were	reclassified	on	the	balance	sheet	as	a	receivable	from	the	guarantor at	the	guaranteed	amount.	The	Firm	early	adopted	both	of	these	new	standards	in the	third	quarter	of	2014	with	a	cumulative-effect	adjustment	as	of	January	1, 2014;	the	adoption	of	these	standards	(and	related	reclassification	adjustment) had	no	material	impact	on	the	Firm's	Consolidated	Financial	Statements.

# Measuring	the	financial	assets	and	financial	liabilities	of	a	consolidated collateralized	financing	entity

In	August	2014,	the	FASB	issued	guidance	to	address	diversity	in	the	accounting for	differences	in	the	measurement	of	the	fair	values	of	financial	assets	and liabilities	of	consolidated	financing	VIEs.	The	new	guidance	provides	an alternative	for	consolidated	financing	VIEs	to	elect:	(1)	to	measure	their	financial assets	and	liabilities	separately	under	existing	U.S.	GAAP	for	fair	value measurement	with	any	differences	in	such	fair	values	reflected	in	earnings;	or	(2) to	measure	both	their	financial	assets	and	liabilities	using	the	more	observable	of the	fair	value	of	the	financial	assets	or	the	fair	value	of	the	financial	liabilities. The	guidance	will	become	effective	in	the	first	quarter	of	2016,	with	early adoption	permitted.	The

adoption	of	this	guidance	is	not	expected	to	have	a	material	impact	on	the	Firm's Consolidated	Financial	Statements.

# Repurchase	agreements	and	similar	transactions

In	June	2014,	the	FASB	issued	guidance	that	amends	the	accounting	for	certain secured	financing	transactions,	and	requires	enhanced	disclosures	with	respect	to transactions	recognized	as	sales	in	which	exposure	to	the	derecognized	asset	is retained	through	a	separate	agreement	with	the	counterparty.	In	addition,	the guidance	requires	enhanced	disclosures	with	respect	to	the	types	and	quality	of financial	assets	pledged	in	secured	financing	transactions.	The	guidance	will become	effective	in	the	first	quarter	of	2015,	except	for	the	disclosures	regarding the	types	and	quality	of	financial	assets	pledged,	which	will	become	effective	in the	second	quarter	of	2015.	The	adoption	of	this	guidance	is	not	expected	to	have a	material	impact	on	the	Firm's	Consolidated	Financial	Statements.

# Revenue	recognition	–	revenue	from	contracts	with	customers

In	May	2014,	the	FASB	issued	revenue	recognition	guidance	that	is	intended	to create	greater	consistency	with	respect	to	how	and	when	revenue	from	contracts with	customers	is	shown	in	the	statements	of	income.	The	guidance	requires	that revenue	from	contracts	with	customers	be	recognized	upon	delivery	of	a	good	or service	based	on	the	amount	of	consideration	expected	to	be	received,	and requires	additional	disclosures	about	revenue.	The	guidance	will	be	effective	in the	first	quarter	of	2017	and	early	adoption	is	prohibited.	The	Firm	is	currently evaluating	the	potential	impact	on	the	Consolidated	Financial	Statements.

# Reporting	discontinued	operations	and	disclosures	of	disposals	of components	of	an	entity

In	April	2014,	the	FASB	issued	guidance	regarding	the	reporting	of	discontinued operations.	The	guidance	changes	the	criteria	for	determining	whether	a disposition	qualifies	for	discontinued	operations	presentation.	It	also	requires enhanced	disclosures	about	discontinued	operations	and	significant	dispositions that	do	not	qualify	to	be	presented	as	discontinued	operations.	The	guidance	will become	effective	in	the	first	quarter	of	2015.	The	adoption	of	this	guidance	is	not expected	to	have	a	material	impact	on	the	Firm's	Consolidated	Financial Statements.

# Investments	in	qualified	affordable	housing	projects

In	January	2014,	the	FASB	issued	guidance	regarding	the	accounting	for investments	in	affordable	housing	projects	that	qualify	for	the	low-income housing	tax	credit.	The	guidance	replaces	the	effective	yield	method	and	allows companies	to	make	an	accounting	policy	election	to	amortize	the	initial	cost	of	its investments	in	proportion	to	the	tax	credits	and	other	benefits	received	if	certain criteria	are	met,	and	to	present	the	amortization	as	a	component	of	income	tax expense.	The	guidance	will	become	effective	in	the	first	quarter	of	2015	and	is required	to	be	applied	retrospectively,	such	that	the	Firm's	results	of	operations for	prior	periods	will	be	revised	to	reflect	the	guidance.

The	Firm	intends	to	adopt	the	guidance	for	all	qualifying	investments.	The adoption	of	this	guidance	is	estimated	to	reduce	retained	earnings	by approximately	$230	million.	The	Firm	expects	that	reported	other	income	and income	tax	expense	will	each	increase	as	a	result	of	presenting	the	amortization	of the	initial	cost	of	its	investments	as	component	of	income	tax	expense.	The amount	of	this	increase	in	each	period	depends	on	the	size	and	characteristics	of the	Firm's	portfolio	of	affordable	housing	investments;	the	estimated	increase	for 2014	is	approximately	$900	million.	The	effect	of	this	guidance	on	the	Firm's	net income	is	not	expected	to	be	material.

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,	2014.

| (in	millions) | Asset	position | Liability	position |
| :--- | :--- | :--- |
| Net\tfair\tvalue\tof\tcontracts\toutstanding\tat\tJanuary\t1,\t2014 | $8,128 | $9,929 |
| Effect\tof\tlegally\tenforceable\tmaster\tnetting\tagreements | 15,082 | 15,318 |
| Gross\tfair\tvalue\tof\tcontracts\toutstanding\tat\tJanuary\t1,\t2014 | 23,210 | 25,247 |
| Contracts\trealized\tor\totherwise\tsettled | (14,451) | (15,557) |
| Fair\tvalue\tof\tnew\tcontracts | 13,954 | 15,664 |
| Changes\tin\tfair\tvalues\tattributable\tto\tchanges\tin\tvaluation\ttechniques\tand\nassumptions | — | — |
| Other\tchanges\tin\tfair\tvalue | 1,440 | 1,783 |
| Gross\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2014 | 24,153 | 27,137 |
| Effect\tof\tlegally\tenforceable\tmaster\tnetting\tagreements | (14,327) | (13,211) |
| Net\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2014 | $9,826 | $13,926 |

The	following	table	indicates	the	maturities	of	nonexchange-traded	commodity derivative	contracts	at	December	31,	2014.

| December	31,	2014	(in	millions) | Asset	position | Liability	position |
| :--- | :--- | :--- |
| Maturity\tless\tthan\t1\tyear | $15,635 | $16,376 |
| Maturity\t1–3\tyears | 6,561 | 8,459 |
| Maturity\t4–5\tyears | 1,230 | 1,790 |
| Maturity\tin\texcess\tof\t5\tyears | 727 | 512 |
| Gross\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2014 | 24,153 | 27,137 |
| Effect\tof\tlegally\tenforceable\tmaster\tnetting\tagreements | (14,327) | (13,211) |
| Net\tfair\tvalue\tof\tcontracts\toutstanding\tat\tDecember\t31,\t2014 | $9,826 | $13,926 |

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	international	business,	economic	and	political	conditions and	geopolitical	events;

•Changes	in	laws	and	regulatory 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 consumer	businesses;

•Acceptance	of	the	Firm's	new	and	existing	products	and	services	by	the marketplace	and	the	ability	of	the	Firm	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;

•Ability	of	the	Firm	to	maintain	the	security	of	its	financial,	accounting, technology,	data	processing	and	other	operating	systems	and	facilities;

•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, 2014.

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,	2014.	In	making	the	assessment,	management	used the	framework	in	"Internal	Control	-	Integrated	Framework	(2013)"	promulgated by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission, commonly	referred	to	as	the	"COSO"	criteria.

Based	upon	the	assessment	performed,	management	concluded	that	as	of December	31,	2014,	JPMorgan	Chase's	internal	control	over	financial	reporting was	effective	based	upon	the	COSO	2013	criteria.	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, 2014.

The	effectiveness	of	the	Firm's	internal	control	over	financial	reporting	as	of December	31,	2014,	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,	2014	and	2013	and	the	results	of	their	operations	and	their	cash flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2014	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,	2014	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

The	Notes	to	Consolidated	Financial	Statements	are	an	integral	part	of	these	statements.

# Consolidated	statements	of	comprehensive	income

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Net\tincome | $21,762 | $17,923 | $21,284 |
| Other\tcomprehensive\tincome/(loss),\tafter–tax |  |  |  |
| Unrealized\tgains/(losses)\ton\tinvestment\tsecurities | 1,975 | (4,070) | 3,303 |
| Translation\tadjustments,\tnet\tof\thedges | (11) | (41) | (69) |
| Cash\tflow\thedges | 44 | (259) | 69 |
| Defined\tbenefit\tpension\tand\tOPEB\tplans | (1,018) | 1,467 | (145) |
| Total\tother\tcomprehensive\tincome/(loss),\tafter–tax | 990 | (2,903) | 3,158 |
| Comprehensive\tincome | $22,752 | $15,020 | $24,442 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  | 173 |

# Consolidated	balance	sheets

| December	31,	(in	millions,	except	share	data) | 2014 | 2013 |
| :--- | :--- | :--- |
| Assets |  |  |
| Cash\tand\tdue\tfrom\tbanks | $27,831 | $39,771 |
| Deposits\twith\tbanks | 484,477 | 316,051 |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements\t(included\t $28,585\tand\t$25,135\tat\tfair\tvalue) | 215,803 | 248,116 |
| Securities\tborrowed\t(included\t$992\tand\t$3,739\tat\tfair\tvalue) | 110,435 | 111,465 |
| Trading\tassets\t(included\tassets\tpledged\tof\t $125,034\tand\t$116,499) | 398,988 | 374,664 |
| Securities\t(included\t$298,752\tand\t$329,977\tat\tfair\tvalue\tand\tassets\tpledged\tof\t $24,912\tand\t$23,446) | 348,004 | 354,003 |
| Loans\t(included\t$2,611\tand\t$2,011\tat\tfair\tvalue) | 757,336 | 738,418 |
| Allowance\tfor\tloan\tlosses | (14,185) | (16,264) |
| Loans,\tnet\tof\tallowance\tfor\tloan\tlosses | 743,151 | 722,154 |
| Accrued\tinterest\tand\taccounts\treceivable | 70,079 | 65,160 |
| Premises\tand\tequipment | 15,133 | 14,891 |
| Goodwill | 47,647 | 48,081 |
| Mortgage\tservicing\trights | 7,436 | 9,614 |
| Other\tintangible\tassets | 1,192 | 1,618 |
| Other\tassets\t(included\t$12,366\tand\t$15,187\tat\tfair\tvalue\tand\tassets\tpledged\tof\t $1,396\tand\t$2,066) | 102,950 | 110,101 |
| Total\tassets(a) | $2,573,126 | $2,415,689 |
| Liabilities |  |  |
| Deposits\t(included\t$8,807\tand\t$6,624\tat\tfair\tvalue) | $1,363,427 | $1,287,765 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements\t(included\t $2,979\tand\t$5,426\tat\tfair\tvalue) | 192,101 | 181,163 |
| Commercial\tpaper | 66,344 | 57,848 |
| Other\tborrowed\tfunds\t(included\t$14,739\tand\t$13,306\tat\tfair\tvalue) | 30,222 | 27,994 |
| Trading\tliabilities | 152,815 | 137,744 |
| Accounts\tpayable\tand\tother\tliabilities\t(included\t $36\tand\t$25\tat\tfair\tvalue) | 206,954 | 194,491 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tvariable\tinterest\tentities\t(included\t $2,162\tand\t$1,996\tat\tfair\tvalue) | 52,362 | 49,617 |
| Long-term\tdebt\t(included\t$30,226\tand\t$28,878\tat\tfair\tvalue) | 276,836 | 267,889 |
| Total\tliabilities(a) | 2,341,061 | 2,204,511 |
| Commitments\tand\tcontingencies\t(see\tNotes\t29,\t30\tand\t31) |  |  |
| Stockholders'\tequity |  |  |
| Preferred\tstock\t($1\tpar\tvalue;\tauthorized\t200,000,000\tshares:\tissued\t2,006,250\tand\t1,115,750\tshares) | 20,063 | 11,158 |
| 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 | 93,270 | 93,828 |
| Retained\tearnings | 130,315 | 115,756 |
| Accumulated\tother\tcomprehensive\tincome | 2,189 | 1,199 |
| Shares\theld\tin\tRSU\ttrust,\tat\tcost\t(472,953\tand\t476,642\tshares) | (21) | (21) |
| Treasury\tstock,\tat\tcost\t(390,144,630\tand\t348,825,583\tshares) | (17,856) | (14,847) |
| Total\tstockholders'\tequity | 232,065 | 211,178 |
| Total\tliabilities\tand\tstockholders'\tequity | $2,573,126 | $2,415,689 |

(a) The	following	table	presents	information	on	assets	and	liabilities	related	to	VIEs	that	are	consolidated	by	the	Firm	at	December	31,	2014	and	2013.	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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Assets |  |  |
| Trading\tassets | $9,090 | $6,366 |
| Loans | 68,880 | 70,072 |
| All\tother\tassets | 1,815 | 2,168 |
| Total\tassets | $79,785 | $78,606 |
| Liabilities |  |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\tvariable\tinterest\tentities | $52,362 | $49,617 |
| All\tother\tliabilities | 949 | 1,061 |
| Total\tliabilities | $53,311 | $50,678 |

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	December	31,	2014	 and	2013,	the	Firm	provided limited	program-wide	credit	enhancement	of	$2.0	billion	and	$2.6	billion,	respectively,	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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Preferred\tstock |  |  |  |
| Balance\tat\tJanuary\t1 | $11,158 | $9,058 | $7,800 |
| Issuance\tof\tpreferred\tstock | 8,905 | 3,900 | 1,258 |
| Redemption\tof\tpreferred\tstock | — | (1,800) | — |
| Balance\tat\tDecember\t31 | 20,063 | 11,158 | 9,058 |
| Common\tstock |  |  |  |
| Balance\tat\tJanuary\t1\tand\tDecember\t31 | 4,105 | 4,105 | 4,105 |
| Additional\tpaid-in\tcapital |  |  |  |
| Balance\tat\tJanuary\t1 | 93,828 | 94,604 | 95,602 |
| Shares\tissued\tand\tcommitments\tto\tissue\tcommon\tstock\tfor\temployee\tstock-based\tcompensation\tawards,\tand\trelated\ttax\teffects | (508) | (752) | (736) |
| Other | (50) | (24) | (262) |
| Balance\tat\tDecember\t31 | 93,270 | 93,828 | 94,604 |
| Retained\tearnings |  |  |  |
| Balance\tat\tJanuary\t1 | 115,756 | 104,223 | 88,315 |
| Net\tincome | 21,762 | 17,923 | 21,284 |
| Dividends\tdeclared: |  |  |  |
| Preferred\tstock | (1,125) | (805) | (647) |
|  | (6,078) | (5,585) | (4,729) |
| Balance\tat\tDecember\t31 | 130,315 | 115,756 | 104,223 |
| Accumulated\tother\tcomprehensive\tincome/(loss) |  |  |  |
| Balance\tat\tJanuary\t1 | 1,199 | 4,102 | 944 |
| Other\tcomprehensive\tincome/(loss) | 990 | (2,903) | 3,158 |
| Balance\tat\tDecember\t31 | 2,189 | 1,199 | 4,102 |
| Shares\theld\tin\tRSU\tTrust,\tat\tcost |  |  |  |
| Balance\tat\tJanuary\t1 | (21) | (21) | (38) |
| Reissuance\tfrom\tRSU\tTrust | — | — | 17 |
| Balance\tat\tDecember\t31 | (21) | (21) | (21) |
| Treasury\tstock,\tat\tcost |  |  |  |
| Balance\tat\tJanuary\t1 | (14,847) | (12,002) | (13,155) |
| Purchase\tof\ttreasury\tstock | (4,760) | (4,789) | (1,415) |
| Reissuance\tfrom\ttreasury\tstock | 1,751 | 1,944 | 2,574 |
| Share\trepurchases\trelated\tto\temployee\tstock-based\tcompensation\tawards | — | — | (6) |
| Balance\tat\tDecember\t31 | (17,856) | (14,847) | (12,002) |
| Total\tstockholders'\tequity | $232,065 | $211,178 | $204,069 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  | 175 |

# Consolidated	statements	of	cash	flows

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Operating\tactivities |  |  |  |
| Net\tincome | $21,762 | $17,923 | $21,284 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tnet\tcash\tprovided\tby/(used\tin)\toperating\tactivities: |  |  |  |
| Provision\tfor\tcredit\tlosses | 3,139 | 225 | 3,385 |
| Depreciation\tand\tamortization | 4,759 | 5,306 | 5,147 |
| Deferred\ttax\texpense | 4,210 | 8,003 | 1,130 |
| Investment\tsecurities\tgains | (77) | (667) | (2,110) |
| Stock-based\tcompensation | 2,190 | 2,219 | 2,545 |
| Originations\tand\tpurchases\tof\tloans\theld-for-sale | (67,525) | (75,928) | (34,026) |
| Proceeds\tfrom\tsales,\tsecuritizations\tand\tpaydowns\tof\tloans\theld-for-sale | 71,407 | 73,566 | 33,202 |
| Net\tchange\tin: |  |  |  |
| Trading\tassets | (24,814) | 89,110 | (5,379) |
| Securities\tborrowed | 1,020 | 7,562 | 23,455 |
| Accrued\tinterest\tand\taccounts\treceivable | (3,637) | (2,340) | 1,732 |
| Other\tassets | (9,166) | 526 | (4,683) |
| Trading\tliabilities | 26,818 | (9,772) | (3,921) |
| Accounts\tpayable\tand\tother\tliabilities | 6,065 | (5,743) | (13,069) |
| Other\toperating\tadjustments | 442 | (2,037) | (3,613) |
| Net\tcash\tprovided\tby\toperating\tactivities | 36,593 | 107,953 | 25,079 |
| Investing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Deposits\twith\tbanks | (168,426) | (194,363) | (36,595) |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements | 30,848 | 47,726 | (60,821) |
| Held-to-maturity\tsecurities: |  |  |  |
| Proceeds\tfrom\tpaydowns\tand\tmaturities | 4,169 | 189 | 4 |
| Purchases | (10,345) | (24,214) | — |
| Available-for-sale\tsecurities: |  |  |  |
| Proceeds\tfrom\tpaydowns\tand\tmaturities | 90,664 | 89,631 | 112,633 |
| Proceeds\tfrom\tsales | 38,411 | 73,312 | 81,957 |
| Purchases | (121,504) | (130,266) | (189,630) |
| Proceeds\tfrom\tsales\tand\tsecuritizations\tof\tloans\theld-for-investment | 20,115 | 12,033 | 6,430 |
| Other\tchanges\tin\tloans,\tnet | (51,749) | (23,721) | (30,491) |
| Net\tcash\treceived\tfrom/(used\tin)\tbusiness\tacquisitions\tor\tdispositions | 843 | (149) | 88 |
| All\tother\tinvesting\tactivities,\tnet | 1,338 | (679) | (3,400) |
| Net\tcash\tused\tin\tinvesting\tactivities | (165,636) | (150,501) | (119,825) |
| Financing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Deposits | 89,346 | 81,476 | 67,250 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements | 10,905 | (58,867) | 26,546 |
| Commercial\tpaper\tand\tother\tborrowed\tfunds | 9,242 | 2,784 | 9,315 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tvariable\tinterest\tentities | (834) | (10,433) | 345 |
| Proceeds\tfrom\tlong-term\tborrowings | 78,515 | 83,546 | 86,271 |
| Payments\tof\tlong-term\tborrowings | (65,275) | (60,497) | (96,473) |
| Excess\ttax\tbenefits\trelated\tto\tstock-based\tcompensation | 407 | 137 | 255 |
| Proceeds\tfrom\tissuance\tof\tpreferred\tstock | 8,847 | 3,873 | 1,234 |
| Redemption\tof\tpreferred\tstock | — | (1,800) | — |
| Treasury\tstock\tand\twarrants\trepurchased | (4,760) | (4,789) | (1,653) |
| Dividends\tpaid | (6,990) | (6,056) | (5,194) |
| All\tother\tfinancing\tactivities,\tnet | (1,175) | (1,050) | (189) |
| Net\tcash\tprovided\tby\tfinancing\tactivities | 118,228 | 28,324 | 87,707 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tdue\tfrom\tbanks | (1,125) | 272 | 1,160 |
| Net\tdecrease\tin\tcash\tand\tdue\tfrom\tbanks | (11,940) | (13,952) | (5,879) |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tbeginning\tof\tthe\tperiod | 39,771 | 53,723 | 59,602 |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tend\tof\tthe\tperiod | $27,831 | $39,771 | $53,723 |
| Cash\tinterest\tpaid | $8,194 | $9,573 | $11,161 |
| Cash\tincome\ttaxes\tpaid,\tnet | 1,392 | 3,502 | 2,050 |

# 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	derivative	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	balance	sheet	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	loaned	default	rights	(i)	all	securities	loan	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.

# 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

# Subsequent	events

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	("OEP")	investment	professionals. The	new	management	company	will	provide	investment	management	services	to the	acquirer	of	the	investments	sold	in	the	Private	Equity	sale	and	for	the	portion of	private	equity	investments	retained	by	the	Firm.	Upon	closing,	this	transaction 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	to	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	Firm has	a	firmwide	Valuation	Governance	Forum	("VGF")	comprised	of	senior finance	and	risk	executives	to	oversee	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,	and	also	includes	sub-forums for	the	Corporate	&	Investment	Bank	("CIB"),	Mortgage	Banking,	(part	of

Consumer	&	Community	Banking)	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,	and	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.	In	addition	there	are	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,	applying	a	consistent	framework across	the	Firm.	For	more	information	on	such	adjustments	see	Credit	and funding	adjustments	on	pages	196–197	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	and	reviews	and approves	a	wide	range	of	models,	including	risk	management,	valuation	and certain	regulatory	capital	models	used	by	the	Firm.	The	Model	Risk	function	is part	of	the	Firm's	Model	Risk	and	Development	unit,	and	the	Firmwide	Model Risk	and	Development	Executive	reports	to	the	Firm's	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	significant	valuation	models,	as	well	as	material	changes	to	existing valuation	models,	are	reviewed	and	approved	prior	to	implementation	except where	specified	conditions	are	met.	The	Model	Risk	function	performs	an	annual firmwide	model	risk	assessment	where	developments	in	the	product	or	market	are considered	in	determining	whether	valuation	models	which	have	already	been reviewed	need	to	be	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	used	by	the	Firm	to	measure	its	more	significant	products/instruments	at	fair	value,	including	the	general classification	of	such	instruments	pursuant	to	the	valuation	hierarchy.

•	Market	funding	levels

•	Correlation	levels

Structured	credit	derivatives	specific	inputs	include:

•	CDS	spreads	and	recovery	rates

•	Credit	correlation	between	the	underlying	debt	instruments	(levels	are	modeled	on	a transaction	basis	and	calibrated	to	liquid	benchmark	tranche	indices)

•	Actual	transactions,	where	available,	are	used	to	regularly	recalibrate	unobservable parameters

# Certain	long-dated	equity	option	specific	inputs	include:

•	Long-dated	equity	volatilities

Certain	interest	rate	and	foreign	exchange	("FX")	exotic	options	specific	inputs	include:

•	Interest	rate	correlation

•	Interest	rate	spread	volatility

•	Foreign	exchange	correlation

•	Correlation	between	interest	rates	and	foreign	exchange	rates

•	Parameters	describing	the	evolution	of	underlying	interest	rates

Certain	commodity	derivatives	specific	inputs	include:

The	following	table	presents	the	asset	and	liabilities	reported	at	fair	value	as	of	December	31,	2014	and	2013,	by	major	product	category	and	fair	value	hierarchy.

# Assets	and	liabilities	measured	at	fair	value	on	a	recurring	basis

| 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 | 748 |  | 431 |  | — | 106,069 |
| 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 | 146,211 |  | 22,489 |  | — | 320,013 |
| Derivative\treceivables: |  |  |  |  |  |  |  |
| Interest\trate | 473 | 951,901 |  | 4,149 |  | (922,798) | 33,725 |
| Credit | — | 73,853 |  | 2,989 |  | (75,004) | 1,838 |
| Foreign\texchange | 758 | 205,887 |  | 2,276 |  | (187,668) | 21,253 |
| Equity | — | 44,240 |  | 2,552 |  | (38,615) | 8,177 |
| Commodity | 247 | 42,807 |  | 599 |  | (29,671) | 13,982 |
| Total\tderivative\treceivables(e) | 1,478 | 1,318,688 |  | 12,565 |  | (1,253,756) | 78,975 |
| Total\ttrading\tassets | 152,791 | 1,464,899 |  | 35,054 |  | (1,253,756) | 398,988 |
| 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 |  | 2,475 |  | — | 5,747 |
| All\tother | 4,018 | 230 |  | 2,371 |  | — | 6,619 |
| Total\tother\tassets | 4,666 | 2,854 |  | 4,846 |  | — | 12,366 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\trecurring\tbasis | $197,652 | $1,754,920 | (g) | $50,914 | (g) | $(1,253,756) | $749,730 |
| 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 | 920,623 |  | 3,523 |  | (906,900) | 17,745 |
| Credit | — | 73,095 |  | 2,800 |  | (74,302) | 1,593 |
| Foreign\texchange | 746 | 214,800 |  | 2,802 |  | (195,378) | 22,970 |

| Equity | — | 46,228 | 4,337 | (38,825) | 11,740 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Commodity | 141 | 44,318 | 1,164 | (28,555) | 17,068 |
| Total\tderivative\tpayables(e) | 1,386 | 1,299,064 | 14,626 | (1,243,960) | 71,116 |
| Total\ttrading\tliabilities | 64,300 | 1,317,777 | 14,698 | (1,243,960) | 152,815 |
| Accounts\tpayable\tand\tother\tliabilities | — | — | 36 | — | 36 |
| 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 | $64,300 | $1,359,355 | $32,069 | $(1,243,960) | $211,764 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  | 185 |

| December	31,	2013	(in	millions) | Level	1 | Level	2 |  | Level	3 |  | Derivative	netting<br>adjustments | Total	fair	value |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements | $— | $25,135 |  | $— |  | $— | $25,135 |
| Securities\tborrowed | — | 3,739 |  | — |  | — | 3,739 |
| Trading\tassets: |  |  |  |  |  |  |  |
| Debt\tinstruments: |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies(a) | 4 | 25,582 |  | 1,005 |  | — | 26,591 |
| Residential\t–\tnonagency | — | 1,749 |  | 726 |  | — | 2,475 |
| Commercial\t–\tnonagency | — | 871 |  | 432 |  | — | 1,303 |
| Total\tmortgage-backed\tsecurities | 4 | 28,202 |  | 2,163 |  | — | 30,369 |
| U.S.\tTreasury\tand\tgovernment\tagencies(a) | 14,933 | 10,547 |  | — |  | — | 25,480 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | — | 6,538 |  | 1,382 |  | — | 7,920 |
| Certificates\tof\tdeposit,\tbankers'\tacceptances\tand\tcommercial\tpaper | — | 3,071 |  | — |  | — | 3,071 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 25,762 | 22,379 |  | 143 |  | — | 48,284 |
| Corporate\tdebt\tsecurities(h) | — | 24,802 |  | 5,920 |  | — | 30,722 |
| Loans(b) | — | 17,331 |  | 13,455 |  | — | 30,786 |
| Asset-backed\tsecurities | — | 3,647 |  | 1,272 |  | — | 4,919 |
| Total\tdebt\tinstruments | 40,699 | 116,517 |  | 24,335 |  | — | 181,551 |
| Equity\tsecurities | 107,667 | 954 |  | 885 |  | — | 109,506 |
| Physical\tcommodities(c) | 4,968 | 5,217 |  | 4 |  | — | 10,189 |
| Other | — | 5,659 |  | 2,000 |  | — | 7,659 |
| Total\tdebt\tand\tequity\tinstruments(d) | 153,334 | 128,347 |  | 27,224 |  | — | 308,905 |
| Derivative\treceivables: |  |  |  |  |  |  |  |
| Interest\trate | 419 | 848,862 |  | 5,398 |  | (828,897) | 25,782 |
| Credit | — | 79,754 |  | 3,766 |  | (82,004) | 1,516 |
| Foreign\texchange | 434 | 151,521 |  | 1,644 |  | (136,809) | 16,790 |
| Equity | — | 45,892 |  | 7,039 |  | (40,704) | 12,227 |
| Commodity | 320 | 34,696 |  | 722 |  | (26,294) | 9,444 |
| Total\tderivative\treceivables(e) | 1,173 | 1,160,725 |  | 18,569 |  | (1,114,708) | 65,759 |
| Total\ttrading\tassets | 154,507 | 1,289,072 |  | 45,793 |  | (1,114,708) | 374,664 |
| Available-for-sale\tsecurities: |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies(a) | — | 77,815 |  | — |  | — | 77,815 |
| Residential\t–\tnonagency | — | 61,760 |  | 709 |  | — | 62,469 |
| Commercial\t–\tnonagency | — | 15,900 |  | 525 |  | — | 16,425 |
| Total\tmortgage-backed\tsecurities | — | 155,475 |  | 1,234 |  | — | 156,709 |
| U.S.\tTreasury\tand\tgovernment\tagencies(a) | 21,091 | 298 |  | — |  | — | 21,389 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | — | 29,461 |  | — |  | — | 29,461 |
| Certificates\tof\tdeposit | — | 1,041 |  | — |  | — | 1,041 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 25,648 | 30,600 |  | — |  | — | 56,248 |
| Corporate\tdebt\tsecurities | — | 21,512 |  | — |  | — | 21,512 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | — | 27,409 |  | 821 |  | — | 28,230 |
| Other | — | 11,978 |  | 267 |  | — | 12,245 |
| Equity\tsecurities | 3,142 | — |  | — |  | — | 3,142 |
| Total\tavailable-for-sale\tsecurities | 49,881 | 277,774 |  | 2,322 |  | — | 329,977 |
| Loans | — | 80 |  | 1,931 |  | — | 2,011 |
| Mortgage\tservicing\trights | — | — |  | 9,614 |  | — | 9,614 |
| Other\tassets: |  |  |  |  |  |  |  |
| Private\tequity\tinvestments(f) | 606 | 429 |  | 6,474 |  | — | 7,509 |
| All\tother | 4,213 | 289 |  | 3,176 |  | — | 7,678 |
| Total\tother\tassets | 4,819 | 718 |  | 9,650 |  | — | 15,187 |
| Total\tassets\tmeasured\tat\tfair\tvalue\ton\ta\trecurring\tbasis | $209,207 | $1,596,518 | (g) | $69,310 | (g) | $(1,114,708) | $760,327 |
| Deposits | $— | $4,369 |  | $2,255 |  | $— | $6,624 |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements | — | 5,426 |  | — |  | — | 5,426 |
| Other\tborrowed\tfunds | — | 11,232 |  | 2,074 |  | — | 13,306 |
| Trading\tliabilities: |  |  |  |  |  |  |  |
| Debt\tand\tequity\tinstruments(d) | 61,262 | 19,055 |  | 113 |  | — | 80,430 |
| Derivative\tpayables: |  |  |  |  |  |  |  |
| Interest\trate | 321 | 822,014 |  | 3,019 |  | (812,071) | 13,283 |
| Credit | — | 78,731 |  | 3,671 |  | (80,121) | 2,281 |
| Foreign\texchange | 443 | 156,838 |  | 2,844 |  | (144,178) | 15,947 |
| Equity | — | 46,552 |  | 8,102 |  | (39,935) | 14,719 |
| Commodity | 398 | 36,609 |  | 607 |  | (26,530) | 11,084 |

| Total	derivative	payables(e) | 1,162 | 1,140,744 | 18,243 | (1,102,835) | 57,314 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Total\ttrading\tliabilities | 62,424 | 1,159,799 | 18,356 | (1,102,835) | 137,744 |
| Accounts\tpayable\tand\tother\tliabilities | — | — | 25 | — | 25 |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs | — | 756 | 1,240 | — | 1,996 |
| Long-term\tdebt | — | 18,870 | 10,008 | — | 28,878 |
| Total\tliabilities\tmeasured\tat\tfair\tvalue\ton\ta\trecurring\tbasis | $62,424 | $1,200,452 | $33,958 | $(1,102,835) | $193,999 |

(a) At	December	31,	2014	and	2013,	included	total	U.S.	government-sponsored	enterprise	obligations	of	$84.1	billion	and	$91.5	billion,	respectively,	which	were	predominantly	mortgage-

related.

(b) At	December	31,	2014	and	2013,	included	within	trading	loans	were	$17.0	billion	and	$14.8	billion,	respectively,	of	residential	first-lien	mortgages,	and	$5.8	billion	and	$2.1	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	$7.7	billion	and	$6.0	billion,	respectively,	and	reverse	mortgages	of	$3.4	billion	and	$3.6	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.	Therefore,	the	balances	reported	in	the	fair	value	hierarchy	table	are	gross	of	any	counterparty	netting	adjustments.	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	$2.5	billion	and	$7.6	billion	at	December	31,	2014	and	2013,	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	$6.0	billion	and	$8.0	billion	at	December	31,	2014	and	2013, respectively.

(g) Includes	investments	in	hedge	funds,	private	equity	funds,	real	estate	and	other	funds	that	do	not	have	readily	determinable	fair	values.	The	Firm	uses	net	asset	value	per	share	when	measuring	the	fair	value	of	these	investments.	At December	31,	2014	and	2013,	the	fair	values	of	these	investments	were	$1.8	billion	and	$3.2	billion,	respectively,	of	which	$337	million	and	$899	million,	respectively	were	classified	in	level	2,	and	$1.4	billion	and	$2.3	billion,	respectively, in	level	3.

# Transfers	between	levels	for	instruments	carried	at	fair	value	on	a	recurring basis

For	the	year	ended	December	31,	2014	and	2013,	there	were	no	significant transfers	between	levels	1	and	2.

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.

During	the	year	ended	December	31,	2013,	transfers	from	level	3	to	level	2 included	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;	and	$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.

For	the	year	ended	December	31,	2012,	$113.9	billion	of	settled	U.S.	government agency	mortgage-backed	securities	were	transferred	from	level	1	to	level	2. While	the	U.S.	government	agency	mortgage-backed	securities	market	remained highly	liquid	and	transparent,	the	transfer	reflected	greater	market	price differentiation	between	settled	securities	based	on	certain	underlying	loan specific	factors.	There	were	no	significant	transfers	from	level	2	to	level	1	for	the year	ended	December	31,	2012.

For	the	year	ended	December	31,	2012,	there	were	no	significant	transfers	from level	2	into	level	3.	For	the	year	ended	December	31,	2012,	transfers	from	level	3 into	level	2	included	$1.2	billion	of	derivative	payables	based	on	increased observability	of	certain	structured	equity	derivatives;	and	$1.8	billion	of	long- term	debt	due	to	increased	observability	of	certain	equity	structured	notes.

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	181–184	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, the	equity	and	interest	rate	correlation	inputs	used	in	estimating	fair	value	were concentrated	at	the	upper	end	of	the	range	presented,	while	the	credit	correlation inputs	were	distributed	across	the	range	presented	and	the	foreign	exchange correlation	inputs	were	concentrated	at	the	lower	end	of	the	range	presented.	In addition,	the	interest	rate	volatility	inputs	used	in	estimating	fair	value	were concentrated	at	the	upper	end	of	the	range	presented	and	the	foreign	exchange correlation	inputs	were	concentrated	at	the	lower	end	of	the	range	presented.	The equity	volatility	is	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,	2014	(in	millions,	except	for	ratios	and	basis	points)

| Principal	valuation	technique | Unobservable	inputs | Range	of	input	values | Range	of	input	values | Range	of	input	values | Weighted<br>average |
| :--- | :--- | :--- | :--- | :--- | :--- |
| \t Discounted\tcash\tflows | Yield | 1% | - | 25% | 5% |
|  | Prepayment\tspeed | 0% | - | 18% | 6% |
|  | Conditional\tdefault\trate | 0% | - | 100% | 22% |
|  | Loss\tseverity | 0% | - | 90% | 27% |
| \t Discounted\tcash\tflows | Yield | 2% | - | 32% | 5% |
|  | Conditional\tdefault\trate | 0% | - | 100% | 8% |
|  | Loss\tseverity | 0% | - | 50% | 29% |
| \t Discounted\tcash\tflows | Credit\tspread | 53\tbps | - | 270\tbps | 140\tbps |
|  | Yield | 1% | - | 22% | 7% |
| \t Market\tcomparables | Price | $— | - | $131 | $90 |
| \t Option\tpricing | Interest\trate\tcorrelation | (75)% | - | 95% |  |
|  | Interest\trate\tspread\tvolatility | 0% | - | 60% |  |
| \t Discounted\tcash\tflows | Credit\tcorrelation | 47% | - | 90% |  |
| \t Option\tpricing | Foreign\texchange\tcorrelation | 0% | - | 60% |  |
| \t Option\tpricing | Equity\tvolatility | 15% | - | 65% |  |
| \t Discounted\tcash\tflows | Forward\tcommodity\tprice | $50 | - | $90\tper\tbarrel |  |
| \t Discounted\tcash\tflows | Credit\tspread | 260\tbps | - | 675\tbps | 279\tbps |
|  | Prepayment\tspeed |  | 20% |  | 20% |
|  | Conditional\tdefault\trate |  | 2% |  | 2% |
|  | Loss\tseverity |  | 40% |  | 40% |
| \t Market\tcomparables | Price | $— | - | $146 | $79 |
| \t Discounted\tcash\tflows | Refer\tto\tNote\t17 |  |  |  |  |
| \t Market\tcomparables | EBITDA\tmultiple | 6x | - | 12.4x | 9.1x |
|  | Liquidity\tadjustment | 0% | - | 15% | 7% |
| \t Net\tasset\tvalue | Net\tasset\tvalue(e) |  |  |  |  |
| \t Option\tpricing | Interest\trate\tcorrelation | (75)% | - | 95% |  |
|  | Interest\trate\tspread\tvolatility | 0% | - | 60% |  |
|  | Foreign\texchange\tcorrelation | 0% | - | 60% |  |
|  | Equity\tcorrelation | (55)% | - | 85% |  |
| \t Discounted\tcash\tflows | Credit\tcorrelation | 47% | - | 90% |  |

(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	 $491	million	of	credit	derivative	receivables	and	$433	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	 $795	million	of	credit	derivative	receivables	and	$715	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	range	has	not	been	disclosed	due	to	the	wide	range	of	possible	values	given	the	diverse	nature	of	the	underlying	investments.

# 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	a	host	of	factors	relating	to	the	underlying	mortgages.	This	includes the	loan-to-value	ratio,	the	nature	of	the	lender's	lien	on	the	property	and	various 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.

Net	asset	value	–	Net	asset	value	is	the	total	value	of	a	fund's	assets	less liabilities.	An	increase	in	net	asset	value	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,	2014,	2013	and	2012.	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,\t2014\n(in\tmillions) | Fair\tvalue\tat\nJanuary\t1,\t2014 | realized/unrealized\ngains/(losses) | realized/unrealized\ngains/(losses) | Purchases(g) | Sales | Settlements | Transfers\tinto\tand/or\nout\tof\tlevel\t3(h) | 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\tmunicipalities | 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 | 885 | 112 |  | 248 | (272) | (290) | (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\tinstruments | 27,224 | 1,066 | (c) | 26,494 | (16,799) | (10,293) | (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 | 6,474 | 443 | (c) | 164 | (1,967) | (360) | (2,279) | 2,475 | 26 | (c) |
| All\tother | 3,176 | 33 | (f) | 190 | (451) | (577) | — | 2,371 | 11 | (f) |

|  |  |  |  |  |  |  |  |  |  |  | Change	in	unrealized | Change	in	unrealized |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended |  | Total |  |  |  |  |  |  |  |  | gains/(losses)\trelated\tto | gains/(losses)\trelated\tto |
| December\t31,\t2012\n(in\tmillions) | Fair\tvalue\tat\nJanuary\t1,\t2012 | realized/unrealized\ngains/(losses) | realized/unrealized\ngains/(losses) | Purchases(g) |  | Sales |  | Settlements | Transfers\tinto\tand/or\nout\tof\tlevel\t3(h) | Fair\tvalue\tat\nDec.\t31,\t2012 | financial\tinstruments\theld\nat\tDec.\t31,\t2012 | financial\tinstruments\theld\nat\tDec.\t31,\t2012 |
| Assets: |  |  |  |  |  |  |  |  |  |  |  |  |
| Trading\tassets: |  |  |  |  |  |  |  |  |  |  |  |  |
| Debt\tinstruments: |  |  |  |  |  |  |  |  |  |  |  |  |
| Mortgage-backed\tsecurities: |  |  |  |  |  |  |  |  |  |  |  |  |
| U.S.\tgovernment\tagencies | $86 | $(44) |  | $575 |  | $(103) |  | $(16) | $— | $498 | $(21) |  |
| Residential\t–\tnonagency | 796 | 151 |  | 417 |  | (533) |  | (145) | (23) | 663 | 74 |  |
| Commercial\t–\tnonagency | 1,758 | (159) |  | 287 |  | (475) |  | (104) | (100) | 1,207 | (145) |  |
| Total\tmortgage-backed\tsecurities | 2,640 | (52) |  | 1,279 |  | (1,111) |  | (265) | (123) | 2,368 | (92) |  |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 1,619 | 37 |  | 336 |  | (552) |  | (4) | — | 1,436 | (15) |  |
| Non-U.S.\tgovernment\tdebt\tsecurities | 104 | (6) |  | 661 |  | (668) |  | (24) | — | 67 | (5) |  |
| Corporate\tdebt\tsecurities | 6,373 | 187 |  | 8,391 |  | (6,186) |  | (3,045) | (412) | 5,308 | 689 |  |
| Loans | 12,209 | 836 |  | 5,342 |  | (3,269) |  | (3,801) | (530) | 10,787 | 411 |  |
| Asset-backed\tsecurities | 7,965 | 272 |  | 2,550 |  | (6,468) |  | (614) | (9) | 3,696 | 184 |  |
| Total\tdebt\tinstruments | 30,910 | 1,274 |  | 18,559 |  | (18,254) |  | (7,753) | (1,074) | 23,662 | 1,172 |  |
| Equity\tsecurities | 1,177 | (209) |  | 460 |  | (379) |  | (12) | 77 | 1,114 | (112) |  |
| Other | 880 | 186 |  | 68 |  | (108) |  | (163) | — | 863 | 180 |  |
| Total\ttrading\tassets\t–\tdebt\tand\tequity\ninstruments | 32,967 | 1,251 | (c) | 19,087 |  | (18,741) |  | (7,928) | (997) | 25,639 | 1,240 | (c) |
| Net\tderivative\treceivables:(a) |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest\trate | 3,561 | 6,930 |  | 406 |  | (194) |  | (7,071) | (310) | 3,322 | 905 |  |
| Credit | 7,732 | (4,487) |  | 124 |  | (84) |  | (1,416) | 4 | 1,873 | (3,271) |  |
| Foreign\texchange | (1,263) | (800) |  | 112 |  | (184) |  | 436 | (51) | (1,750) | (957) |  |
| Equity | (3,105) | 160 | (i) | 1,279 | (i) | (2,174) | (i) | 899 | 1,135 | (1,806) | 580 |  |
| Commodity | (687) | (673) |  | 74 |  | 64 |  | 1,278 | 198 | 254 | (160) |  |
| Total\tnet\tderivative\treceivables | 6,238 | 1,130 | (c) | 1,995 |  | (2,572) |  | (5,874) | 976 | 1,893 | (2,903) | (c) |
| Available-for-sale\tsecurities: |  |  |  |  |  |  |  |  |  |  |  |  |
| Asset-backed\tsecurities | 24,958 | 135 |  | 9,280 |  | (3,361) |  | (3,104) | 116 | 28,024 | 118 |  |
| Other | 528 | 55 |  | 667 |  | (113) |  | (245) | — | 892 | 59 |  |
| Total\tavailable-for-sale\tsecurities | 25,486 | 190 | (d) | 9,947 |  | (3,474) |  | (3,349) | 116 | 28,916 | 177 | (d) |
| Loans | 1,647 | 695 | (c) | 1,536 |  | (22) |  | (1,718) | 144 | 2,282 | 12 | (c) |
| Mortgage\tservicing\trights | 7,223 | (635) | (e) | 2,833 |  | (579) |  | (1,228) | — | 7,614 | (635) | (e) |
| Other\tassets: |  |  |  |  |  |  |  |  |  |  |  |  |
| Private\tequity\tinvestments | 6,751 | 420 | (c) | 1,545 |  | (512) |  | (977) | (46) | 7,181 | 333 | (c) |
| All\tother | 4,374 | (195) | (f) | 818 |  | (238) |  | (501) | — | 4,258 | (200) | (f) |

(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 15%,	18%	and	18%	at	December	31,	2014,	2013	and	2012, 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	Other	Comprehensive	Income	("OCI"). Realized	gains/(losses)	and	foreign	exchange	remeasurement	adjustments	recorded	in	income	on	AFS	securities	were	$(43)	million,	$17	million,	and	$145	million	for	the	years	ended	December	31,	2014,	2013	and	2012,

respectively.	Unrealized	gains/(losses)	recorded	on	AFS	securities	in	OCI	were	$(16)	million,	$13	million	and	$45	million	for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.

(e) Changes	in	fair	value	for	CCB	mortgage	servicing	rights	are	reported	in	mortgage	fees	and	related income.

(f) Predominantly	reported	in	other income.

(g) Loan	originations	are	included	in	purchases.

(h) 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.

(i) The	prior	period	amounts	have	been	revised.	The	revision	had	no	impact	on	the	Firm's	Consolidated	balance	sheets	or	its	results	of operations.

# Level	3	analysis

# Consolidated	balance	sheets	changes

Level	3	assets	(including	assets	measured	at	fair	value	on	a	nonrecurring	basis) were	2.1%	of	total	Firm	assets	at	December	31,	2014.	The	following	describes significant	changes	to	level	3	assets	since	December	31,	2013,	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	page	197.

•$6.0	billion	decrease	in	gross	derivative	receivables	due	to	a	$4.5	billion decrease	in	equity	derivative	receivables	due	to	expirations	and	a	transfer from	level	3	into	level	2	as	a	result	of	an	increase	in	observability	of	certain equity	option	valuation	inputs;	and	a

$1.2	billion	decrease	in	interest	rate	derivatives	due	to	market	movements;

•$4.7	billion	decrease	in	trading	assets	-	debt	and	equity	instruments	is	largely due	to	a	decrease	of	$2.9	billion	in	corporate	debt	securities.	The	decrease	in corporate	debt	securities	is	driven	by	transfers	from	level	3	to	level	2	as	a result	of	an	increase	in	observability	of	certain	valuation	inputs,	as	well	as	net sales	and	maturities;

•$4.0	billion	decrease	in	private	equity	investments	predominantly	driven	by $2.0	billion	in	sales	and	$2.3	billion	of	transfers	into	level	2	based	on	an increase	in	observability	and	price	transparency;

•$2.2	billion	decrease	in	MSRs.	For	further	discussion	of	the	change,	refer	to Note	17.

# 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,	2014,	2013	and	2012.	For	further	information	on	these instruments,	see	Changes	in	level	3	recurring	fair	value	measurements rollforward	tables	on	pages	191–195.

•$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.

largely	driven	by	tightening	of	credit	spreads	and	fluctuation	in	foreign exchange	rates;

•	$1.1	billion	of	net	gains	on	derivatives,	driven	by $6.9	billion	of	net	gains	predominantly	on	interest	rate	lock	commitments	due to	increased	volumes	and	lower	interest	rates,	partially	offset	by	$4.5	billion of	net	losses	on	credit	derivatives	largely	as	a	result	of	tightening	of	reference entity	credit	spreads.

# 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:

•Credit	valuation	adjustments	("CVA")	are	taken	to	reflect	the	credit	quality	of	a counterparty	in	the	valuation	of	derivatives.	CVA	are	necessary	when	the market	price	(or	parameter)	is	not	indicative	of	the	credit	quality	of	the counterparty.	As	few	classes	of	derivative	contracts	are	listed	on	an	exchange, derivative	positions	are	predominantly	valued	using	models	that	use	as	their basis	observable	market	parameters.	An	adjustment	therefore	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	spread	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.

•The	Firm	incorporates	the	impact	of	funding	in	its	valuation	estimates	where there	is	evidence	that	a	market	participant	in	the	principal	market	would incorporate	it	in	a	transfer	of	the	instrument.	As	a	result,	the	fair	value	of collateralized	derivatives	is	estimated	by	discounting	expected	future	cash flows	at	the	relevant	overnight	indexed	swap	("OIS")	rate	given	the underlying	collateral	agreement	with	the	counterparty.	Effective	in	2013,	the Firm	implemented	a	FVA	framework	to	incorporate	the	impact	of	funding	into its

valuation	estimates	for	uncollateralized	(including	partially	collateralized) over-the-counter	("OTC")	derivatives	and	structured	notes.	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	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	credit	and	funding	adjustments,	excluding	the effect	of	any	associated	hedging	activities,	reflected	within	the	Consolidated balance	sheets	as	of	the	dates	indicated.

| December	31,	(in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Derivative\treceivables\tbalance(a) | $78,975 | $65,759 |
| Derivative\tpayables\tbalance(a) | 71,116 | 57,314 |
| Derivatives\tCVA(b) | (2,674) | (2,352) |
| Derivatives\tDVA\tand\tFVA(b)(c) | (380) | (322) |
| Structured\tnotes\tbalance\t(a)(d) | 53,772 | 48,808 |
| Structured\tnotes\tDVA\tand\tFVA(b)(e) | 1,152 | 952 |

(a) Balances	are	presented	net	of	applicable	CVA	and	DVA/FVA.

(b) Positive	CVA	and	DVA/FVA	represent	amounts	that	increased	receivable	balances	or decreased	payable	balances;	negative	CVA	and	DVA/FVA	represent	amounts	that decreased	receivable	balances	or	increased	payable	balances.

(d) Structured	notes	are	predominantly	financial	instruments	containing	embedded	derivatives that	are	measured	at	fair	value	based	on	the	Firm's	election	under	the	fair	value	option.	At December	31,	2014	and	2013,	included	$943	million	and	$1.1	billion,	respectively,	of financial	instruments	with	no	embedded	derivative	for	which	the	fair	value	option	has	also been	elected.	For	further	information	on	these	elections,	see	Note	4.

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.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Credit\tadjustments: |  |  |  |
| Derivatives\tCVA | $(322) | $1,886 | $2,698 |
| Derivatives\tDVA\tand\tFVA(a) | (58) | (1,152) | (590) |
| Structured\tnotes\tDVA\tand\tFVA(b) | 200 | (760) | (340) |

# Assets	and	liabilities	measured	at	fair	value	on	a	nonrecurring	basis

At	December	31,	2014	and	2013,	assets	measured	at	fair	value	on	a	nonrecurring basis	were	$4.5	billion	and	$6.2	billion,	respectively,	comprised	predominantly	of loans	that	had	fair	value	adjustments	for	the	year	ended	December	31,	2014.	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.	At	December	31,	2013, $339	million	and	$5.8	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,	2014	and	2013.	For	the years	ended	December	31,	2014,	2013	and	2012,	there	were	no	significant transfers	between	levels	1,	2 and	3.

Of	the	$3.2	billion	of	the	level	3	assets	measured	at	fair	value	on	a	nonrecurring basis	as	of	December	31,	2014:

•$1.6	billion	related	to	consumer	loans	that	were	reclassified	to	held-for-sale during	the	fourth	quarter	of	2014	subject	to	a	lower	of	cost	or	fair	value adjustment.	These	loans	were	classified	as	level	3,	as	they	are	valued	based	on the	Firm's	internal	valuation	methodology;

•$809	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	8%	to	66%,	with	a weighted	average	of	26%.

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,	2014,	2013	and	2012,	related	to	financial instruments	held	at	those	dates	were	losses	of	$992	million,	$789	million	and $1.6	billion,	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	with	short-dated maturities;	short-term	receivables	and	accrued	interest	receivable;	commercial paper;	federal	funds	purchased;	securities	loaned	and	sold	under	repurchase agreements	with	short-dated	maturities;	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,	2014	and	2013,	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	181–184	of	this	Note.

|  |  |  | December	31,	2014 |  |  |  | December	31,	2013 | December	31,	2013 | December	31,	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | 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\testimated\nfair\tvalue | Carrying\nvalue | Level\t1 | Level\t2 | Level\t3 | Total\nestimated\nfair\tvalue |
| Financial\tassets |  |  |  |  |  |  |  |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | $27.8 | $27.8 | $— | $— | $27.8 | $39.8 | $39.8 | $— | $— | $39.8 |
| Deposits\twith\tbanks | 484.5 | 480.4 | 4.1 | — | 484.5 | 316.1 | 309.7 | 6.4 | — | 316.1 |
| Accrued\tinterest\tand\taccounts\nreceivable | 70.1 | — | 70.0 | 0.1 | 70.1 | 65.2 | — | 64.9 | 0.3 | 65.2 |
| Federal\tfunds\tsold\tand\tsecurities\npurchased\tunder\tresale\tagreements | 187.2 | — | 187.2 | — | 187.2 | 223.0 | — | 223.0 | — | 223.0 |
| Securities\tborrowed | 109.4 | — | 109.4 | — | 109.4 | 107.7 | — | 107.7 | — | 107.7 |
| Securities,\theld-to-maturity(a) | 49.3 | — | 51.2 | — | 51.2 | 24.0 | — | 23.7 | — | 23.7 |
| Loans,\tnet\tof\tallowance\tfor\tloan\nlosses(b) | 740.5 | — | 21.8 | 723.1 | 744.9 | 720.1 | — | 23.0 | 697.2 | 720.2 |
| Other(c) | 58.1 | — | 55.7 | 7.1 | 62.8 | 58.2 | — | 54.5 | 7.4 | 61.9 |
| Financial\tliabilities |  |  |  |  |  |  |  |  |  |  |
| Deposits | $1,354.6 | $— | $1,353.6 | $1.2 | $1,354.8 | $1,281.1 | $— | $1,280.3 | $1.2 | $1,281.5 |
| Federal\tfunds\tpurchased\tand |  |  |  |  |  |  |  |  |  |  |
| securities\tloaned\tor\tsold\tunder |  |  |  |  |  |  |  |  |  |  |
| repurchase\tagreements | 189.1 | — | 189.1 | — | 189.1 | 175.7 | — | 175.7 | — | 175.7 |
| Commercial\tpaper | 66.3 | — | 66.3 | — | 66.3 | 57.8 | — | 57.8 | — | 57.8 |
| Other\tborrowed\tfunds | 15.5 |  | 15.5 | — | 15.5 | 14.7 | — | 14.7 | — | 14.7 |
| Accounts\tpayable\tand\tother\nliabilities | 176.7 | — | 173.7 | 2.8 | 176.5 | 160.2 | — | 158.2 | 1.8 | 160.0 |
| Beneficial\tinterests\tissued\tby\nconsolidated\tVIEs | 50.2 | — | 48.2 | 2.0 | 50.2 | 47.6 | — | 44.3 | 3.2 | 47.5 |
| Long-term\tdebt\tand\tjunior |  |  |  |  |  |  |  |  |  |  |
| subordinated\tdeferrable\tinterest |  |  |  |  |  |  |  |  |  |  |
| debentures(d) | 246.6 | — | 251.6 | 3.8 | 255.4 | 239.0 | — | 240.8 | 6.0 | 246.8 |

(a) Carrying	value	includes	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	181–184.

(c) Current	period	amounts	have	been	updated	to	include	certain	nonmarketable	equity	securities.	Prior	period	amounts	have	been	revised	to	conform	to	the	current	presentation.

(d) Carrying	value	includes	unamortized	original	issue	discount	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	and	estimated	fair	value	of	the	Firm's	wholesale	lending-related	commitments	were	as	follows	for	the	periods	indicated.

|  |  | December	31,	2014 | Estimated	fair	value	hierarchy | Estimated	fair	value	hierarchy |  |  | December	31,	2013 | Estimated	fair	value	hierarchy | Estimated	fair	value	hierarchy |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tbillions) | Carrying\nvalue(a) | Level\t1 | Level\t2 | Level\t3 | Total\testimated\nfair\tvalue | Carrying\nvalue(a) | Level\t1 | Level\t2 | Level\t3 | Total\testimated\nfair\tvalue |
| Wholesale\tlending-related\ncommitments | $0.6 | $— | $— | $1.6 | $1.6 | $0.7 | $— | $— | $1.0 | $1.0 |

(a) Represents	the	allowance	for	wholesale	lending-related	commitments.	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	182	of	this	Note.

# Trading	assets	and	liabilities

Trading	assets	include	debt	and	equity	instruments	owned	by	JPMorgan	Chase ("long"	positions)	that	are	held	for	client	market-making	and	client-driven activities,	as	well	as	for	certain	risk	management	activities,	certain	loans managed	on	a	fair	value	basis	and	for	which	the	Firm	has	elected	the	fair	value option,	and	physical	commodities

inventories	that	are	generally	accounted	for	at	the	lower	of	cost	or	market	(market approximates	fair	value).	Trading	liabilities	include	debt	and	equity	instruments that	the	Firm	has	sold	to	other	parties	but	does	not	own	("short"	positions).	The Firm	is	obligated	to	purchase	instruments	at	a	future	date	to	cover	the	short positions.	Included	in	trading	assets	and	trading	liabilities	are	the	reported receivables	(unrealized	gains)	and	payables	(unrealized	losses)	related	to derivatives.	Trading	assets	and	liabilities	are	carried	at	fair	value	on	the Consolidated	balance	sheets.	Balances	reflect	the	reduction	of	securities	owned (long	positions)	by	the	amount	of	identical	securities	sold	but	not	yet	purchased (short	positions).

# Trading	assets	and	liabilities	–	average	balances

Average	trading	assets	and	liabilities	were	as	follows	for	the	periods	indicated.

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Trading\tassets\t–\tdebt\tand\tequity\tinstruments | $327,259 | $340,449 | $349,337 |
| Trading\tassets\t–\tderivative\treceivables | 67,123 | 72,629 | 85,744 |
| Trading\tliabilities\t–\tdebt\tand\tequity\tinstruments (a) | 84,707 | 77,706 | 69,001 |
| Trading\tliabilities\t–\tderivative\tpayables | 54,758 | 64,553 | 76,162 |

(a) Primarily	represent	securities	sold,	not	yet	purchased.

# 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	not	previously	carried	at	fair	value.

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	(for	example,	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	has	elected	to	measure	the	following	instruments	at	fair	value: •Loans	purchased	or	originated	as	part	of	securitization	warehousing	activity, subject	to	bifurcation	accounting,	or	managed	on	a	fair	value	basis. •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.)

•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,	2014,	2013	and	2012,	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.

|  |  | 2014 | 2014 |  |  | 2013 | 2013 |  |  | 2012 | 2012 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  | Total\tchanges |  |  |  | Total\tchanges |  |  |  | Total\tchanges |
| December\t31,\t(in\tmillions) | Principal\ntransactions | All\tother\tincome | 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 | $(15) | $— |  | $(15) | $(454) | $— |  | $(454) | $161 | $— |  | $161 |
| Securities\tborrowed | (10) | — |  | (10) | 10 | — |  | 10 | 10 | — |  | 10 |
| Trading\tassets: |  |  |  |  |  |  |  | — |  |  |  | — |
| Debt\tand\tequity\tinstruments,\nexcluding\tloans | 639 | — |  | 639 | 582 | 7 |  | 589 | 513 | 7 |  | 520 |
| Loans\treported\tas\ttrading\tassets: |  |  |  |  |  |  |  |  |  |  |  |  |
| Changes\tin\tinstrument-specific\ncredit\trisk | 885 | 29 | (c) | 914 | 1,161 | 23 | (c) | 1,184 | 1,489 | 81 | (c) | 1,570 |
| Other\tchanges\tin\tfair\tvalue | 352 | 1,353 | (c) | 1,705 | (133) | 1,833 | (c) | 1,700 | (183) | 7,670 | (c) | 7,487 |
| Loans: |  |  |  |  |  |  |  |  |  |  |  |  |
| Changes\tin\tinstrument-specific\tcredit\nrisk | 40 | — |  | 40 | 36 | — |  | 36 | (14) | — |  | (14) |
| Other\tchanges\tin\tfair\tvalue | 34 | — |  | 34 | 17 | — |  | 17 | 676 | — |  | 676 |
| Other\tassets | 24 | (122) | (d) | (98) | 32 | (29) | (d) | 3 | — | (339) | (d) | (339) |
| Deposits(a) | (287) | — |  | (287) | 260 | — |  | 260 | (188) | — |  | (188) |
| Federal\tfunds\tpurchased\tand\tsecurities |  |  |  |  |  |  |  |  |  |  |  |  |
| loaned\tor\tsold\tunder\trepurchase |  |  |  |  |  |  |  |  |  |  |  |  |
| agreements | (33) | — |  | (33) | 73 | — |  | 73 | (25) | — |  | (25) |
| Other\tborrowed\tfunds(a) | (891) | — |  | (891) | (399) | — |  | (399) | 494 | — |  | 494 |
| Trading\tliabilities | (17) | — |  | (17) | (46) | — |  | (46) | (41) | — |  | (41) |
| Beneficial\tinterests\tissued\tby\nconsolidated\tVIEs | (233) | — |  | (233) | (278) | — |  | (278) | (166) | — |  | (166) |
| Other\tliabilities | (27) | — |  | (27) | — | 2 |  | 2 | — | — |  | — |
| Long-term\tdebt: |  |  |  |  |  |  |  |  |  |  |  |  |
| Changes\tin\tinstrument-specific\tcredit\nrisk(a) | 101 | — |  | 101 | (271) | — |  | (271) | (835) | — |  | (835) |
| Other\tchanges\tin\tfair\tvalue(b) | (615) | — |  | (615) | 1,280 | — |  | 1,280 | (1,025) | — |  | (1,025) |

(a) Total	changes	in	instrument-specific	credit	risk	(DVA)	related	to	structured	notes	were	 $20	million,	$(337)	million	and	$(340)	million	for	the	years	ended	 December	31,	2014,	2013	and	2012,	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, 2014	and	2013,	for	loans,	long-term	debt	and	long-term	beneficial	interests	for	which	the	fair	value	option	has	been	elected.

|  |  |  | 2014 |  |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 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 | $3,847 |  | $905 | $(2,942) | $5,156 |  | $1,491 | $(3,665) |
| Loans | 7 |  | 7 | — | 209 |  | 154 | (55) |
| Subtotal | 3,854 |  | 912 | (2,942) | 5,365 |  | 1,645 | (3,720) |
| All\tother\tperforming\tloans |  |  |  |  |  |  |  |  |
| Loans\treported\tas\ttrading\tassets | 37,608 |  | 35,462 | (2,146) | 33,069 |  | 29,295 | (3,774) |
| Loans | 2,397 |  | 2,389 | (8) | 1,618 |  | 1,563 | (55) |
| Total\tloans | $43,859 |  | $38,763 | $(5,096) | $40,052 |  | $32,503 | $(7,549) |
| Long-term\tdebt |  |  |  |  |  |  |  |  |
| Principal-protected\tdebt | $14,660 | (c) | $15,484 | $824 | $15,797 | (c) | $15,909 | $112 |
| Nonprincipal-protected\tdebt(b) | NA |  | 14,742 | NA | NA |  | 12,969 | NA |
| Total\tlong-term\tdebt | NA |  | $30,226 | NA | NA |  | $28,878 | NA |
| Long-term\tbeneficial\tinterests |  |  |  |  |  |  |  |  |
| Nonprincipal-protected\tdebt(b) | NA |  | $2,162 | NA | NA |  | $1,996 | NA |
| Total\tlong-term\tbeneficial\tinterests | NA |  | $2,162 | NA | NA |  | $1,996 | NA |

(a) There	were	no	performing	loans	that	were	ninety	days	or	more	past	due	as	of	December	31,	2014	and	2013,	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	reflected	as	the	remaining	contractual	principal	is	the	final	principal	payment	at	maturity.

At	December	31,	2014	and	2013,	the	contractual	amount	of	letters	of	credit	for	which	the	fair	value	option	was	elected	was	$4.5	billion	and	$4.5	billion,	respectively,	with a	corresponding	fair	value	of	$(147)	million	and	$(99)	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,	2014 | December	31,	2014 |  |  | December	31,	2013 | December	31,	2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | Long-term\ndebt | Other\nborrowed\tfunds | Deposits | Total | Long-term\ndebt | Other\nborrowed\nfunds | Deposits | Total |
| Risk\texposure |  |  |  |  |  |  |  |  |
| Interest\trate | $10,858 | $460 | $2,119 | $13,437 | $9,516 | $615 | $1,270 | $11,401 |
| Credit | 4,023 | 450 | — | 4,473 | 4,248 | 13 | — | 4,261 |
| Foreign\texchange | 2,150 | 211 | 17 | 2,378 | 2,321 | 194 | 27 | 2,542 |
| Equity | 12,348 | 12,412 | 4,415 | 29,175 | 11,082 | 11,936 | 3,736 | 26,754 |
| Commodity | 710 | 644 | 2,012 | 3,366 | 1,260 | 310 | 1,133 | 2,703 |
| Total\tstructured\tnotes | $30,089 | $14,177 | $8,563 | $52,829 | $28,427 | $13,068 | $6,166 | $47,661 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  |  |  |  | 201 |

# 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	concentration	risks	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	risk	concentrations	can	be remedied	through	changes	in	underwriting	policies	and	portfolio	guidelines.	In the	wholesale	portfolio,	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")),	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,	2014	and	2013.

| December	31,	(in	millions) | Credit	exposure | Loans | Derivatives | Off-balance	sheet(d) | Credit	exposure | Loans | Derivatives | Off-balance	sheet(d) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Total\tconsumer,\texcluding\tcredit\tcard | $353,635 | $295,374 | $— | $58,153 | $345,259 | $289,063 | $— | $56,057 |
| Total\tcredit\tcard | 657,011 | 131,048 | — | 525,963 | 657,174 | 127,791 | — | 529,383 |
| Total\tconsumer | 1,010,646 | 426,422 | — | 584,116 | 1,002,433 | 416,854 | — | 585,440 |
| Wholesale-related |  |  |  |  |  |  |  |  |
| Real\tEstate | 107,386 | 79,113 | 333 | 27,940 | 87,102 | 69,151 | 460 | 17,491 |
| Banks\t&amp;\tFinance\tCos | 68,203 | 24,244 | 22,057 | 21,902 | 66,881 | 25,482 | 18,888 | 22,511 |
| Healthcare | 57,707 | 13,793 | 4,630 | 39,284 | 46,934 | 14,383 | 2,203 | 30,348 |
| Oil\t&amp;\tGas | 48,315 | 15,616 | 1,872 | 30,827 | 45,910 | 13,319 | 3,202 | 29,389 |
| Consumer\tProducts | 37,818 | 10,646 | 593 | 26,579 | 35,666 | 8,708 | 3,319 | 23,639 |
| Asset\tManagers | 36,374 | 8,043 | 9,569 | 18,762 | 34,145 | 9,099 | 715 | 24,331 |
| State\t&amp;\tMunicipal\tGovt | 31,858 | 7,593 | 4,079 | 20,186 | 33,506 | 5,656 | 7,175 | 20,675 |
| Retail\t&amp;\tConsumer\tServices | 28,258 | 7,752 | 361 | 20,145 | 28,983 | 5,582 | 2,248 | 21,153 |
| Utilities | 28,060 | 4,843 | 2,317 | 20,900 | 25,068 | 7,504 | 273 | 17,291 |
| Central\tGovt | 21,081 | 1,081 | 11,819 | 8,181 | 21,403 | 4,426 | 1,392 | 15,585 |
| Technology | 20,977 | 4,727 | 1,341 | 14,909 | 21,049 | 1,754 | 9,998 | 9,297 |
| Machinery\t&amp;\tEquipment\tMfg | 20,573 | 6,537 | 553 | 13,483 | 19,078 | 5,969 | 476 | 12,633 |
| Transportation | 16,365 | 9,107 | 699 | 6,559 | 17,434 | 5,825 | 560 | 11,049 |
| Business\tServices | 16,201 | 4,867 | 456 | 10,878 | 14,601 | 4,497 | 594 | 9,510 |
| Metals/Mining | 15,911 | 5,628 | 601 | 9,682 | 13,975 | 6,845 | 621 | 6,509 |
| All\tother(a) | 320,446 | 120,912 | 17,695 | 181,839 | 308,519 | 120,063 | 13,635 | 174,821 |
| Subtotal | 875,533 | 324,502 | 78,975 | 472,056 | 820,254 | 308,263 | 65,759 | 446,232 |
| Loans\theld-for-sale\tand\tloans\tat\tfair\tvalue | 6,412 | 6,412 | — | — | 13,301 | 13,301 | — | — |
| Receivables\tfrom\tcustomers\tand\tother(b) | 28,972 | — | — | — | 26,744 | — | — | — |
| Total\twholesale-related | 910,917 | 330,914 | 78,975 | 472,056 | 860,299 | 321,564 | 65,759 | 446,232 |
| Total\texposure(c) | $1,921,563 | $757,336 | $78,975 | $1,056,172 | $1,862,732 | $738,418 | $65,759 | $1,031,672 |

(a) For	more	information	on	exposures	to	SPEs	included	within	All	other,	see	Note	16.

(b) 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.

(c) 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.

(d) Represents	lending-related	financial	instruments.

# 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	customers	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.	Customers	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	forecasted	revenue	or	expense	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	213–215 of	this	Note.

For	more	information	about	risk	management	derivatives,	see	the	risk management	derivatives	gains	and	losses	table	on	page	213	of	this	Note,	and	the hedge	accounting	gains	and	losses	tables	on	pages	211–213	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	clearinghouses.	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	207–213	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	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	interest-bearing	instruments	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 | 211 |
| :--- | :--- | :--- | :--- | :--- |
| ◦\tInterest\trate | Hedge\tfloating\trate\tassets\tand\tliabilities | Cash\tflow\thedge | Corporate | 212 |
| ◦\tForeign\texchange | Hedge\tforeign\tcurrency-denominated\tassets\tand\tliabilities | Fair\tvalue\thedge | Corporate | 211 |
| ◦\tForeign\texchange | Hedge\tforecasted\trevenue\tand\texpense | Cash\tflow\thedge | Corporate | 212 |
| ◦\tForeign\texchange | Hedge\tthe\tvalue\tof\tthe\tFirm's\tinvestments\tin\tnon-U.S.\tsubsidiaries | Net\tinvestment\thedge | Corporate | 213 |
| ◦\tCommodity | Hedge\tcommodity\tinventory | Fair\tvalue\thedge | CIB | 211 |
| Manage\tspecifically\tidentified\trisk\texposures\tnot\tdesignated\tin\tqualifying\thedge\taccounting\trelationships: |  |  |  |  |
| ◦\tInterest\trate | Manage\tthe\trisk\tof\tthe\tmortgage\tpipeline,\twarehouse\tloans\tand\tMSRs | Specified\trisk\tmanagement | CCB | 213 |
| ◦\tCredit | Manage\tthe\tcredit\trisk\tof\twholesale\tlending\texposures | Specified\trisk\tmanagement | CIB | 213 |
| ◦\tCommodity | Manage\tthe\trisk\tof\tcertain\tcommodities-related\tcontracts\tand\tinvestments | Specified\trisk\tmanagement | CIB | 213 |
| ◦Interest\trate\tand\nforeign\texchange | Manage\tthe\trisk\tof\tcertain\tother\tspecified\tassets\tand\tliabilities | Specified\trisk\tmanagement | Corporate | 213 |
| Market-making\tderivatives\tand\tother\tactivities: |  |  |  |  |
| •\tVarious | Market-making\tand\trelated\trisk\tmanagement | Market-making\tand\tother | CIB | 213 |
| •Other\tderivatives(a) | •Other\tderivatives(a) | Market-making\tand\tother | CIB,\tCorporate | 213 |

(a) Other	derivatives	included	the	synthetic	credit	portfolio.	The	synthetic	credit	portfolio	was	a	portfolio	of	index	credit	derivatives,	including	short	and	long	positions,	that	was	originally	held	by	CIO. On	July	2,	2012,	CIO	transferred	the	synthetic	credit	portfolio,	other	than	a	portion	that	aggregated	to	a	notional	amount	of	approximately	$12	billion,	to	CIB;	these	retained	positions	were effectively	closed	out	during	the	third	quarter	of	2012.	CIB	effectively	sold	the	positions	that	had	been	transferred	to	it	by	the	end	of	2014.	The	results	of	the	synthetic	credit	portfolio,	including	the portion	transferred	to	CIB,	have	been	included	in	the	gains	and	losses	on	derivatives	related	to	market-making	activities	and	other	derivatives	category	discussed	on	page	213	of	this	Note.

# Notional	amount	of	derivative	contracts

The	following	table	summarizes	the	notional	amount	of	derivative	contracts outstanding	as	of	December	31,	2014	and	2013.

|  | Notional	amounts(c) |  |
| :--- | :--- | :--- |
| December\t31,\t(in\tbillions) | 2014 | 2013 |
| Interest\trate\tcontracts |  |  |
| Swaps | $29,734 | $35,221 |
| Futures\tand\tforwards(a) | 10,189 | 11,238 |
| Written\toptions(a) | 3,903 | 4,059 |
| Purchased\toptions | 4,259 | 4,187 |
| Total\tinterest\trate\tcontracts | 48,085 | 54,705 |
| Credit\tderivatives(a)(b) | 4,249 | 5,331 |
| Foreign\texchange\tcontracts |  |  |
| Cross-currency\tswaps | 3,346 | 3,488 |
| Spot,\tfutures\tand\tforwards | 4,669 | 3,773 |
| Written\toptions | 790 | 659 |
| Purchased\toptions | 780 | 652 |
| Total\tforeign\texchange\tcontracts | 9,585 | 8,572 |
| Equity\tcontracts |  |  |
| Swaps(a) | 206 | 187 |
| Futures\tand\tforwards(a) | 50 | 50 |
| Written\toptions | 432 | 425 |
| Purchased\toptions | 375 | 380 |
| Total\tequity\tcontracts | 1,063 | 1,042 |
| Commodity\tcontracts |  |  |
| Swaps | 126 | 124 |
| Spot,\tfutures\tand\tforwards | 193 | 234 |
| Written\toptions | 181 | 202 |
| Purchased\toptions | 180 | 203 |
| Total\tcommodity\tcontracts | 680 | 763 |
| Total\tderivative\tnotional\tamounts | $63,662 | $70,413 |

(a) The	prior	period	amounts	have	been	revised.	This	revision	had	no	impact	on	the	Firm's Consolidated	balance	sheets	or	its	results	of	operations.

(b) For	more	information	on	volumes	and	types	of	credit	derivative	contracts,	see	the	Credit derivatives	discussion	on	pages	213–215	of	this	Note.

(c) 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,	2014	and	2013,	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,\t2014\n(in\tmillions) | Not\tdesignated\tas\nhedges | Designated\tas\nhedges | Total\tderivative\nreceivables | Net\tderivative\nreceivables(b) | Not\tdesignated\tas\nhedges | Designated\tas\nhedges | Total\tderivative\npayables | Net\tderivative\npayables(b) |
| Trading\tassets\tand\tliabilities |  |  |  |  |  |  |  |  |
| Interest\trate | $951,151 | $5,372 | $956,523 | $33,725 | $921,634 | $3,011 | $924,645 | $17,745 |
| Credit | 76,842 | — | 76,842 | 1,838 | 75,895 | — | 75,895 | 1,593 |
| Foreign\texchange | 205,271 | 3,650 | 208,921 | 21,253 | 217,722 | 626 | 218,348 | 22,970 |
| Equity | 46,792 | — | 46,792 | 8,177 | 50,565 | — | 50,565 | 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 | $1,323,207 | $9,524 | $1,332,731 | $78,975 | $1,311,271 | $3,805 | $1,315,076 | $71,116 |

|  |  | Gross	derivative	receivables |  |  |  | Gross	derivative	payables |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2013\n(in\tmillions) | Not\tdesignated\tas\nhedges | Designated\tas\nhedges | Total\tderivative\nreceivables | Net\tderivative\nreceivables(b) | Not\tdesignated\tas\nhedges | Designated\tas\nhedges | Total\tderivative\npayables | Net\tderivative\npayables(b) |
| Trading\tassets\tand\tliabilities |  |  |  |  |  |  |  |  |
| Interest\trate | $851,189 | $3,490 | $854,679 | $25,782 | $820,811 | $4,543 | $825,354 | $13,283 |
| Credit | 83,520 | — | 83,520 | 1,516 | 82,402 | — | 82,402 | 2,281 |
| Foreign\texchange | 152,240 | 1,359 | 153,599 | 16,790 | 158,728 | 1,397 | 160,125 | 15,947 |
| Equity | 52,931 | — | 52,931 | 12,227 | 54,654 | — | 54,654 | 14,719 |
| Commodity | 34,344 | 1,394 | 35,738 | 9,444 | 37,605 | 9 | 37,614 | 11,084 |
| Total\tfair\tvalue\tof\ttrading\tassets\tand\nliabilities | $1,174,224 | $6,243 | $1,180,467 | $65,759 | $1,154,200 | $5,949 | $1,160,149 | $57,314 |

(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.

The	following	table	presents,	as	of	December	31,	2014	and	2013,	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.

|  |  | 2014 |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tderivative\nreceivables | Amounts\tnetted\ton\tthe\nConsolidated\tbalance\nsheets | 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 | $548,373 | $(521,180) | $27,193 | $486,449 | $(466,493) | $19,956 |
| OTC–cleared | 401,656 | (401,618) | 38 | 362,426 | (362,404) | 22 |
| Exchange-traded(a) | — | — | — | — | — | — |
| Total\tinterest\trate\tcontracts | 950,029 | (922,798) | 27,231 | 848,875 | (828,897) | 19,978 |
| Credit\tcontracts: |  |  |  |  |  |  |
| OTC | 66,636 | (65,720) | 916 | 66,269 | (65,725) | 544 |
| OTC–cleared | 9,320 | (9,284) | 36 | 16,841 | (16,279) | 562 |
| Total\tcredit\tcontracts | 75,956 | (75,004) | 952 | 83,110 | (82,004) | 1,106 |
| Foreign\texchange\tcontracts: |  |  |  |  |  |  |
| OTC | 202,537 | (187,634) | 14,903 | 148,953 | (136,763) | 12,190 |
| OTC–cleared | 36 | (34) | 2 | 46 | (46) | — |
| Exchange-traded(a) | — | — | — | — | — | — |
| Total\tforeign\texchange\tcontracts | 202,573 | (187,668) | 14,905 | 148,999 | (136,809) | 12,190 |
| Equity\tcontracts: |  |  |  |  |  |  |
| OTC | 23,258 | (22,826) | 432 | 31,870 | (29,289) | 2,581 |
| OTC–cleared | — | — | — | — | — | — |
| Exchange-traded(a) | 18,143 | (15,789) | 2,354 | 17,732 | (11,415) | 6,317 |
| Total\tequity\tcontracts | 41,401 | (38,615) | 2,786 | 49,602 | (40,704) | 8,898 |
| Commodity\tcontracts: |  |  |  |  |  |  |
| OTC | 22,555 | (14,327) | 8,228 | 21,619 | (15,082) | 6,537 |
| OTC–cleared | — | — | — | — | — | — |
| Exchange-traded(a) | 19,500 | (15,344) | 4,156 | 12,528 | (11,212) | 1,316 |
| Total\tcommodity\tcontracts | 42,055 | (29,671) | 12,384 | 34,147 | (26,294) | 7,853 |
| Derivative\treceivables\twith\tappropriate\tlegal\topinion | $1,312,014 | (b)\n$(1,253,756) | $58,258 | $1,164,733 | (b)\n$(1,114,708) | $50,025 |
| Derivative\treceivables\twhere\tan\tappropriate\tlegal\topinion\nhas\tnot\tbeen\teither\tsought\tor\tobtained | 20,717 |  | 20,717 | 15,734 |  | 15,734 |
| Total\tderivative\treceivables\trecognized\ton\tthe\tConsolidated\nbalance\tsheets | $1,332,731 |  | $78,975 | $1,180,467 |  | $65,759 |

(a) Exchange-traded	derivative	amounts	that	relate	to	futures	contracts	are	settled	daily.

The	following	table	presents,	as	of	December	31,	2014	and	2013,	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.

|  |  | 2014 |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tderivative\npayables | Amounts\tnetted\ton\tthe\nConsolidated\tbalance\nsheets | 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 | $522,170 | $(509,650) | $12,520 | $467,850 | $(458,081) | $9,769 |
| OTC–cleared | 398,518 | (397,250) | 1,268 | 354,698 | (353,990) | 708 |
| Exchange-traded(a) | — | — | — | — | — | — |
| Total\tinterest\trate\tcontracts | 920,688 | (906,900) | 13,788 | 822,548 | (812,071) | 10,477 |
| Credit\tcontracts: |  |  |  |  |  |  |
| OTC | 65,432 | (64,904) | 528 | 65,223 | (63,671) | 1,552 |
| OTC–cleared | 9,398 | (9,398) | — | 16,506 | (16,450) | 56 |
| Total\tcredit\tcontracts | 74,830 | (74,302) | 528 | 81,729 | (80,121) | 1,608 |
| Foreign\texchange\tcontracts: |  |  |  |  |  |  |
| OTC | 211,732 | (195,312) | 16,420 | 155,110 | (144,119) | 10,991 |
| OTC–cleared | 66 | (66) | — | 61 | (59) | 2 |
| Exchange-traded(a) | — | — | — | — | — | — |
| Total\tforeign\texchange\tcontracts | 211,798 | (195,378) | 16,420 | 155,171 | (144,178) | 10,993 |
| Equity\tcontracts: |  |  |  |  |  |  |
| OTC | 27,908 | (23,036) | 4,872 | 33,295 | (28,520) | 4,775 |
| OTC–cleared | — | — | — | — | — | — |
| Exchange-traded(a) | 17,167 | (15,789) | 1,378 | 17,349 | (11,415) | 5,934 |
| Total\tequity\tcontracts | 45,075 | (38,825) | 6,250 | 50,644 | (39,935) | 10,709 |
| Commodity\tcontracts: |  |  |  |  |  |  |
| OTC | 25,129 | (13,211) | 11,918 | 21,993 | (15,318) | 6,675 |
| OTC–cleared | — | — | — | — | — | — |
| Exchange-traded(a) | 18,486 | (15,344) | 3,142 | 12,367 | (11,212) | 1,155 |
| Total\tcommodity\tcontracts | 43,615 | (28,555) | 15,060 | 34,360 | (26,530) | 7,830 |
| Derivative\tpayables\twith\tappropriate\tlegal\topinions | $1,296,006 | (b)\n$(1,243,960) | $52,046 | $1,144,452 | (b)\n$(1,102,835) | $41,617 |
| Derivative\tpayables\twhere\tan\tappropriate\tlegal\topinion\thas\nnot\tbeen\teither\tsought\tor\tobtained | 19,070 |  | 19,070 | 15,697 |  | 15,697 |
| Total\tderivative\tpayables\trecognized\ton\tthe\tConsolidated\nbalance\tsheets | $1,315,076 |  | $71,116 | $1,160,149 |  | $57,314 |

(a) Exchange-traded	derivative	balances	that	relate	to	futures	contracts	are	settled	daily.

(b) Included	cash	collateral	netted	of	$64.2	billion	and	$52.1	billion	related	to	OTC	and	OTC-cleared	derivatives	at	December	31,	2014,	and	2013,	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	is comprised	of

non-cash	financial	instruments	(generally	U.S.	government	and	agency	securities and	other	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,	2014	and	2013,	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	payable	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,	2014	and	2013.

# OTC	and	OTC-cleared	derivative	payables	containing	downgrade	triggers

| December	31,	(in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Aggregate\tfair\tvalue\tof\tnet\tderivative\tpayables | $32,303 | $24,631 |
| Collateral\tposted | 27,585 | 20,346 |

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,	2014	and	2013,	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,	or	termination	payment requirements.	The	liquidity	impact	in	the	table	is	calculated	based	upon	a downgrade	below	the	lowest	current	rating	of	the	rating	agencies	referred	to	in the	derivative	contract.

# Liquidity	impact	of	downgrade	triggers	on	OTC	and

# OTC-cleared	derivatives

|  |  |  | 2014 | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 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 |
|  |  | $1,046 | $3,331 | $952 | $3,244 |
| Amount\trequired\tto\tsettle\tcontracts\twith\ttermination\ttriggers\tupon\tdowngrade | (b) |  |  |  |  |
|  |  | 366 | 1,388 | 540 | 876 |

(a) Includes	the	additional	collateral	to	be	posted	for	initial	margin.

(b) Amounts	represent	fair	value	of	derivative	payables,	and	do	not	reflect	collateral	posted.

# 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,	2014,	2013	and	2012,	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,\t2014\t(in\tmillions) | Derivatives | Hedged\titems | Total\tincome\nstatement\timpact | 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\timpact | 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 |

|  |  | Gains/(losses)	recorded	in	income |  | Income	statement	impact	due	to: | Income	statement	impact	due	to: |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2012\t(in\tmillions) | Derivatives Hedged\titems | Derivatives Hedged\titems | Total\tincome\nstatement\timpact | Hedge\tineffectiveness(d) | Excluded\ncomponents(e) |
| Contract\ttype |  |  |  |  |  |
| Interest\trate(a) | $(1,238) | $1,879 | $641 | $(28) | $669 |
| Foreign\texchange(b) | (3,027) | 2,925 | (102) | — | (102) |
| Commodity(c) | (2,530) | 1,131 | (1,399) | 107 | (1,506) |
| Total | $(6,795) | $5,935 | $(860) | $79 | $(939) |

(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.	The	current	presentation	excludes	accrued	interest.

(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	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,	2014,	2013	and	2012,	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) | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss) | (c) |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2014\n(in\tmillions) | Derivatives\t–\teffective\nportion\treclassified\tfrom\nAOCI\tto\tincome | Hedge\tineffectiveness\nrecorded\tdirectly\tin\tincome(d) | Total\tincome\tstatement\nimpact | Derivatives\t–\teffective\nportion\trecorded\tin\nOCI | 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) | (c) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2013\n(in\tmillions) | Derivatives\t–\teffective\nportion\treclassified\nfrom\tAOCI\tto\tincome | Hedge\tineffectiveness\nrecorded\tdirectly\tin\nincome(d) | 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) |

|  |  | 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) | (c) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2012\n(in\tmillions) | Derivatives\t–\teffective\nportion\treclassified\nfrom\tAOCI\tto\tincome | Hedge\tineffectiveness\nrecorded\tdirectly\tin\nincome(d) | Total\tincome\tstatement\nimpact | Derivatives\t–\neffective\tportion\nrecorded\tin\tOCI |  | Total\tchange\nin\tOCI\nfor\tperiod |
| Contract\ttype |  |  |  |  |  |  |
| Interest\trate(a) | $(3) | $5 | $2 | $13 |  | $16 |
| Foreign\texchange(b) | 31 | — | 31 | 128 |  | 97 |
| Total | $28 | $5 | $33 | $141 |  | $113 |

(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.

(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) The	Firm	did	not	experience	any	forecasted	transactions	that	failed	to	occur	for	the	years	ended	 December	31,	2014,	2013	or	2012.

(d) 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.

Over	the	next	12	months,	the	Firm	expects	that	$33	million	(after-tax)	of	net	losses	recorded	in	AOCI	at	December	31,	2014,	related	to	cash	flow	hedges	will	be recognized	in	income.	The	maximum	length	of	time	over	which	forecasted	transactions	are	hedged	is	9	years,	and	such	transactions	primarily	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,	2014,	2013	and	2012.

|  | 2014 | 2014 | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss)<br>2013 | Gains/(losses)	recorded	in	income	and	other	comprehensive	income/(loss)<br>2013 | 2012 | 2012 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\n(in\tmillions) | Excluded\ncomponents\trecorded\ndirectly\tin\tincome(a) | Effective\tportion\nrecorded\tin\tOCI | Excluded\ncomponents\trecorded\ndirectly\tin\tincome(a) | Effective\tportion\nrecorded\tin\tOCI | Excluded\ncomponents\nrecorded\tdirectly\tin\nincome(a) | Effective\tportion\nrecorded\tin\tOCI |
| Foreign\texchange\tderivatives | $(448) | $1,698 | $(383) | $773 | $(306) | $(82) |

(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	current-period	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	2014,	2013	and	2012.

# 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 liabilities,	and	commodities-related	contracts	and	investments.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Contract\ttype |  |  |  |
| Interest\trate(a) | $2,308 | $617 | $5,353 |
| Credit(b) | (58) | (142) | (175) |
| Foreign\texchange(c) | (7) | 1 | 47 |
| Commodity(d) | 156 | 178 | 94 |
| Total | $2,399 | $654 | $5,319 |

(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	typically	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	comprises	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	experiences	a	specified	credit	event	(or	one	of	the	entities	that makes	up	a	reference	index).	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.	For	a	further	discussion	of credit-related	notes,	see	Note	16.

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,	2014	and	2013.	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,	2014	(in	millions) | Protection	sold | Protection	purchased	with<br>identical	underlyings(c) | Net	protection<br>(sold)/purchased(d) | Other	protection<br>purchased(e) |
| :--- | :--- | :--- | :--- | :--- |
| 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 |

| December	31,	2013	(in	millions) | Protection	sold |  | Protection	purchased	with<br>identical	underlyings(c) | Net	protection<br>(sold)/purchased(d) | Other	protection<br>purchased(e) |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Credit\tderivatives |  |  |  |  |  |
| Credit\tdefault\tswaps | $(2,601,581) |  | $2,610,198 | $8,617 | $8,722 |
| Other\tcredit\tderivatives(a) | (44,137) | (b) | 45,921 | 1,784 | 20,480 |
| Total\tcredit\tderivatives | (2,645,718) |  | 2,656,119 | 10,401 | 29,202 |
| Credit-related\tnotes | (130) |  | — | (130) | 2,720 |
| Total | $(2,645,848) |  | $2,656,119 | $10,271 | $31,922 |

(a) Other	credit	derivatives	predominantly	consists	of	credit	swap options.

(b) The	prior	period	amounts	have	been	revised.	This	revision	had	no	impact	on	the	Firm's	Consolidated	balance	sheets	or	its	results	of operations.

(c) 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.

(d) 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.

(e) 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	as	of	December	31,	2014	and	2013, 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,	2014 |  |  |  |  |  |  | Total	notional |  | Fair	value	of |  | Fair	value	of |  | Net	fair |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions) | &lt;1\tyear |  | 1–5\tyears |  | &gt;5\tyears |  | amount |  | receivables(c) |  | payables(c) |  | 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 |
| December\t31,\t2013 |  |  |  |  |  |  | Total\tnotional |  | Fair\tvalue\tof |  | Fair\tvalue\tof |  | Net\tfair |
| (in\tmillions) | &lt;1\tyear |  | 1–5\tyears |  | &gt;5\tyears |  | amount |  | receivables(c) |  | payables(c) |  | value |
| Risk\trating\tof\treference\tentity |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Investment-grade | $(368,712) | (b) | $(1,469,773) | (b) | $(93,209) | (b) | $(1,931,694) | (b) | $31,730 | (b) | $(5,664) | (b) | $26,066 |
| Noninvestment-grade | (140,540) |  | (544,671) |  | (28,943) |  | (714,154) |  | 27,426 |  | (16,674) |  | 10,752 |
| Total | $(509,252) |  | $(2,014,444) |  | $(122,152) |  | $(2,645,848) |  | $59,156 |  | $(22,338) |  | $36,818 |

(a) The	ratings	scale	is	primarily	based	on	external	credit	ratings	defined	by	S&P	and	Moody's.

(c) 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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Underwriting |  |  |  |
| Equity | $1,571 | $1,499 | $1,026 |
| Debt | 3,340 | 3,537 | 3,290 |
| Total\tunderwriting | 4,911 | 5,036 | 4,316 |
| Advisory | 1,631 | 1,318 | 1,492 |
| Total\tinvestment\tbanking\tfees | $6,542 | $6,354 | $5,808 |

# 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)	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,	including	the	synthetic	credit	portfolio.	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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Trading\trevenue\tby\tinstrument\ttype\t(a) |  |  |  |
| Interest\trate(b) | $1,362 | $284 | $4,002 |
| Credit(c) | 1,880 | 2,654 | (4,975) |
| Foreign\texchange | 1,556 | 1,801 | 918 |
| Equity | 2,563 | 2,517 | 2,455 |
| Commodity(d) | 1,663 | 2,083 | 2,365 |
| Total\ttrading\trevenue(e) | 9,024 | 9,339 | 4,765 |
| Private\tequity\tgains(f) | 1,507 | 802 | 771 |
| Principal\ttransactions | $10,531 | $10,141 | $5,536 |

(a) Prior	to	the	second	quarter	of	2014,	trading	revenue	was	presented	by	major	underlying	type	of	risk exposure,	generally	determined	based	upon	the	business	primarily	responsible	for	managing	that	risk exposure.	Prior	period	amounts	have	been	revised	to	conform	with	the	current	period	presentation. This	revision	had	no	impact	on	the	Firm's	Consolidated	balance	sheets	or	results	of	operations.

(b) Includes	a	pretax	gain	of	$665	million	for	the	year	ended	December	31,	2012,	reflecting	the	recovery on	a	Bear	Stearns-related	subordinated	loan.

(c) Includes	$5.8	billion	of	losses	incurred	by	CIO	from	the	synthetic	credit	portfolio	for	the	six	months ended	June	30,	2012,	and	$449	million	of	losses	incurred	by	CIO	from	the	retained	index	credit derivative	positions	for	the	three	months	ended	September	30,	2012;	and	losses	incurred	by	CIB	from the	synthetic	credit	portfolio.

(d) 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.

(e) During	2013,	the	Firm	implemented	a	FVA	framework	in	order	to	incorporate	the	impact	of	funding into	its	valuation	estimates	for	OTC	derivatives	and	structured	notes.	As	a	result,	the	Firm	recorded	a $1.5	billion	loss	in	principal	transactions	revenue	in	2013,	reported	in	the	CIB.	This	reflected	an industry	migration	towards	incorporating	the	cost	of	unsecured	funding	in	the	valuation	of	such instruments.

(f) 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	components	of	asset	management,	administration and	commissions.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Asset\tmanagement\tfees |  |  |  |
| Investment\tmanagement\tfees(a) | $9,169 | $8,044 | $6,744 |
| All\tother\tasset\tmanagement\tfees(b) | 477 | 505 | 357 |
| Total\tasset\tmanagement\tfees | 9,646 | 8,549 | 7,101 |
| Total\tadministration\tfees(c) | 2,179 | 2,101 | 2,135 |
| Commissions\tand\tother\tfees |  |  |  |
| Brokerage\tcommissions | 2,270 | 2,321 | 2,331 |
| All\tother\tcommissions\tand\tfees | 1,836 | 2,135 | 2,301 |
| Total\tcommissions\tand\tfees | 4,106 | 4,456 | 4,632 |
| Total\tasset\tmanagement,\tadministration\nand\tcommissions | $15,931 | $15,106 | $13,868 |

(a) Represents	fees	earned	from	managing	assets	on	behalf	of	Firm	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	Production	and Mortgage	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,	charge	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

Included	in	other	income	is	operating	lease	income	of	$1.7	billion,	$1.5	billion and	$1.3	billion	for	the	years	ended	December	31,	2014,	2013	and	2012, respectively.	Additionally,	included	in	other	income	for	the	year	ended December	31,	2013,	is	a	net	pretax	gain	of	approximately	$1.3	billion,	from	the sale	of	Visa	B	Shares.

# 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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Interest\tincome |  |  |  |
| Loans | $32,218 | $33,489 | $35,832 |
| Taxable\tsecurities | 7,617 | 6,916 | 7,231 |
| Non-taxable\tsecurities(a) | 1,423 | 896 | 708 |
| Total\tsecurities | 9,040 | 7,812 | 7,939 |
| Trading\tassets(b) | 7,312 | 8,099 | 8,929 |
| Federal\tfunds\tsold\tand\tsecurities |  |  |  |
| purchased\tunder\tresale |  |  |  |
| agreements | 1,642 | 1,940 | 2,442 |
| Securities\tborrowed\t(c) | (501) | (127) | (3) |
| Deposits\twith\tbanks | 1,157 | 918 | 555 |
| Other\tassets(d) | 663 | 538 | 259 |
| Total\tinterest\tincome(b) | 51,531 | 52,669 | 55,953 |
| Interest\texpense |  |  |  |
| Interest-bearing\tdeposits | 1,633 | 2,067 | 2,655 |
| Short-term\tand\tother\tliabilities(b) |  |  |  |
| (e) | 1,450 | 1,798 | 1,678 |
| Long-term\tdebt | 4,409 | 5,007 | 6,062 |
| Beneficial\tinterests\tissued\tby\nconsolidated\tVIEs | 405 | 478 | 648 |
| Total\tinterest\texpense(b) | 7,897 | 9,350 | 11,043 |
| Net\tinterest\tincome | 43,634 | 43,319 | 44,910 |
| Provision\tfor\tcredit\tlosses | 3,139 | 225 | 3,385 |
| Net\tinterest\tincome\tafter\nprovision\tfor\tcredit\tlosses | $40,495 | $43,094 | $41,525 |

(a) Represents	securities	which	are	tax	exempt	for	U.S.	Federal	Income	Tax	purposes. (b) Prior	period	amounts	have	been	reclassified	to	conform	with	the	current	period	presentation. (c) Negative	interest	income	for	the	years	ended	December	31,	2014,	2013	and	2012,	is	a	result of	increased	client-driven	demand	for	certain	securities	combined	with	the	impact	of	low interest	rates;	the	offset	of	this	matched	book	activity	is	reflected	as	lower	net	interest expense	reported	within	short-term	and	other	liabilities.

(d) Largely	margin	loans.

(e) Includes	brokerage	customer	payables.

# Note	9	–	Pension	and	other	postretirement	employee	benefit plans

The	Firm's	defined	benefit	pension	plans	and	its	other	postretirement	employee benefit	("OPEB")	plans	are	accounted	for	in	accordance	with	U.S.	GAAP	for retirement	benefits.

# 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	pay	capped	at	$100,000	annually;	effective	January 1,	2015,	in	addition	to	base	pay,	eligible	compensation	will	include	certain	other types	of	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	2015.	The	2015 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	$257	million	and	$245	million,	at December	31,	2014	and	2013,	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	pay;	effective	January	1,	2015,	in	addition	to	base pay,	eligible	compensation	will	include	certain	other	types	of	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 for	employees	hired	on	or	after	May	1,	2009.	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.	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) | 2014 | 2013 |  | 2014 | 2013 | 2014 | 2013 |
| Change\tin\tbenefit\tobligation |  |  |  |  |  |  |  |
| Benefit\tobligation,\tbeginning\tof\tyear | $(10,776) | $(11,478) |  | $(3,433) | $(3,243) | $(826) | $(990) |
| Benefits\tearned\tduring\tthe\tyear | (281) | (314) |  | (33) | (34) | — | (1) |
| Interest\tcost\ton\tbenefit\tobligations | (534) | (447) |  | (137) | (125) | (38) | (35) |
| Plan\tamendments | (53) | — |  | — | — | — | — |
| Special\ttermination\tbenefits | — | — |  | (1) | — | — | — |
| Curtailments | — | — |  | — | — | (3) | — |
| Employee\tcontributions | NA | NA |  | (7) | (7) | (62) | (72) |
| Net\tgain/(loss) | (1,669) | 794 |  | (408) | (62) | (58) | 138 |
| Benefits\tpaid | 777 | 669 |  | 119 | 106 | 145 | 144 |
| Expected\tMedicare\tPart\tD\tsubsidy\treceipts | NA | NA |  | NA | NA | (2) | (10) |
| Foreign\texchange\timpact\tand\tother | — | — |  | 260 | (68) | 2 | — |
| Benefit\tobligation,\tend\tof\tyear | $(12,536) | $(10,776) |  | $(3,640) | $(3,433) | $(842) | $(826) |
| Change\tin\tplan\tassets |  |  |  |  |  |  |  |
| Fair\tvalue\tof\tplan\tassets,\tbeginning\tof\tyear | $14,354 | $13,012 |  | $3,532 | $3,330 | $1,757 | $1,563 |
| Actual\treturn\ton\tplan\tassets | 1,010 | 1,979 |  | 518 | 187 | 159 | 211 |
| Firm\tcontributions | 36 | 32 |  | 46 | 45 | 3 | 2 |
| Employee\tcontributions | — | — |  | 7 | 7 | — | — |
| Benefits\tpaid | (777) | (669) |  | (119) | (106) | (16) | (19) |
| Foreign\texchange\timpact\tand\tother | — | — |  | (266) | 69 | — | — |
| Fair\tvalue\tof\tplan\tassets,\tend\tof\tyear | $14,623 | $14,354 | (b)(c) | $3,718 | $3,532 | $1,903 | $1,757 |
| Net\tfunded\tstatus(a) | $2,087 | $3,578 |  | $78 | $99 | $1,061 | $931 |
| Accumulated\tbenefit\tobligation,\tend\tof\tyear | $(12,375) | $(10,685) |  | $(3,615) | $(3,406) | NA | NA |

(a) Represents	plans	with	an	aggregate	overfunded	balance	of	 $3.9	billion	and	$5.1	billion	at	December	31,	2014	and	2013,	respectively,	and	plans	with	an	aggregate	underfunded	balance	of $708	million	and	$540	million	at	December	31,	2014	and	2013,	respectively.

(b) At	December	31,	2014	and	2013,	approximately	$336	million	and	$429	million,	respectively,	of	U.S.	plan	assets	included	participation	rights	under	participating	annuity	contracts.

(c) At	December	31,	2014	and	2013,	defined	benefit	pension	plan	amounts	not	measured	at	fair	value	included	 $106	million	and	$96	million,	respectively,	of	accrued	receivables,	and	$257	million	and $104	million,	respectively,	of	accrued	liabilities,	for	U.S.	plans.

(d) Includes	an	unfunded	accumulated	postretirement	benefit	obligation	of	 $37	million	and	$34	million	at	December	31,	2014	and	2013,	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.	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.	The	average remaining	amortization	period	for	current	prior	service	costs	is	five	years.

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	twelve	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	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) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Net\tgain/(loss) | $(3,346) | $(1,726) | $(628) | $(658) | $130 | $125 |
| Prior\tservice\tcredit/(cost) | 102 | 196 | 11 | 14 | — | 1 |
| Accumulated\tother\tcomprehensive\tincome/(loss),\tpretax,\tend\tof\tyear | $(3,244) | $(1,530) | $(617) | $(644) | $130 | $126 |

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) | 2014 | 2013 | 2012 | 2014 |  | 2013 |  | 2012 |  | 2014 | 2013 | 2012 |
| Components\tof\tnet\tperiodic\tbenefit\tcost |  |  |  |  |  |  |  |  |  |  |  |  |
| Benefits\tearned\tduring\tthe\tyear | $281 | $314 | $272 | $33 |  | $34 |  | $41 |  | $— | $1 | $1 |
| Interest\tcost\ton\tbenefit\tobligations | 534 | 447 | 466 | 137 |  | 125 |  | 126 |  | 38 | 35 | 44 |
| Expected\treturn\ton\tplan\tassets | (985) | (956) | (861) | (172) |  | (142) |  | (137) |  | (101) | (92) | (90) |
| Amortization: |  |  |  |  |  |  |  |  |  |  |  |  |
| Net\t(gain)/loss | 25 | 271 | 289 | 47 |  | 49 |  | 36 |  | — | 1 | (1) |
| Prior\tservice\tcost/(credit) | (41) | (41) | (41) | (2) |  | (2) |  | — |  | (1) | — | — |
| Net\tperiodic\tdefined\tbenefit\tcost | (186) | 35 | 125 | 43 |  | 64 |  | 66 |  | (64) | (55) | (46) |
| Other\tdefined\tbenefit\tpension\tplans(a) | 14 | 15 | 15 | 6 |  | 14 |  | 8 |  | NA | NA | NA |
| Total\tdefined\tbenefit\tplans | (172) | 50 | 140 | 49 |  | 78 |  | 74 |  | (64) | (55) | (46) |
| Total\tdefined\tcontribution\tplans | 438 | 447 | 409 | 329 |  | 321 |  | 302 |  | NA | NA | NA |
| Total\tpension\tand\tOPEB\tcost\tincluded\tin\tcompensation\texpense | $266 | $497 | $549 | $378 |  | $399 |  | $376 |  | $(64) | $(55) | $(46) |
| Changes\tin\tplan\tassets\tand\tbenefit\tobligations\trecognized\tin\tother\ncomprehensive\tincome |  |  |  |  |  |  |  |  |  |  |  |  |
| Net\t(gain)/loss\tarising\tduring\tthe\tyear | $1,645 | $(1,817) | $434 | $57 |  | $19 |  | $146 |  | $(5) | $(257) | $(43) |
| Prior\tservice\tcredit\tarising\tduring\tthe\tyear | 53 | — | — | — |  | — |  | (6) |  | — | — | — |
| Amortization\tof\tnet\tloss | (25) | (271) | (289) | (47) |  | (49) |  | (36) |  | — | (1) | 1 |
| Amortization\tof\tprior\tservice\t(cost)/credit | 41 | 41 | 41 | 2 |  | 2 |  | — |  | 1 | — | — |
| Foreign\texchange\timpact\tand\tother | — | — | — | (39) | (a) | 14 | (a) | 22 | (a) | — | — | (1) |
| Total\trecognized\tin\tother\tcomprehensive\tincome | $1,714 | $(2,047) | $186 | $(27) |  | $(14) |  | $126 |  | $(4) | $(258) | $(43) |
| Total\trecognized\tin\tnet\tperiodic\tbenefit\tcost\tand\tother\tcomprehensive\nincome | $1,528 | $(2,012) | $311 | $16 |  | $50 |  | $192 |  | $(68) | $(313) | $(89) |

(a) Includes	various	defined	benefit	pension	plans	which	are	individually	immaterial.

The	estimated	pretax	amounts	that	will	be	amortized	from	AOCI	into	net	periodic	benefit	cost	in	2015	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) | $257 | $37 | $— | $— |
| Prior\tservice\tcost/(credit) | (34) | (2) | — | — |
| Total | $223 | $35 | $— | $— |

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, | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Actual\trate\tof\treturn: |  |  |  |  |  |  |
| Defined\tbenefit\tpension\tplans | 7.29% | 15.95% | 12.66% | 5.62\t-\t17.69% | 3.74\t-\t23.80% | 7.21\t-\t11.72% |
| OPEB\tplans | 9.84 | 13.88 | 10.10 | 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	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.	The	Firm	has	adopted	the	SOA's	tables	and	projection	scale, resulting	in	an	estimated	increase	in	PBO	of	$533	million.

At	December	31,	2014,	the	Firm	decreased	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	an	increase	in	expense	of approximately	$139	million	for	2015.	The	2015	expected	long-term	rate	of	return on	U.S.	defined	benefit	pension	plan	assets	and	U.S.	OPEB	plan	assets	are	6.50% and	6.00%,	respectively.	For	2015,	the	initial	health	care	benefit	obligation	trend assumption	has	been	set	at	6.00%,	and	the	ultimate	health	care	trend	assumption and	the	year	to	reach	the	ultimate	rate	remains	at	5.00%	and	2017,	respectively, unchanged	from	2014.	As	of	December	31,	2014,	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,	2014,	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	$40	million	in	2015	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	2015	U.S.	defined	benefit	pension	and	OPEB plan	expense	of	approximately	an	aggregate	$36	million	and	an	increase	in	the related	benefit	obligations	of	approximately	an	aggregate	$333	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	2015	U.S.	defined	benefit	pension expense	of	approximately	$36	million	and	a	decrease	in	the	related	PBO	of approximately	$148	million.	A	25-basis	point	decline	in	the	discount	rates	for	the non-U.S.	plans	would	result	in	an	increase	in	the	2015	non-U.S.	defined	benefit pension	plan	expense	of	approximately	$19	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	portfolio	is	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,	2014,	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	$3.7	billion	and	$2.9	billion	for	U.S.	plans	and	$1.4	billion	and $242	million	for	non-U.S.	plans,	as	of	December	31,	2014	and	2013,	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 | 2014 | 2013 | Allocation | 2014 | 2013 | Allocation | 2014 | 2013 |
| Asset\tcategory |  |  |  |  |  |  |  |  |  |
| Debt\tsecurities(a) | 0-80% | 31% | 25% | 62% | 61% | 63% | 30-70% | 50% | 50% |
| Equity\tsecurities | 0-85 | 46 | 48 | 37 | 38 | 36 | 30-70 | 50 | 50 |
| Real\testate | 0-10 | 4 | 4 | — | — | — | — | — | — |
| Alternatives(b) | 0-35 | 19 | 23 | 1 | 1 | 1 | — | — | — |
| Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| (a) |  |  |  |  |  |  |  |  |  |
| (b) | Alternatives\tprimarily\tinclude\tlimited\tpartnerships. |  |  |  |  |  |  |  |  |
| (c) |  |  |  |  |  |  |  |  |  |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  |  |  |  |  | 223 |

(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 (i) | Non-U.S.	defined	benefit	pension	plans (i) | Non-U.S.	defined	benefit	pension	plans (i) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2014 |  |  |  | Total\tfair |  |  |  | Total\tfair |
| (in\tmillions) | Level\t1 | Level\t2 | Level\t3 | value |  | Level\t1 | Level\t2 | value |
| Cash\tand\tcash\tequivalents | $87 | $— | $— | $87 |  | $128 | $1 | $129 |
| Equity\tsecurities: |  |  |  |  |  |  |  |  |
| Capital\tequipment | 1,249 | — | — | 1,249 |  | 96 | 24 | 120 |
| Consumer\tgoods | 1,198 | 8 | — | 1,206 |  | 250 | 32 | 282 |
| Banks\tand\tfinance\tcompanies | 778 | 7 | — | 785 |  | 279 | 31 | 310 |
| Business\tservices | 458 | — | — | 458 |  | 277 | 18 | 295 |
| Energy | 267 | — | — | 267 |  | 50 | 15 | 65 |
| Materials | 319 | 1 | — | 320 |  | 40 | 9 | 49 |
| Real\tEstate | 46 | — | — | 46 |  | 1 | — | 1 |
| Other | 971 | 4 | 4 | 979 |  | 26 | 40 | 66 |
| Total\tequity\tsecurities | 5,286 | 20 | 4 | 5,310 |  | 1,019 | 169 | 1,188 |
| Common/collective\ttrust\tfunds(a) | 345 | 1,277 | 8 | 1,630 |  | 112 | 251 | 363 |
| Limited\tpartnerships:(b) |  |  |  |  |  |  |  |  |
| Hedge\tfunds | — | 26 | 77 | 103 |  | — | — | — |
| Private\tequity | — | — | 2,208 | 2,208 |  | — | — | — |
| Real\testate | — | — | 533 | 533 |  | — | — | — |
| Real\tassets(c) | 70 | — | 202 | 272 |  | — | — | — |
| Total\tlimited\tpartnerships | 70 | 26 | 3,020 | 3,116 |  | — | — | — |
| Corporate\tdebt\tsecurities(d) | — | 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(e) | 2,031 | 27 | 337 | 2,395 |  | 283 | 58 | 341 |
| Total\tassets\tmeasured\tat\tfair\tvalue(f) | $8,266 | $3,152 | $3,379 | $14,797 | (g) | $1,779 | $2,078 | $3,857 |
| Derivative\tpayables | $— | $(23) | $— | $(23) |  | $— | $(139) | $(139) |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $— | $(23) | $— | $(23) | (h) | $— | $(139) | $(139) |

|  |  | U.S.	defined	benefit	pension	plans | U.S.	defined	benefit	pension	plans |  |  | Non-U.S.	defined	benefit	pension	plans (i) | Non-U.S.	defined	benefit	pension	plans (i) | Non-U.S.	defined	benefit	pension	plans (i) |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2013\n(in\tmillions) | Level\t1 | Level\t2 | Level\t3 | Total\tfair\nvalue |  | Level\t1 | Level\t2 | Total\tfair\nvalue |
| Cash\tand\tcash\tequivalents | $62 | $— | $— | $62 |  | $221 | $3 | $224 |
| Equity\tsecurities: |  |  |  |  |  |  |  |  |
| Capital\tequipment | 1,084 | — | — | 1,084 |  | 86 | 17 | 103 |
| Consumer\tgoods | 1,085 | — | — | 1,085 |  | 225 | 50 | 275 |
| Banks\tand\tfinance\tcompanies | 737 | — | — | 737 |  | 233 | 29 | 262 |
| Business\tservices | 510 | — | — | 510 |  | 209 | 14 | 223 |
| Energy | 292 | — | — | 292 |  | 64 | 20 | 84 |
| Materials | 344 | — | — | 344 |  | 36 | 9 | 45 |
| Real\testate | 38 | — | — | 38 |  | — | 1 | 1 |
| Other | 1,337 | 18 | 4 | 1,359 |  | 25 | 103 | 128 |
| Total\tequity\tsecurities | 5,427 | 18 | 4 | 5,449 |  | 878 | 243 | 1,121 |
| Common/collective\ttrust\tfunds(a) | — | 1,308 | 4 | 1,312 |  | 98 | 248 | 346 |
| Limited\tpartnerships:(b) |  |  |  |  |  |  |  |  |
| Hedge\tfunds | — | 355 | 718 | 1,073 |  | — | — | — |
| Private\tequity | — | — | 1,969 | 1,969 |  | — | — | — |
| Real\testate | — | — | 558 | 558 |  | — | — | — |
| Real\tassets(c) | — | — | 271 | 271 |  | — | — | — |
| Total\tlimited\tpartnerships | — | 355 | 3,516 | 3,871 |  | — | — | — |
| Corporate\tdebt\tsecurities(d) | — | 1,223 | 7 | 1,230 |  | — | 787 | 787 |
| U.S.\tfederal,\tstate,\tlocal\tand\tnon-U.S.\tgovernment\tdebt\tsecurities | 343 | 299 | — | 642 |  | — | 777 | 777 |
| Mortgage-backed\tsecurities | 37 | 50 | — | 87 |  | 73 | — | 73 |
| Derivative\treceivables | — | 30 | — | 30 |  | — | 302 | 302 |
| Other(e) | 1,214 | 41 | 430 | 1,685 |  | 148 | 52 | 200 |
| Total\tassets\tmeasured\tat\tfair\tvalue(f) | $7,083 | $3,324 | $3,961 | $14,368 | (g) | $1,418 | $2,412 | $3,830 |
| Derivative\tpayables | $— | $(6) | $— | $(6) |  | $— | $(298) | $(298) |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $— | $(6) | $— | $(6) | (h) | $— | $(298) | $(298) |

(a) At	December	31,	2014	and	2013,	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	$1.2	billion	and	$1.6	billion	for	2014	and	2013,	respectively.

(c) 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.

(d) Corporate	debt	securities	include	debt	securities	of	U.S.	and	non-U.S.	corporations.

(e) Other	consists	of	money	markets,	exchange-traded	funds	and	participating	and	non-participating	annuity	contracts.	Money	markets	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.

(f) At	December	31,	2014	and	2013,	the	fair	value	of	investments	valued	at	NAV	were	$2.1	billion	and	$2.7	billion,	respectively,	which	were	classified	within	the	valuation	hierarchy	as	follows: $500	million	and	$100	million	in	level	1,	$1.6	billion	and	$1.9	billion	in	level	2,	zero	and	$700	million	in	level	3.

(g) At	December	31,	2014	and	2013,	excluded	U.S.	defined	benefit	pension	plan	receivables	for	investments	sold	and	dividends	and	interest	receivables	of	 $106	million	and	$96	million,	respectively.

(h) At	December	31,	2014	and	2013,	excluded	$241	million	and	$102	million,	respectively,	of	U.S.	defined	benefit	pension	plan	payables	for	investments	purchased;	and	$ 16	million	and	$2	million, respectively,	of	other	liabilities.

(i) There	were	no	assets	or	liabilities	classified	as	level	3	for	the	non-U.S.	defined	benefit	pension	plans	as	of	Decem ber	31,	2014	and	2013.

The	Firm's	U.S.	OPEB	plan	was	partially	funded	with	COLI	policies	of	$1.9	billion	and	$1.7	billion	at	December	31,	2014	and	2013,	respectively,	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 |  |  | Transfers	in |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2014 | Fair\tvalue, |  | Unrealized | Purchases,\tsales\tand | and/or\tout\tof\tlevel | Fair\tvalue, |
| (in\tmillions) | January\t1,\t2014 | Realized\tgains/(losses) | gains/(losses) | settlements,\tnet | 3 | December\t31,\t2014 |
| U.S.\tdefined\tbenefit\tpension\tplans |  |  |  |  |  |  |
| Equities | $4 | $— | $— | $— | $— | $4 |
| Common/collective\ttrust\tfunds | 4 | — | 1 | 3 | — | 8 |
| Limited\tpartnerships: |  |  |  |  |  |  |
| Hedge\tfunds | 718 | 193 | (180) | (662) | 8 | 77 |
| Private\tequity | 1,969 | 192 | 173 | (126) | — | 2,208 |
| Real\testate | 558 | 29 | 36 | (90) | — | 533 |
| Real\tassets | 271 | 27 | (6) | (90) | — | 202 |
| Total\tlimited\tpartnerships | 3,516 | 441 | 23 | (968) | 8 | 3,020 |
| 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 | $3,961 | $439 | $(67) | $(960) | $6 | $3,379 |
| 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 |
| Common/collective\ttrust\tfunds | 199 | 59 | (32) | (222) | — | 4 |
| Limited\tpartnerships: |  |  |  |  |  |  |
| Hedge\tfunds | 1,166 | 137 | 14 | (593) | (6) | 718 |
| Private\tequity | 1,743 | 108 | 170 | (4) | (48) | 1,969 |
| Real\testate | 467 | 21 | 44 | 26 | — | 558 |
| Real\tassets | 311 | 4 | 12 | (98) | 42 | 271 |
| Total\tlimited\tpartnerships | 3,687 | 270 | 240 | (669) | (12) | 3,516 |
| Corporate\tdebt\tsecurities | 1 | — | — | — | 6 | 7 |
| Mortgage-backed\tsecurities | — | — | — | — | — | — |
| Other | 420 | — | 10 | — | — | 430 |
| Total\tU.S.\tdefined\tbenefit\tpension\tplans | $4,311 | $329 | $218 | $(891) | $(6) | $3,961 |
| OPEB\tplans |  |  |  |  |  |  |
| COLI | $1,554 | $— | $195 | $— | $— | $1,749 |
| Total\tOPEB\tplans | $1,554 | $— | $195 | $— | $— | $1,749 |

|  |  | Actual	return	on	plan	assets | Actual	return	on	plan	assets |  | Transfers	in |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2012 | Fair\tvalue, | Unrealized | Unrealized | Purchases,\tsales\tand | and/or\tout\tof\tlevel | Fair\tvalue, |
| (in\tmillions) | January\t1,\t2012 | Realized\tgains/(losses) | gains/(losses) | settlements,\tnet | 3 | December\t31,\t2012 |
| U.S.\tdefined\tbenefit\tpension\tplans |  |  |  |  |  |  |
| Equities | $1 | $— | $(1) | $— | $4 | $4 |
| Common/collective\ttrust\tfunds | 202 | 2 | 22 | (27) | — | 199 |
| Limited\tpartnerships: |  |  |  |  |  |  |
| Hedge\tfunds | 1,039 | 1 | 71 | 55 | — | 1,166 |
| Private\tequity | 1,367 | 59 | 54 | 263 | — | 1,743 |
| Real\testate | 306 | 16 | 1 | 144 | — | 467 |
| Real\tassets | 264 | — | 10 | 37 | — | 311 |
| Total\tlimited\tpartnerships | 2,976 | 76 | 136 | 499 | — | 3,687 |
| Corporate\tdebt\tsecurities | 2 | — | — | (1) | — | 1 |
| Mortgage-backed\tsecurities | — | — | — | — | — | — |
| Other | 427 | — | (7) | — | — | 420 |
| Total\tU.S.\tdefined\tbenefit\tpension\tplans | $3,608 | $78 | $150 | $471 | $4 | $4,311 |
| OPEB\tplans |  |  |  |  |  |  |
| COLI | $1,427 | $— | $127 | $— | $— | $1,554 |
| Total\tOPEB\tplans | $1,427 | $— | $127 | $— | $— | $1,554 |

# 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 |
| :--- | :--- | :--- | :--- | :--- |
| 2015 | $712 | $110 | $73 | $1 |
| 2016 | 765 | 113 | 71 | 1 |
| 2017 | 899 | 118 | 70 | 1 |
| 2018 | 926 | 128 | 68 | 1 |
| 2019 | 966 | 132 | 66 | 1 |
| Years\t2020–2024 | 4,357 | 746 | 293 | 5 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  | 227 |

# Note	10	–	Employee	stock-based	incentives

# Employee	stock-based	awards

In	2014,	2013	and	2012,	JPMorgan	Chase	granted	long-term	stock-based	awards to	certain	employees	under	its	Long-Term	Incentive	Plan,	which	was	last amended	in	May	2011	("LTIP").	Under	the	terms	of	the	LTIP,	as	of December	31,	2014,	266	million	shares	of	common	stock	were	available	for issuance	through	May	2015.	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

and	contain	clawback	provisions	similar	to	RSUs.	The 2013	and	2012	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	2014,	2013	and	2012,	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	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,	$14	million	and	$5	million	in	compensation	expense	in 2014,	2013	and	2012,	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	2014.

|  |  | RSUs |  |  | Options/SARs |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\t2014\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 | 121,241 | $41.47 | 87,075 | $44.24 |  |  |
| Granted | 37,817 | 57.88 | 101 | 59.18 |  |  |
| Exercised\tor\tvested | (54,265) | 40.67 | (24,950) | 36.59 |  |  |
| Forfeited | (4,225) | 47.32 | (2,059) | 41.90 |  |  |
| Canceled | NA | NA | (972) | 200.86 |  |  |
| Outstanding,\tDecember\t31 | 100,568 | $47.81 | 59,195 | $45.00 | 5.2 | $1,313,939 |
| Exercisable,\tDecember\t31 | NA | NA | 37,171 | 46.46 | 4.3 | 862,374 |

The	total	fair	value	of	RSUs	that	vested	during	the	years	ended	December	31,	2014,	2013	and	2012,	was	$3.2	billion,	$2.9	billion	and	$2.8	billion,	respectively.	There were	no	material	grants	of	stock	options	or	SARs	in	2014.	The	weighted-average	grant	date	per	share	fair	value	of	stock	options	and	SARs	granted	during	the	years	ended December	31,	2013	and	2012,	was	$9.58	and	$8.89,	respectively.	The	total	intrinsic	value	of	options	exercised	during	the	years	ended	December	31,	2014,	2013	and	2012, was	$539	million,	$507	million	and	$283	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 | 2014<br>$1,371 | 2013<br>$1,440 | 2012<br>$1,810 |
| :--- | :--- | :--- | :--- |
| Accrual\tof\testimated\tcosts\tof\tstock-based\tawards |  |  |  |
| to\tbe\tgranted\tin\tfuture\tperiods\tincluding\tthose\tto |  |  |  |
| full-career\teligible\temployees | 819 | 779 | 735 |
| Total\tnoncash\tcompensation\texpense\trelated\tto\nemployee\tstock-based\tincentive\tplans | $2,190 | $2,219 | $2,545 |

At	December	31,	2014,	approximately	$758	million	(pretax)	of	compensation	cost 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	1.0	year.	The	Firm	does	not	capitalize	any	compensation	cost	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, 2014,	2013	and	2012,	were	$854	million,	$865	million	and	$1.0	billion, 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	years	ended	December	31,	2013	and	2012, under	the	Black-Scholes	valuation	model.	There	were	no	material	grants	of	stock options	or	SARs	for	the	year	ended	December	31,	2014.

| Risk-free	interest	rate | 1.18% | 1.19% |
| :--- | :--- | :--- |
| Expected\tdividend\tyield | 2.66 | 3.15 |
| Expected\tcommon\tstock\tprice\tvolatility | 28 | 35 |
| Expected\tlife\t(in\tyears) | 6.6 | 6.6 |

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

The	following	table	presents	the	components	of	noninterest	expense.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Compensation\texpense | $30,160 | $30,810 | $30,585 |
| Noncompensation\texpense: |  |  |  |
| Occupancy | 3,909 | 3,693 | 3,925 |
| Technology,\tcommunications\tand\nequipment | 5,804 | 5,425 | 5,224 |
| Professional\tand\toutside\tservices | 7,705 | 7,641 | 7,429 |
| Marketing | 2,550 | 2,500 | 2,577 |
| Other(a)(b) | 11,146 | 20,398 | 14,989 |
| Total\tnoncompensation\texpense | 31,114 | 39,657 | 34,144 |
| Total\tnoninterest\texpense | $61,274 | $70,467 | $64,729 |

# 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	CIO	in	connection	with	its	asset-liability	management objectives.	At	December	31,	2014,	the	average	credit	rating	of	the	debt	securities comprising	the	investment	securities	portfolio	was	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	the	first	quarter	of	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.

# 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	OTTI	to	have	occurred	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.

# Realized	gains	and	losses

The	following	table	presents	realized	gains	and	losses	and	credit	losses	that	were recognized	in	income	from	AFS	securities.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Realized\tgains | $314 | $1,302 | $2,610 |
| Realized\tlosses | (233) | (614) | (457) |
| Net\trealized\tgains | 81 | 688 | 2,153 |
| OTTI\tlosses |  |  |  |
| Credit-related | (2) | (1) | (28) |
| Securities\tthe\tFirm\tintends\tto\tsell(a) | (2) | (20) | (15) |
| Total\tOTTI\tlosses\trecognized\tin\tincome | (4) | (21) | (43) |
| Net\tsecurities\tgains | $77 | $667 | $2,110 |

(a) Excludes	realized	losses	on	securities	sold	of	 $3	million,	$12	million	and	$24	million	for	the	years ended	December	31,	2014,	2013	and	2012,	respectively	that	had	been	previously	reported	as	an	OTTI loss	due	to	the	intention	to	sell	the	securities.

The	amortized	costs	and	estimated	fair	values	of	the	investment	securities	portfolio	were	as	follows	for	the	dates	indicated.

|  |  | 2014 |  |  |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 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) | $63,089 | $2,302 | $72 | $65,319 | $76,428 | $2,364 | $977 | $77,815 |
| Residential: |  |  |  |  |  |  |  |  |
| Prime\tand\tAlt-A | 5,595 | 78 | 29 | 5,644 | 2,744 | 61 | 27 | 2,778 |
| Subprime | 677 | 14 | — | 691 | 908 | 23 | 1 | 930 |
| Non-U.S. | 43,550 | 1,010 | — | 44,560 | 57,448 | 1,314 | 1 | 58,761 |
| Commercial | 20,687 | 438 | 17 | 21,108 | 15,891 | 560 | 26 | 16,425 |
| Total\tmortgage-backed\tsecurities | 133,598 | 3,842 | 118 | 137,322 | 153,419 | 4,322 | 1,032 | 156,709 |
| U.S.\tTreasury\tand\tgovernment\tagencies (a) | 13,603 | 56 | 14 | 13,645 | 21,310 | 385 | 306 | 21,389 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 27,841 | 2,243 | 16 | 30,068 | 29,741 | 707 | 987 | 29,461 |
| Certificates\tof\tdeposit | 1,103 | 1 | 1 | 1,103 | 1,041 | 1 | 1 | 1,041 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 51,492 | 1,272 | 21 | 52,743 | 55,507 | 863 | 122 | 56,248 |
| Corporate\tdebt\tsecurities | 18,158 | 398 | 24 | 18,532 | 21,043 | 498 | 29 | 21,512 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | 30,229 | 147 | 182 | 30,194 | 28,130 | 236 | 136 | 28,230 |
| Other | 12,442 | 184 | 11 | 12,615 | 12,062 | 186 | 3 | 12,245 |
| Total\tavailable-for-sale\tdebt\tsecurities | 288,466 | 8,143 | 387 | 296,222 | 322,253 | 7,198 | 2,616 | 326,835 |
| Available-for-sale\tequity\tsecurities | 2,513 | 17 | — | 2,530 | 3,125 | 17 | — | 3,142 |
| Total\tavailable-for-sale\tsecurities | $290,979 | $8,160 | $387 | $298,752 | $325,378 | $7,215 | $2,616 | $329,977 |
| Total\theld-to-maturity\tsecurities(b) | $49,252 | $1,902 | $— | $51,154 | $24,026 | $22 | $317 | $23,731 |
|  |  |  |  | $35.3\tbillion,\tMBS\tissued\tby\tU.S.\tgovernment\tagencies\twith\tan\tamortized\tcost\tof | $35.3\tbillion,\tMBS\tissued\tby\tU.S.\tgovernment\tagencies\twith\tan\tamortized\tcost\tof | $35.3\tbillion,\tMBS\tissued\tby\tU.S.\tgovernment\tagencies\twith\tan\tamortized\tcost\tof | $35.3\tbillion,\tMBS\tissued\tby\tU.S.\tgovernment\tagencies\twith\tan\tamortized\tcost\tof | $3.7\tbillion |
| and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | and\tobligations\tof\tU.S.\tstates\tand\tmunicipalities\twith\tan\tamortized\tcost\tof\t$10.2\tbillion.\tAs\tof\tDecember\t31,\t2013,\tconsists\tof\tMBS\tissued\tby\tU.S.\tgovernment-sponsored\tenterprises\twith\tan\tamortized\tcost\tof | $23.1 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  |  |  |  | 231 |

(a) Includes	total	U.S.	government-sponsored	enterprise	obligations	with	fair	values	of	 $59.3	billion	and	$67.0	billion	at	December	31,	2014	and	2013,	respectively,	which	were	predominantly	mortgage-related. (b) 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.	As	of	December	31,	2013,	consists	of	MBS	issued	by	U.S.	government-sponsored	enterprises	with	an	amortized	cost	of $23.1 billion	and	obligations	of	U.S.	states	and	municipalities	with	an	amortized	cost	of	 $920	million.

# Securities	impairment

The	following	tables	present	the	fair	value	and	gross	unrealized	losses	for	the	investment	securities	portfolio	by	aging	category	at	December	31,	2014	and	2013.

|  | Less	than	12	months |  | 12	months	or	more | 12	months	or	more |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  |  |  |  | Total\tgross\tunrealized |
| December\t31,\t2014\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 | $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 |

|  | Less	than	12	months |  | 12	months	or	more |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2013\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 | $20,293 | $895 | $1,150 | $82 | $21,443 | $977 |
| Residential: |  |  |  |  |  |  |
| Prime\tand\tAlt-A | 1,061 | 27 | — | — | 1,061 | 27 |
| Subprime | 152 | 1 | — | — | 152 | 1 |
| Non-U.S. | — | — | 158 | 1 | 158 | 1 |
| Commercial | 3,980 | 26 | — | — | 3,980 | 26 |
| Total\tmortgage-backed\tsecurities | 25,486 | 949 | 1,308 | 83 | 26,794 | 1,032 |
| U.S.\tTreasury\tand\tgovernment\tagencies | 6,293 | 250 | 237 | 56 | 6,530 | 306 |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities | 15,387 | 975 | 55 | 12 | 15,442 | 987 |
| Certificates\tof\tdeposit | 988 | 1 | — | — | 988 | 1 |
| Non-U.S.\tgovernment\tdebt\tsecurities | 11,286 | 110 | 821 | 12 | 12,107 | 122 |
| Corporate\tdebt\tsecurities | 1,580 | 21 | 505 | 8 | 2,085 | 29 |
| Asset-backed\tsecurities: |  |  |  |  |  |  |
| Collateralized\tloan\tobligations | 18,369 | 129 | 393 | 7 | 18,762 | 136 |
| Other | 1,114 | 3 | — | — | 1,114 | 3 |
| Total\tavailable-for-sale\tdebt\tsecurities | 80,503 | 2,438 | 3,319 | 178 | 83,822 | 2,616 |
| Available-for-sale\tequity\tsecurities | — | — | — | — | — | — |
| Held-to-maturity\tsecurities | 20,745 | 317 | — | — | 20,745 | 317 |
| Total\tsecurities\twith\tgross\tunrealized\tlosses | $101,248 | $2,755 | $3,319 | $178 | $104,567 | $2,933 |

The	following	table	presents	OTTI	losses	that	are	included	in	the	securities	gains and	losses	table	above.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Debt\tsecurities\tthe\tFirm\tdoes\tnot |  |  |  |
| intend\tto\tsell\tthat\thave\tcredit |  |  |  |
| losses |  |  |  |
| Total\tOTTI(a) | $(2) | $(1) | $(113) |
| Losses\trecorded\tin/(reclassified\nfrom)\tAOCI | — | — | 85 |
| Total\tcredit\tlosses\trecognized\tin\nincome | (2) | (1) | (28) |
| Securities\tthe\tFirm\tintends\tto\tsell(b) | (2) | (20) | (15) |
| Total\tOTTI\tlosses\trecognized\tin\nincome | $(4) | $(21) | $(43) |

(a) For	initial	OTTI,	represents	the	excess	of	the	amortized	cost	over	the	fair	value	of	AFS	debt securities.	For	subsequent	impairments	of	the	same	security,	represents	additional	declines	in	fair value	subsequent	to	previously	recorded	OTTI,	if	applicable.

(b) Excludes	realized	losses	on	securities	sold	of	 $3	million,	$12	million	and	$24	million	for	the	years ended	December	31,	2014,	2013	and	2012,	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, 2014,	2013	and	2012,	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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Balance,\tbeginning\tof\tperiod | $1 | $522 | $708 |
| Additions: |  |  |  |
| Newly\tcredit-impaired\tsecurities | 2 | 1 | 21 |
| Losses\treclassified\tfrom\tother\tcomprehensive\nincome\ton\tpreviously\tcredit-impaired\tsecurities | — | — | 7 |
| Reductions: |  |  |  |
| Sales\tand\tredemptions\tof\tcredit-impaired\nsecurities | — | (522) | (214) |
| Balance,\tend\tof\tperiod | $3 | $1 | $522 |

# Gross	unrealized	losses

Gross	unrealized	losses	have	generally	decreased	since	December	31,	2013. Though	losses	on	securities	that	have	been	in	an	unrealized	loss	position	for	12 months	or	more	have	increased,	the	increase	is	not	material.	The	Firm	has recognized	the	unrealized	losses	on	securities	it	intends	to	sell.	As	of	December 31,	2014,	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	reported	in the	table	above,	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,	2014.

# Contractual	maturities	and	yields

The	following	table	presents	the	amortized	cost	and	estimated	fair	value	at	December	31,	2014,	of	JPMorgan	Chase's	investment	securities	portfolio	by	contractual maturity.

| December	31,	2014<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 | $996 | $14,132 | $5,768 | $112,702 | $133,598 |
| Fair\tvalue | 1,003 | 14,467 | 5,974 | 115,878 | 137,322 |
| Average\tyield(b) | 2.65% | 1.85% | 3.12% | 2.93% | 2.82% |
| U.S.\tTreasury\tand\tgovernment\tagencies (a) |  |  |  |  |  |
| Amortized\tcost | $2,209 | $— | $10,284 | $1,110 | $13,603 |
| Fair\tvalue | 2,215 | — | 10,275 | 1,155 | 13,645 |
| Average\tyield(b) | 0.80% | —% | 0.62% | 0.35% | 0.63% |
| Obligations\tof\tU.S.\tstates\tand\tmunicipalities |  |  |  |  |  |
| Amortized\tcost | $65 | $498 | $1,432 | $25,846 | $27,841 |
| Fair\tvalue | 66 | 515 | 1,508 | 27,979 | 30,068 |
| Average\tyield(b) | 2.13% | 4.00% | 4.93% | 6.78% | 6.63% |
| Certificates\tof\tdeposit |  |  |  |  |  |
| Amortized\tcost | $1,052 | $51 | $— | $— | $1,103 |
| Fair\tvalue | 1,050 | 53 | — | — | 1,103 |
| Average\tyield(b) | 0.84% | 3.28% | —% | —% | 0.95% |
| Non-U.S.\tgovernment\tdebt\tsecurities |  |  |  |  |  |
| Amortized\tcost | $13,559 | $14,276 | $21,220 | $2,437 | $51,492 |
| Fair\tvalue | 13,588 | 14,610 | 21,957 | 2,588 | 52,743 |
| Average\tyield(b) | 3.31% | 2.04% | 1.04% | 1.19% | 1.90% |
| Corporate\tdebt\tsecurities |  |  |  |  |  |
| Amortized\tcost | $3,830 | $9,619 | $4,523 | $186 | $18,158 |
| Fair\tvalue | 3,845 | 9,852 | 4,651 | 184 | 18,532 |
| Average\tyield(b) | 2.39% | 2.40% | 2.56% | 3.43% | 2.45% |
| Asset-backed\tsecurities |  |  |  |  |  |
| Amortized\tcost | $— | $2,240 | $17,439 | $22,992 | $42,671 |
| Fair\tvalue | — | 2,254 | 17,541 | 23,014 | 42,809 |
| Average\tyield(b) | —% | 1.66% | 1.75% | 1.73% | 1.73% |
| Total\tavailable-for-sale\tdebt\tsecurities |  |  |  |  |  |
| Amortized\tcost | $21,711 | $40,816 | $60,666 | $165,273 | $288,466 |
| Fair\tvalue | 21,767 | 41,751 | 61,906 | 170,798 | 296,222 |
| Average\tyield(b) | 2.74% | 2.06% | 1.58% | 3.32% | 2.73% |
| Available-for-sale\tequity\tsecurities |  |  |  |  |  |
| Amortized\tcost | $— | $— | $— | $2,513 | $2,513 |
| Fair\tvalue | — | — | — | 2,530 | 2,530 |
| Average\tyield(b) | —% | —% | —% | 0.25% | 0.25% |
| Total\tavailable-for-sale\tsecurities |  |  |  |  |  |
| Amortized\tcost | $21,711 | $40,816 | $60,666 | $167,786 | $290,979 |
| Fair\tvalue | 21,767 | 41,751 | 61,906 | 173,328 | 298,752 |
| Average\tyield(b) | 2.74% | 2.06% | 1.58% | 3.28% | 2.71% |
| Total\theld-to-maturity\tsecurities |  |  |  |  |  |
| Amortized\tcost | $— | $54 | $487 | $48,711 | $49,252 |
| Fair\tvalue | — | 54 | 512 | 50,588 | 51,154 |
| Average\tyield(b) | —% | 4.33% | 4.81% | 3.98% | 3.98% |

(a) U.S.	government-sponsored	enterprises	were	the	only	issuers	whose	securities	exceeded	 10%	of	JPMorgan	Chase's	total	stockholders'	equity	at	December	31,	2014.

(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	duration,	which	reflects	anticipated	future	prepayments,	is	approximately	five	years	for	agency	residential	mortgage-backed	securities,	three	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.

The	following	table	presents	as	of	December	31,	2014	and	2013,	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.

|  |  | 2014 |  |  |  | 2013 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tasset\tbalance | Amounts\tnetted\ton\nthe\tConsolidated\nbalance\tsheets | Net\tasset\tbalance |  | Gross\tasset\nbalance | Amounts\tnetted\ton\nthe\tConsolidated\nbalance\tsheets | Net\tasset\tbalance |  |
| Securities\tpurchased\tunder\tresale\tagreements |  |  |  |  |  |  |  |  |
| Securities\tpurchased\tunder\tresale\tagreements\twith\tan\nappropriate\tlegal\topinion | $341,989 | $(142,719) | $199,270 |  | $354,814 | $(115,408) | $239,406 |  |
| Securities\tpurchased\tunder\tresale\tagreements\twhere\tan |  |  |  |  |  |  |  |  |
| appropriate\tlegal\topinion\thas\tnot\tbeen\teither\tsought\tor |  |  |  |  |  |  |  |  |
| obtained | 15,751 |  | 15,751 |  | 8,279 |  | 8,279 |  |
| Total\tsecurities\tpurchased\tunder\tresale\tagreements | $357,740 | $(142,719) | $215,021 | (a) | $363,093 | $(115,408) | $247,685 | (a) |
| Securities\tborrowed | $110,435 | N/A | $110,435 | (b)(c) | $111,465 | N/A | $111,465 | (b)(c) |

(a) At	December	31,	2014	and	2013,	included	securities	purchased	under	resale	agreements	of	 $28.6	billion	and	$25.1	billion,	respectively,	accounted	for	at	fair	value.

(b) At	December	31,	2014	and	2013,	included	securities	borrowed	of	$992	million	and	$3.7	billion,	respectively,	accounted	for	at	fair	value.

(c) Included	$28.0	billion	and	$26.9	billion	at	December	31,	2014	and	2013,	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,	2014	and	2013,	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 | $199,270 | $(196,136) | $(232) | $2,902 | $239,406 | $(234,495) | $(98) | $4,813 |
| Securities\tborrowed | $82,464 | $(80,267) | $— | $2,197 | $84,531 | $(81,127) | $— | $3,404 |

(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,	2014	and	2013,	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.

|  |  | 2014 |  |  |  |  | 2013 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tliability\nbalance | Amounts\tnetted\ton\nthe\tConsolidated\nbalance\tsheets | Net\tliability\nbalance |  | Gross\tliability\nbalance |  | Amounts\tnetted\ton\nthe\tConsolidated\nbalance\tsheets | Net\tliability\nbalance |  |
| Securities\tsold\tunder\trepurchase\tagreements |  |  |  |  |  |  |  |  |  |
| Securities\tsold\tunder\trepurchase\tagreements\twith\tan\nappropriate\tlegal\topinion | $289,619 | $(142,719) | $146,900 |  | $257,630 | (f) | $(115,408) | $142,222 | (f) |
| Securities\tsold\tunder\trepurchase\tagreements\twhere\tan |  |  |  |  |  |  |  |  |  |
| appropriate\tlegal\topinion\thas\tnot\tbeen\teither\tsought\tor |  |  |  |  |  |  |  |  |  |
| obtained(a) | 22,906 |  | 22,906 |  | 18,143 | (f) |  | 18,143 | (f) |
| Total\tsecurities\tsold\tunder\trepurchase\tagreements | $312,525 | $(142,719) | $169,806 | (c) | $275,773 |  | $(115,408) | $160,365 | (c) |
| Securities\tloaned(b) | $25,927 | N/A | $25,927 | (d)(e) | $25,769 |  | N/A | $25,769 | (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	borrow	vs.	pledge	transactions	of	$4.1	billion	and	$5.8	billion	at	December	31,	2014	and	2013,	respectively,	when	acting	as	lender	and	as	presented	within	other liabilities	in	the	Consolidated	balance	sheets.

(c) At	December	31,	2014	and	2013,	included	securities	sold	under	repurchase	agreements	of	$3.0	billion	and	$4.9	billion,	respectively,	accounted	for	at	fair	value.

(d) At	December	31,	2013,	included	securities	loaned	of	$483	million	accounted	for	at	fair	value;	there	were	 no	securities	loaned	accounted	for	at	fair	value	at	 December	31,	2014.

(e) Included	$537	million	and	$397	million	at	December	31,	2014	and	2013,	respectively,	of	securities	loaned	where	an	appropriate	legal	opinion	has	not	been	either	sought	or	obtained	with	respect	to the	master	netting	agreement.

(f) The	prior	period	amounts	have	been	revised	with	a	corresponding	impact	in	the	table	below.	This	revision	had	no	impact	on	the	Firm's	Consolidated	balance	sheets	or	its	results	of	operations.

The	following	table	presents	information	as	of	December	31,	2014	and	2013,	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) |  |  |  | Consolidated	balance	sheets(a) | 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 | $146,900 | $(143,985) | $(363) | $2,552 | $142,222 | (d) | (d)\n$(139,051) | $(450) | $2,721 |
| Securities\tloaned | $25,390 | $(25,040) | $— | $350 | $25,372 |  | $(25,125) | $— | $247 |

(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.

(d) The	prior	period	amounts	have	been	revised	with	a	corresponding	impact	in	the	table	above.	This	revision	had	no	impact	on	the	Firm's	Consolidated	balance	sheets	or	its	results	of	operations.

JPMorgan	Chase's	policy	is	to	take	possession,	where	possible,	of	securities purchased	under	resale	agreements	and	of	securities	borrowed.	The	Firm monitors	the	value	of	the	underlying	securities	(primarily	G7	government securities,	U.S.	agency	securities	and	agency	MBS,	and	equities)	that	it	has received	from	its	counterparties	and	either	requests	additional	collateral	or returns	a	portion	of	the	collateral	when	appropriate	in	light	of	the	market	value	of the	underlying	securities.	Margin	levels	are	established	initially	based	upon	the counterparty	and	type	of	collateral	and	monitored	on	an	ongoing	basis	to	protect against	declines	in	collateral	value	in	the	event	of	default.	JPMorgan	Chase typically	enters	into	master	netting	agreements	and	other	collateral	arrangements with	its	resale	agreement	and	securities	borrowed	counterparties,	which	provide for	the	right	to	liquidate	the	purchased	or	borrowed	securities	in	the	event	of	a customer	default.	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,	2014	and	2013.

For	further	information	regarding	assets	pledged	and	collateral	received	in securities	financing	agreements,	see	Note	30.

# Transfers	not	qualifying	for	sale	accounting

In	addition,	at	December	31,	2014	and	2013,	the	Firm	held	$13.8	billion	and $14.6	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,	other	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

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;	net	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.	In	the	second	quarter	of	2013,	the	Firm	revised	its	policy	to charge-off	modified	credit	card	loans	that	do	not	comply	with	their	modified payment	terms	at	120	days	past	due	rather	than	180	days	past	due.	Auto	and student	loans	are	charged	off	no	later	than	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	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	to	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.

# Loans	held-for-sale

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	at	fair	value

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	nonaccrual, 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	251	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	troubled	debt	restructurings ("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	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) Other	primarily	includes	loans	to	SPEs	and	loans	to	private	banking	clients.	See	Note	1	for	additional	information	on	SPEs.

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	of $1.3	billion	and	$1.9	billion	at	December	31,	2014	and	2013,	respectively.

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) Excluded	retained	loans	purchased	from	correspondents	that	were	originated	in	accordance	with	the	Firm's	underwriting	standards.	Such	purchases	were $15.1	billion,	$5.7	billion	and	$1.4	billion for	the	years	ended	December	31,	2014,	2013	and	2012,	respectively.

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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Net\tgains/(losses)\ton\tsales\tof\tloans\t(including\tlower\tof\tcost\tor\tfair\tvalue\tadjustments) (a) |  |  |  |
| Consumer,\texcluding\tcredit\tcard | $341 | $313 | $122 |
| Credit\tcard | (241) | 3 | (9) |
| Wholesale | 101 | (76) | 180 |
| Total\tnet\tgains/(losses)\ton\tsales\tof\tloans\t(including\tlower\tof\tcost\tor\tfair\tvalue\tadjustments) | $201 | $240 | $293 |

(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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Residential\treal\testate\t–\texcluding\tPCI |  |  |
| Home\tequity: |  |  |
| Senior\tlien | $16,367 | $17,113 |
| Junior\tlien | 36,375 | 40,750 |
| Mortgages: |  |  |
| Prime,\tincluding\toption\tARMs | 104,921 | 87,162 |
| Subprime | 5,056 | 7,104 |
| Other\tconsumer\tloans |  |  |
| Auto | 54,536 | 52,757 |
| Business\tbanking | 20,058 | 18,951 |
| Student\tand\tother | 10,970 | 11,557 |
| Residential\treal\testate\t–\tPCI |  |  |
| Home\tequity | 17,095 | 18,927 |
| Prime\tmortgage | 10,220 | 12,038 |
| Subprime\tmortgage | 3,673 | 4,175 |
| Option\tARMs | 15,708 | 17,915 |
| Total\tretained\tloans | $294,979 | $288,449 |

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	page	255	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.

| (in	millions,	except	ratios) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Loan\tdelinquency(a) |  |  |  |  |  |  |  |  |  |  |
| Current | $15,730 | $16,470 | $35,575 | $39,864 | $93,951 | $76,108 | $4,296 | $5,956 | $149,552 | $138,398 |
| 30–149\tdays\tpast\tdue | 275 | 298 | 533 | 662 | 4,091 | 3,155 | 489 | 646 | 5,388 | 4,761 |
| 150\tor\tmore\tdays\tpast\tdue | 362 | 345 | 267 | 224 | 6,879 | 7,899 | 271 | 502 | 7,779 | 8,970 |
| Total\tretained\tloans | $16,367 | $17,113 | $36,375 | $40,750 | $104,921 | $87,162 | $5,056 | $7,104 | $162,719 | $152,129 |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tretained\tloans(b) | 3.89% | 3.76% | 2.20% | 2.17% | 1.42% | 2.32% | 15.03% | 16.16% | 2.27% | 3.09% |
| 90\tor\tmore\tdays\tpast\tdue\tand\tstill\taccruing | $— | $— | $— | $— | $— | $— | $— | $— | $— | $— |
| 90\tor\tmore\tdays\tpast\tdue\tand\tgovernment\nguaranteed(c) | — | — | — | — | 7,544 | 7,823 | — | — | 7,544 | 7,823 |
| Nonaccrual\tloans | 938 | 932 | 1,590 | 1,876 | 2,190 | 2,666 | 1,036 | 1,390 | 5,754 | 6,864 |
| Current\testimated\tLTV\tratios(d)(e)(f)(g) |  |  |  |  |  |  |  |  |  |  |
| Greater\tthan\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | $21 | $40 | $467 | $1,101 | $120 | $236 | $10 | $52 | $618 | $1,429 |
| Less\tthan\t660 | 10 | 22 | 138 | 346 | 103 | 281 | 51 | 197 | 302 | 846 |
| 101%\tto\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 134 | 212 | 3,149 | 4,645 | 648 | 1,210 | 118 | 249 | 4,049 | 6,316 |
| Less\tthan\t660 | 69 | 107 | 923 | 1,407 | 340 | 679 | 298 | 597 | 1,630 | 2,790 |
| 80%\tto\t100%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 633 | 858 | 6,481 | 7,995 | 3,863 | 4,749 | 432 | 614 | 11,409 | 14,216 |
| Less\tthan\t660 | 226 | 326 | 1,780 | 2,128 | 1,026 | 1,590 | 770 | 1,141 | 3,802 | 5,185 |
| Less\tthan\t80%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 13,048 | 13,186 | 20,030 | 19,732 | 81,805 | 59,634 | 1,586 | 1,961 | 116,469 | 94,513 |
| Less\tthan\t660 | 2,226 | 2,362 | 3,407 | 3,396 | 4,906 | 5,071 | 1,791 | 2,293 | 12,330 | 13,122 |
| U.S.\tgovernment-guaranteed | — | — | — | — | 12,110 | 13,712 | — | — | 12,110 | 13,712 |
| Total\tretained\tloans | $16,367 | $17,113 | $36,375 | $40,750 | $104,921 | $87,162 | $5,056 | $7,104 | $162,719 | $152,129 |
| Geographic\tregion |  |  |  |  |  |  |  |  |  |  |
| California | $2,232 | $2,397 | $8,144 | $9,240 | $28,133 | $21,876 | $718 | $1,069 | $39,227 | $34,582 |
| New\tYork | 2,805 | 2,732 | 7,685 | 8,429 | 16,550 | 14,085 | 677 | 942 | 27,717 | 26,188 |
| Illinois | 1,306 | 1,248 | 2,605 | 2,815 | 6,654 | 5,216 | 207 | 280 | 10,772 | 9,559 |
| Florida | 861 | 847 | 1,923 | 2,167 | 5,106 | 4,598 | 632 | 885 | 8,522 | 8,497 |
| Texas | 1,845 | 2,044 | 1,087 | 1,199 | 4,935 | 3,565 | 177 | 220 | 8,044 | 7,028 |
| New\tJersey | 654 | 630 | 2,233 | 2,442 | 3,361 | 2,679 | 227 | 339 | 6,475 | 6,090 |
| Arizona | 927 | 1,019 | 1,595 | 1,827 | 1,805 | 1,385 | 112 | 144 | 4,439 | 4,375 |
| Washington | 506 | 555 | 1,216 | 1,378 | 2,410 | 1,951 | 109 | 150 | 4,241 | 4,034 |
| Michigan | 736 | 799 | 848 | 976 | 1,203 | 998 | 121 | 178 | 2,908 | 2,951 |
| Ohio | 1,150 | 1,298 | 778 | 907 | 615 | 466 | 112 | 161 | 2,655 | 2,832 |
| All\tother(h) | 3,345 | 3,544 | 8,261 | 9,370 | 34,149 | 30,343 | 1,964 | 2,736 | 47,719 | 45,993 |
| Total\tretained\tloans | $16,367 | $17,113 | $36,375 | $40,750 | $104,921 | $87,162 | $5,056 | $7,104 | $162,719 | $152,129 |

(a) Individual	delinquency	classifications	include	mortgage	loans	insured	by	U.S.	government	agencies	as	follows:	current	included	$2.6	billion	and	$4.7	billion;	30–149	days	past	due	included	$3.5	billion	and	$2.4	billion;	and	150	or	more	days past	due	included	$6.0	billion	and	$6.6	billion	at	December	31,	2014	and	2013,	respectively.

(b) At	December	31,	2014	and	2013,	Prime,	including	option	ARMs	loans	excluded	mortgage	loans	insured	by	U.S.	government	agencies	of	$9.5	billion	and	$9.0	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	but	insured	by	U.S.	government	agencies,	are	excluded	from	nonaccrual	loans.	In	predominantly	all	cases,	100%	of	the	principal	balance	of	the	loans	is	insured	and	interest	is	guaranteed	at	a specified	reimbursement	rate	subject	to	meeting	agreed-upon	servicing	guidelines.	These	amounts	have	been	excluded	from	nonaccrual	loans	based	upon	the	government	guarantee.	At	December	31,	2014	and	2013,	these	balances	included $4.2	billion	and	$4.7	billion,	respectively,	of	loans	that	are	no	longer	accruing	interest	because	interest	has	been	curtailed	by	the	U.S.	government	agencies	although,	in	predominantly	all	cases,	100%	of	the	principal	is	still	insured.	For	the remaining	balance,	interest	is	being	accrued	at	the	guaranteed	reimbursement	rate.

(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.

(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	prior	period	prime,	including	option	ARMs	have	been	revised.	This	revision	had	no	impact	on	the	Firm's	Consolidated	balance	sheets	or	its	results	of operations.

(h) At	December	31,	2014	and	2013,	included	mortgage	loans	insured	by	U.S.	government	agencies	of	$12.1	billion	and	$13.7	billion, respectively.

The	following	tables	represent	the	Firm's	delinquency	statistics	for	junior	lien	home	equity	loans	and	lines	as	of	December	31,	2014	and	2013.

| December	31,	2014 |  |  | 150+	days |  | Total	30+	day |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratios) | 30–89\tdays\tpast\tdue | 90–149\tdays\tpast\tdue | \tpast\tdue | Total\tloans | delinquency\trate |
| HELOCs:(a) |  |  |  |  |  |
| Within\tthe\trevolving\tperiod(b) | $233 | $69 | $141 | $25,252 | 1.75% |
| Beyond\tthe\trevolving\tperiod | 108 | 37 | 107 | 7,979 | 3.16 |
| HELOANs | 66 | 20 | 19 | 3,144 | 3.34 |
| Total | $407 | $126 | $267 | $36,375 | 2.20% |

| December	31,	2013 |  |  | 150+	days |  | Total	30+	day |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratios) | 30–89\tdays\tpast\tdue | 90–149\tdays\tpast\tdue | \tpast\tdue | Total\tloans | delinquency\trate |
| HELOCs:(a) |  |  |  |  |  |
| Within\tthe\trevolving\tperiod(b) | $341 | $104 | $162 | $31,848 | 1.91% |
| Beyond\tthe\trevolving\tperiod | 84 | 21 | 46 | 4,980 | 3.03 |
| HELOANs | 86 | 26 | 16 | 3,922 | 3.26 |
| Total | $511 | $151 | $224 | $40,750 | 2.17% |

(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	require	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 |  | –\texcluding\tPCI | –\texcluding\tPCI |
| (in\tmillions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Impaired\tloans |  |  |  |  |  |  |  |  |  |  |
| With\tan\tallowance | $552 | $567 | $722 | $727 | $4,949 | $5,871 | $2,239 | $2,989 | $8,462 | $10,154 |
| Without\tan\tallowance(a) | 549 | 579 | 582 | 592 | 1,196 | 1,133 | 639 | 709 | 2,966 | 3,013 |
| Total\timpaired\tloans(b)(c) | $1,101 | $1,146 | $1,304 | $1,319 | $6,145 | $7,004 | $2,878 | $3,698 | $11,428 | $13,167 |
| Allowance\tfor\tloan\tlosses\nrelated\tto\timpaired\tloans | $84 | $94 | $147 | $162 | $127 | $144 | $64 | $94 | $422 | $494 |
| Unpaid\tprincipal\tbalance\tof\nimpaired\tloans(d) | 1,451 | 1,515 | 2,603 | 2,625 | 7,813 | 8,990 | 4,200 | 5,461 | 16,067 | 18,591 |
| Impaired\tloans\ton\tnonaccrual\nstatus(e) | 628 | 641 | 632 | 666 | 1,559 | 1,737 | 931 | 1,127 | 3,750 | 4,171 |

(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,	2014,	Chapter	7	residential	real	estate	loans	included	approximately	 19%	of	senior	lien	home	equity,	12%	of	junior	lien	home	equity,	 25%	of	prime	mortgages,	including	option	ARMs,	and 18%	of subprime	mortgages	that	were	30	days	or	more	past	due.

(b) At	December	31,	2014	and	2013,	$4.9	billion	and	$7.6	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,	2014	and	2013.	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,	2014	and	2013,	nonaccrual	loans	included	 $2.9	billion	and	$3.0	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	238–240	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) | 2014 | Average	impaired	loans<br>2013 | 2012 | 2014 | Interest	income	on<br>impaired	loans(a)<br>2013 | 2012 | 2014 | Interest	income	on	impaired<br>loans	on	a	cash	basis(a)<br>2013 | 2012 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Home\tequity |  |  |  |  |  |  |  |  |  |
| Senior\tlien | $1,122 | $1,151 | $610 | $55 | $59 | $27 | $37 | $40 | $12 |
| Junior\tlien | 1,313 | 1,297 | 848 | 82 | 82 | 42 | 53 | 55 | 16 |
| Mortgages |  |  |  |  |  |  |  |  |  |
| Prime,\tincluding\toption\tARMs | 6,730 | 7,214 | 5,989 | 262 | 280 | 238 | 54 | 59 | 28 |
| Subprime | 3,444 | 3,798 | 3,494 | 182 | 200 | 183 | 51 | 55 | 31 |
| Total\tresidential\treal\testate\t–\texcluding\tPCI | $12,609 | $13,460 | $10,941 | $581 | $621 | $490 | $195 | $209 | $87 |

(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.

The	Firm	is	required	to	provide	borrower	relief	under	the	terms	of	certain Consent	Orders	and	settlements	entered	into	by	the	Firm	related	to	its	mortgage servicing,	originations	and	residential	mortgage-backed	securities	activities.	This borrower	relief	includes	reductions	of	principal	and	forbearance.

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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Home\tequity: |  |  |  |
| Senior\tlien | $110 | $210 | $835 |
| Junior\tlien | 211 | 388 | 711 |
| Mortgages: |  |  |  |
| Prime,\tincluding\toption\tARMs | 287 | 770 | 2,918 |
| Subprime | 124 | 319 | 1,043 |
| Total\tresidential\treal\testate\t–\nexcluding\tPCI | $732 | $1,687 | $5,507 |

# Nature	and	extent	of	modifications

Making	Home	Affordable	("MHA"),	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 |  |  | Subprime |  | Total\tresidential\treal\testate | \t-\texcluding\tPCI |  |
| Year\tended\tDec.\t31, | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Number |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| of\tloans\tapproved |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| for\ta\ttrial\tmodification | 939 | 1,719 | 1,695 | 626 | 884 | 918 | 1,052 | 2,846 | 3,895 | 2,056 | 4,233 | 4,841 | 4,673 | 9,682 | 11,349 |
| Number |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| of\tloans\tpermanently |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| modified | 1,171 | 1,765 | 4,385 | 2,813 | 5,040 | 7,430 | 2,507 | 4,356 | 9,043 | 3,141 | 5,364 | 9,964 | 9,632 | 16,525 | 30,822 |
| Concession\tgranted:(a) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Interest\trate\treduction | 53% | 70% | 83% | 84% | 88% | 88% | 43% | 73% | 74% | 47% | 72% | 69% | 58% | 77% | 77% |
| Term\tor\tpayment\nextension | 67 | 76 | 47 | 83 | 80 | 76 | 51 | 73 | 57 | 53 | 56 | 41 | 63 | 70 | 55 |
| Principal\tand/or\tinterest\ndeferred | 16 | 12 | 6 | 23 | 24 | 17 | 19 | 30 | 16 | 12 | 13 | 7 | 18 | 21 | 12 |
| Principal\tforgiveness | 36 | 38 | 11 | 22 | 32 | 23 | 51 | 38 | 29 | 53 | 48 | 42 | 41 | 39 | 29 |
| Other(b) | — | — | — | — | — | — | 10 | 23 | 29 | 10 | 14 | 8 | 6 | 11 | 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) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| interest\trate\tof\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| with\tinterest\trate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| reductions\t–\tbefore |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 6.38% | 6.35% | 7.20% | 4.81% | 5.05% | 5.45% | 4.82% | 5.28% | 6.14% | 7.16% | 7.33% | 7.73% | 5.61% | 5.88% | 6.57% |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| interest\trate\tof\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| with\tinterest\trate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| reductions\t–\tafter |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 3.03 | 3.23 | 4.61 | 2.00 | 2.14 | 1.94 | 2.69 | 2.77 | 3.67 | 3.37 | 3.52 | 4.14 | 2.78 | 2.92 | 3.69 |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| remaining |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| contractual\tterm\t(in |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| years)\tof\tloans\twith |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| term\tor\tpayment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| extensions\t–\tbefore |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 17 | 19 | 18 | 19 | 20 | 20 | 25 | 25 | 25 | 24 | 24 | 24 | 23 | 23 | 24 |
| Weighted-average |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| remaining |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| contractual\tterm\t(in |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| years)\tof\tloans\twith |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| term\tor\tpayment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| extensions\t–\tafter |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| TDR | 30 | 31 | 28 | 35 | 34 | 32 | 37 | 37 | 36 | 36 | 35 | 32 | 36 | 36 | 34 |
| Charge-offs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| recognized\tupon |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| permanent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| modification | $2 | $7 | $8 | $25 | $70 | $65 | $9 | $16 | $35 | $3 | $5 | $29 | $39 | $98 | $137 |
| Principal\tdeferred | 5 | 7 | 4 | 11 | 24 | 23 | 39 | 129 | 133 | 19 | 43 | 43 | 74 | 203 | 203 |
| Principal\tforgiven | 14 | 30 | 20 | 21 | 51 | 58 | 83 | 206 | 249 | 89 | 218 | 324 | 207 | 505 | 651 |
| Balance\tof\tloans\tthat |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| redefaulted\twithin |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| one\tyear\tof |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| permanent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| modification(a) | $19 | $26 | $30 | $10 | $20 | $46 | $121 | $164 | $255 | $93 | $106 | $156 | $243 | $316 | $487 |

(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,	2014,	the	weighted-average	estimated	remaining	lives	of residential	real	estate	loans,	excluding	PCI	loans,	permanently	modified	in	TDRs were	6	years	for	senior	lien	home	equity,	8	years	for	junior	lien	home	equity,	9 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,	2014	and	2013,	the	Firm	had	non-PCI	residential	real	estate loans,	excluding	those	insured	by	U.S.	government	agencies,	with	a	carrying value	of	$1.5	billion	and	$2.1	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) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 |  | 2013 |
| Loan\tdelinquency(a) |  |  |  |  |  |  |  |  |  |
| Current | $53,866 | $52,152 | $19,710 | $18,511 | $10,080 | $10,529 | $83,656 |  | $81,192 |
| 30–119\tdays\tpast\tdue | 663 | 599 | 208 | 280 | 576 | 660 | 1,447 |  | 1,539 |
| 120\tor\tmore\tdays\tpast\tdue | 7 | 6 | 140 | 160 | 314 | 368 | 461 |  | 534 |
| Total\tretained\tloans | $54,536 | $52,757 | $20,058 | $18,951 | $10,970 | $11,557 | $85,564 |  | $83,265 |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tretained\nloans | 1.23% | 1.15% | 1.73% | 2.32% | 2.15% (d) | 2.52% (d) | 1.47% | (d) | 1.60% |
| 90\tor\tmore\tdays\tpast\tdue\tand\tstill\naccruing\t(b) | $— | $— | $— | $— | $367 | $428 | $367 |  | $428 |
| Nonaccrual\tloans | 115 | 161 | 279 | 385 | 270 | 86 | 664 |  | 632 |
| Geographic\tregion |  |  |  |  |  |  |  |  |  |
| California | $6,294 | $5,615 | $3,008 | $2,374 | $1,143 | $1,112 | $10,445 |  | $9,101 |
| New\tYork | 3,662 | 3,898 | 3,187 | 3,084 | 1,259 | 1,218 | 8,108 |  | 8,200 |
| Illinois | 3,175 | 2,917 | 1,373 | 1,341 | 729 | 740 | 5,277 |  | 4,998 |
| Florida | 2,301 | 2,012 | 827 | 646 | 521 | 539 | 3,649 |  | 3,197 |
| Texas | 5,608 | 5,310 | 2,626 | 2,646 | 868 | 878 | 9,102 |  | 8,834 |
| New\tJersey | 1,945 | 2,014 | 451 | 392 | 378 | 397 | 2,774 |  | 2,803 |
| Arizona | 2,003 | 1,855 | 1,083 | 1,046 | 239 | 252 | 3,325 |  | 3,153 |
| Washington | 1,019 | 950 | 258 | 234 | 235 | 227 | 1,512 |  | 1,411 |
| Michigan | 1,633 | 1,902 | 1,375 | 1,383 | 466 | 513 | 3,474 |  | 3,798 |
| Ohio | 2,157 | 2,229 | 1,354 | 1,316 | 629 | 708 | 4,140 |  | 4,253 |
| All\tother | 24,739 | 24,055 | 4,516 | 4,489 | 4,503 | 4,973 | 33,758 |  | 33,517 |
| Total\tretained\tloans | $54,536 | $52,757 | $20,058 | $18,951 | $10,970 | $11,557 | $85,564 |  | $83,265 |
| Loans\tby\trisk\tratings(c) |  |  |  |  |  |  |  |  |  |
| Noncriticized | $9,822 | $9,968 | $14,619 | $13,622 | NA | NA | $24,441 |  | $23,590 |
| Criticized\tperforming | 35 | 54 | 708 | 711 | NA | NA | 743 |  | 765 |
| Criticized\tnonaccrual | — | 38 | 213 | 316 | NA | NA | 213 |  | 354 |

(a) Individual	delinquency	classifications	included	loans	insured	by	U.S.	government	agencies	under	the	Federal	Family	Education	Loan	Program	("FFELP")	as	follows:	current	included $4.3	billion	and	$4.9	billion; 30-119	days	past	due	included	$364	million	and	$387	million;	and	120	or	more	days	past	due	included	 $290	million	and	$350	million	at	December	31,	2014	and	2013,	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,	2014	and	2013,	excluded	loans	30	days	or	more	past	due	and	still	accruing,	which	are	insured	by	U.S.	government	agencies	under	the	FFELP,	of	 $654	million	and	$737	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.

| (in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Impaired\tloans |  |  |
| With\tan\tallowance | $557 | $571 |
| Without\tan\tallowance(a) | 35 | 47 |
| Total\timpaired\tloans(b)(c) | $592 | $618 |
| Allowance\tfor\tloan\tlosses\trelated\tto\timpaired\tloans | $117 | $107 |
| Unpaid\tprincipal\tbalance\tof\timpaired\tloans(d) | 719 | 788 |
| Impaired\tloans\ton\tnonaccrual\tstatus | 456 | 441 |

(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	 $599	million,	$648	million	and	$733	million	for	the years	ended	December	31,	2014,	2013	and	2012,	respectively.	The	related	interest	income	on

impaired	loans,	including	those	on	a	cash	basis,	was	not	material	for	the	years	ended	December	31, 2014,	2013	and	2012.

(d) Represents	the	contractual	amount	of	principal	owed	at	 December	31,	2014	and	2013.	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.

The	following	table	provides	information	about	the	Firm's	other	consumer	loans modified	in	TDRs.	All	of	these	TDRs	are	reported	as	impaired	loans	in	the	tables above.

| (in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Loans\tmodified\tin\ttroubled\tdebt\trestructurings (a)(b) | $442 | $378 |
| TDRs\ton\tnonaccrual\tstatus | 306 | 201 |

(a) The	impact	of	these	modifications	was	not	material	to	the	Firm	for	the	years	ended December	31, 2014	and	2013.

(b) Additional	commitments	to	lend	to	borrowers	whose	loans	have	been	modified	in	TDRs	as	of December	31,	2014	and	2013	were	immaterial.

For	auto	loans,	TDRs	typically	occur	in	connection	with	the	bankruptcy	of	the borrower.	In	these	cases,	the	loan	is	modified	with	a	revised	repayment	plan	that typically	incorporates	interest	rate	reductions	and,	to	a	lesser	extent,	principal forgiveness.

For	business	banking	loans,	concessions	are	dependent	on	individual	borrower circumstances	and	can	be	of	a	short-term	nature	for	borrowers	who	need temporary	relief	or	longer	term	for	borrowers	experiencing	more	fundamental financial	difficulties.	Concessions	are	predominantly	term	or	payment	extensions, but	also	may	include	interest	rate	reductions.

The	balance	of	business	banking	loans	modified	in	TDRs	that	experienced	a payment	default,	and	for	which	the	payment	default	occurred	within	one	year	of the	modification,	was	$25	million,	$43	million	and	$42	million,	during	the	years ended	December	31,	2014,	2013	and	2012,	respectively.	The	balance	of	auto loans	modified	in	TDRs	that	experienced	a	payment	default,	and	for	which	the payment	default	occurred	within	one	year	of	the	modification,	was	$43	million, $54	million,	and	$46	million,	during	the	years	ended	December	31,	2014,	2013, and	2012,	respectively.	A	payment	default	is	deemed	to	occur	as	follows:	(1)	for scored	auto	and	business	banking	loans,	when	the	loan	is	two	payments	past	due; and	(2)	for	risk-rated	business	banking	loans	and	auto	loans,	when	the	borrower has	not	made	a	loan	payment	by	its	scheduled	due	date	after	giving	effect	to	the contractual	grace	period,	if	any.

In	May	2014	the	Firm	began	extending	the	deferment	period	for	up	to	24	months for	certain	student	loans,	which	resulted	in	extending	the	maturity	of	the	loans	at their	original	contractual	interest	rates.	These	modified	loans	are	considered TDRs	and	placed	on	nonaccrual	status.

# 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	by	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	the	fourth	quarter	of	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,	2014,	to	have	a	remaining	weighted-average	life	of	8	years.

# Residential	real	estate	–	PCI	loans

The	table	below	sets	forth	information	about	the	Firm's	consumer,	excluding	credit	card,	PCI	loans.

| (in	millions,	except	ratios) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Carrying\tvalue(a) | $17,095 | $18,927 | $10,220 | $12,038 | $3,673 | $4,175 | $15,708 | $17,915 | $46,696 | $53,055 |
| Related\tallowance\tfor\tloan\tlosses(b) | 1,758 | 1,758 | 1,193 | 1,726 | 180 | 180 | 194 | 494 | 3,325 | 4,158 |
| Loan\tdelinquency\t(based\ton\tunpaid\tprincipal\tbalance) |  |  |  |  |  |  |  |  |  |  |
| Current | $16,295 | $18,135 | $8,912 | $10,118 | $3,565 | $4,012 | $13,814 | $15,501 | $42,586 | $47,766 |
| 30–149\tdays\tpast\tdue | 445 | 583 | 500 | 589 | 536 | 662 | 858 | 1,006 | 2,339 | 2,840 |
| 150\tor\tmore\tdays\tpast\tdue | 1,000 | 1,112 | 837 | 1,169 | 551 | 797 | 1,824 | 2,716 | 4,212 | 5,794 |
| Total\tloans | $17,740 | $19,830 | $10,249 | $11,876 | $4,652 | $5,471 | $16,496 | $19,223 | $49,137 | $56,400 |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tloans | 8.15% | 8.55% | 13.05% | 14.80% | 23.37% | 26.67% | 16.26% | 19.36% | 13.33% | 15.31% |
| Current\testimated\tLTV\tratios\t(based\ton\tunpaid\tprincipal\nbalance)(c)(d) |  |  |  |  |  |  |  |  |  |  |
| Greater\tthan\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | $513 | $1,168 | $45 | $240 | $34 | $115 | $89 | $301 | $681 | $1,824 |
| Less\tthan\t660 | 273 | 662 | 97 | 290 | 160 | 459 | 150 | 575 | 680 | 1,986 |
| 101%\tto\t125%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 2,245 | 3,248 | 456 | 1,017 | 215 | 316 | 575 | 1,164 | 3,491 | 5,745 |
| Less\tthan\t660 | 1,073 | 1,541 | 402 | 884 | 509 | 919 | 771 | 1,563 | 2,755 | 4,907 |
| 80%\tto\t100%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 4,171 | 4,473 | 2,154 | 2,787 | 519 | 544 | 2,418 | 3,311 | 9,262 | 11,115 |
| Less\tthan\t660 | 1,647 | 1,782 | 1,316 | 1,699 | 1,006 | 1,197 | 1,996 | 2,769 | 5,965 | 7,447 |
| Lower\tthan\t80%\tand\trefreshed\tFICO\tscores: |  |  |  |  |  |  |  |  |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 5,824 | 5,077 | 3,663 | 2,897 | 719 | 521 | 6,593 | 5,671 | 16,799 | 14,166 |
| Less\tthan\t660 | 1,994 | 1,879 | 2,116 | 2,062 | 1,490 | 1,400 | 3,904 | 3,869 | 9,504 | 9,210 |
| Total\tunpaid\tprincipal\tbalance | $17,740 | $19,830 | $10,249 | $11,876 | $4,652 | $5,471 | $16,496 | $19,223 | $49,137 | $56,400 |
| Geographic\tregion\t(based\ton\tunpaid\tprincipal\tbalance) |  |  |  |  |  |  |  |  |  |  |
| California | $10,671 | $11,937 | $5,965 | $6,845 | $1,138 | $1,293 | $9,190 | $10,419 | $26,964 | $30,494 |
| New\tYork | 876 | 962 | 672 | 807 | 463 | 563 | 933 | 1,196 | 2,944 | 3,528 |
| Illinois | 405 | 451 | 301 | 353 | 229 | 283 | 397 | 481 | 1,332 | 1,568 |
| Florida | 1,696 | 1,865 | 689 | 826 | 432 | 526 | 1,440 | 1,817 | 4,257 | 5,034 |
| Texas | 273 | 327 | 92 | 106 | 281 | 328 | 85 | 100 | 731 | 861 |
| New\tJersey | 348 | 381 | 279 | 334 | 165 | 213 | 553 | 701 | 1,345 | 1,629 |
| Arizona | 323 | 361 | 167 | 187 | 85 | 95 | 227 | 264 | 802 | 907 |
| Washington | 959 | 1,072 | 225 | 266 | 95 | 112 | 395 | 463 | 1,674 | 1,913 |
| Michigan | 53 | 62 | 166 | 189 | 130 | 145 | 182 | 206 | 531 | 602 |
| Ohio | 20 | 23 | 48 | 55 | 72 | 84 | 69 | 75 | 209 | 237 |
| All\tother | 2,116 | 2,389 | 1,645 | 1,908 | 1,562 | 1,829 | 3,025 | 3,501 | 8,348 | 9,627 |
| Total\tunpaid\tprincipal\tbalance | $17,740 | $19,830 | $10,249 | $11,876 | $4,652 | $5,471 | $16,496 | $19,223 | $49,137 | $56,400 |

(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.

(d) Refreshed	FICO	scores	represent	each	borrower's	most	recent	credit	score,	which	is	obtained	by	the	Firm	on	at	least	a	quarterly	basis.

Approximately	20%	of	the	PCI	home	equity	portfolio	are	senior	lien	loans;	the	remaining	balance	are	junior	lien	HELOANs	or	HELOCs.	The	following	tables	set	forth delinquency	statistics	for	PCI	junior	lien	home	equity	loans	and	lines	of	credit	based	on	unpaid	principal	balance	as	of	December	31,	2014	and	2013.

| December	31,	2014 |  |  | 150+	days |  | Total	30+	day |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratios) | 30–89\tdays\tpast\tdue | 90–149\tdays\tpast\tdue | \tpast\tdue | Total\tloans | delinquency\trate |
| HELOCs:(a) |  |  |  |  |  |
| Within\tthe\trevolving\tperiod(b) | $155 | $50 | $371 | $8,972 | 6.42% |
| Beyond\tthe\trevolving\tperiod(c) | 76 | 24 | 166 | 4,143 | 6.42 |
| HELOANs | 20 | 7 | 38 | 736 | 8.83 |
| Total | $251 | $81 | $575 | $13,851 | 6.55% |

| December	31,	2013 |  |  | 150+	days | Total	loans | Total	30+	day |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (in\tmillions,\texcept\tratios) | 30–89\tdays\tpast\tdue | 90–149\tdays\tpast\tdue | \tpast\tdue |  | delinquency\trate |
| HELOCs:(a) |  |  |  |  |  |
| Within\tthe\trevolving\tperiod(b) | $243 | $88 | $526 | $12,670 | 6.76% |
| Beyond\tthe\trevolving\tperiod(c) | 54 | 21 | 82 | 2,336 | 6.72 |
| HELOANs | 24 | 11 | 39 | 908 | 8.15 |
| Total | $321 | $120 | $647 | $15,914 | 6.84% |

(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,	2014,	2013	and	2012,	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) | 2014 | 2013 | 2012 |
| Beginning\tbalance | $16,167 | $18,457 | $19,072 |
| Accretion\tinto\tinterest\tincome | (1,934) | (2,201) | (2,491) |
| Changes\tin\tinterest\trates\ton\tvariable-rate\tloans | (174) | (287) | (449) |
| Other\tchanges\tin\texpected\tcash\tflows(a) | 533 | 198 | 2,325 |
| Balance\tat\tDecember\t31 | $14,592 | $16,167 | $18,457 |
| Accretable\tyield\tpercentage | 4.19% | 4.31% | 4.38% |

(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	year	ended 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.	For	the	year	ended	December	31,	2012,	other	changes	in	expected	cash	flows	were	principally	driven	by	the	impact	of modifications,	but	also	related	to	changes	in	prepayment	assumptions.

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.

Since	the	date	of	acquisition,	the	decrease	in	the	accretable	yield	percentage	has been	primarily	related	to	a	decrease	in	interest	rates	on	variable-rate	loans	and,	to a	lesser	extent,	extended	loan	liquidation	periods.	Certain	events,	such	as extended	or	shortened	loan	liquidation	periods,	affect	the	timing	of	expected	cash flows	and	the	accretable	yield	percentage,	but	not	the	amount	of	cash	expected	to be	received	(i.e.,	the	accretable	yield	balance).	While	extended

loan	liquidation	periods	reduce	the	accretable	yield	percentage	(because	the	same accretable	yield	balance	is	recognized	against	a	higher-than-expected	loan balance	over	a	longer-than-expected	period	of	time),	shortened	loan	liquidation periods	would	have	the	opposite	effect.

At	December	31,	2014	and	2013,	the	Firm	had	PCI	residential	real	estate	loans with	an	unpaid	principal	balance	of	$3.2	billion	and	$4.8	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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Net\tcharge-offs | $3,429 | $3,879 |
| %\tof\tnet\tcharge-offs\tto\tretained\tloans | 2.75% | 3.14% |
| Loan\tdelinquency |  |  |
| Current\tand\tless\tthan\t30\tdays\tpast\tdue\nand\tstill\taccruing | $126,189 | $125,335 |
| 30–89\tdays\tpast\tdue\tand\tstill\taccruing | 943 | 1,108 |
| 90\tor\tmore\tdays\tpast\tdue\tand\tstill\taccruing | 895 | 1,022 |
| Nonaccrual\tloans | — | — |
| Total\tretained\tcredit\tcard\tloans | $128,027 | $127,465 |
| Loan\tdelinquency\tratios |  |  |
| %\tof\t30+\tdays\tpast\tdue\tto\ttotal\tretained\tloans | 1.44% | 1.67% |
| %\tof\t90+\tdays\tpast\tdue\tto\ttotal\tretained\tloans | 0.70 | 0.80 |
| Credit\tcard\tloans\tby\tgeographic\tregion |  |  |
| California | $17,940 | $17,194 |
| Texas | 11,088 | 10,400 |
| New\tYork | 10,940 | 10,497 |
| Illinois | 7,497 | 7,412 |
| Florida | 7,398 | 7,178 |
| New\tJersey | 5,750 | 5,554 |
| Ohio | 4,707 | 4,881 |
| Pennsylvania | 4,489 | 4,462 |
| Michigan | 3,552 | 3,618 |
| Virginia | 3,263 | 3,239 |
| All\tother | 51,403 | 53,030 |
| Total\tretained\tcredit\tcard\tloans | $128,027 | $127,465 |
| Percentage\tof\tportfolio\tbased\ton\tcarrying\tvalue\nwith\testimated\trefreshed\tFICO\tscores |  |  |
| Equal\tto\tor\tgreater\tthan\t660 | 85.7% | 85.1% |
| Less\tthan\t660 | 14.3 | 14.9 |

# 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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Impaired\tcredit\tcard\tloans\twith\tan\tallowance(a)(b) |  |  |
| Credit\tcard\tloans\twith\tmodified\tpayment\tterms(c) | $1,775 | $2,746 |
| Modified\tcredit\tcard\tloans\tthat\thave\treverted\tto\tpre-\nmodification\tpayment\tterms(d) | 254 | 369 |
| Total\timpaired\tcredit\tcard\tloans(e) | $2,029 | $3,115 |
| Allowance\tfor\tloan\tlosses\trelated\tto\timpaired\tcredit\tcard\nloans | $500 | $971 |

(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,	2014	and	2013,	$159	million	and	$226 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	$95	million	and	$143 million	at	December	31,	2014	and	2013,	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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Average\timpaired\tcredit\tcard\tloans | $2,503 | $3,882 | $5,893 |
| Interest\tincome\ton\n\t\timpaired\tcredit\tcard\tloans | 123 | 198 | 308 |

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,	2014,	2013	and	2012,	were	$807	million,	$1.2	billion	and	$1.7 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 | 2014<br>14.96% | 2013<br>15.37% | 2012<br>15.67% |
| :--- | :--- | :--- | :--- |
| Weighted-average\tinterest\trate\tof\tloans\t–\nafter\tTDR | 4.40 | 4.38 | 5.19 |
| Loans\tthat\tredefaulted\twithin\tone\tyear\nof\tmodification(a) | $119 | $167 | $309 |

(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	27.91%,	30.72% and	38.23%	as	of	December	31,	2014,	2013	and	2012,	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.

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.

Risk	ratings	are	reviewed	on	a	regular	and	ongoing	basis	by	Credit	Risk Management	and	are	adjusted	as	necessary	for

The	table	below	provides	information	by	class	of	receivable	for	the	retained	loans	in	the	Wholesale	portfolio	segment.

| As	of	or	for	the	year	ended | Commercial<br>and	industrial |  | Real	estate |  | Financial<br>institutions |  | Government	agencies | Government	agencies | Other(d) |  | Total<br>retained	loans |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31, |  |  |  |  |  |  |  |  |  |  |  |  |
| (in\tmillions,\texcept\tratios) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Loans\tby\trisk\tratings |  |  |  |  |  |  |  |  |  |  |  |  |
| Investment\tgrade | $63,069 | $57,690 | $61,006 | $52,195 | $27,111 | $26,712 | $8,393 | $9,979 | $82,087 | $79,494 | $241,666 | $226,070 |
| Noninvestment\tgrade: |  |  |  |  |  |  |  |  |  |  |  |  |
| Noncriticized | 44,117 | 43,477 | 16,541 | 14,381 | 7,085 | 6,674 | 300 | 440 | 10,075 | 10,992 | 78,118 | 75,964 |
| Criticized\tperforming | 2,251 | 2,385 | 1,313 | 2,229 | 316 | 272 | 3 | 42 | 236 | 480 | 4,119 | 5,408 |
| Criticized\tnonaccrual | 188 | 294 | 253 | 346 | 18 | 25 | — | 1 | 140 | 155 | 599 | 821 |
| Total\tnoninvestment\tgrade | 46,556 | 46,156 | 18,107 | 16,956 | 7,419 | 6,971 | 303 | 483 | 10,451 | 11,627 | 82,836 | 82,193 |
| Total\tretained\tloans | $109,625 | $103,846 | $79,113 | $69,151 | $34,530 | $33,683 | $8,696 | $10,462 | $92,538 | $91,121 | $324,502 | $308,263 |
| %\tof\ttotal\tcriticized\tto\ttotal\nretained\tloans | 2.22% | 2.58% | 1.98\t% | 3.72% | 0.97\t% | 0.88\t% | 0.03% | 0.41% | 0.41\t% | 0.70% | 1.45% | 2.02% |
| %\tof\tnonaccrual\tloans\tto\ttotal\nretained\tloans | 0.17 | 0.28 | 0.32 | 0.50 | 0.05 | 0.07 | — | 0.01 | 0.15 | 0.17 | 0.18 | 0.27 |
| Loans\tby\tgeographic\ndistribution(a) |  |  |  |  |  |  |  |  |  |  |  |  |
| Total\tnon-U.S. | $33,739 | $34,440 | $2,099 | $1,369 | $20,944 | $22,726 | $1,122 | $2,146 | $42,961 | $43,376 | $100,865 | $104,057 |
| Total\tU.S. | 75,886 | 69,406 | 77,014 | 67,782 | 13,586 | 10,957 | 7,574 | 8,316 | 49,577 | 47,745 | 223,637 | 204,206 |
| Total\tretained\tloans | $109,625 | $103,846 | $79,113 | $69,151 | $34,530 | $33,683 | $8,696 | $10,462 | $92,538 | $91,121 | $324,502 | $308,263 |
| Net\tcharge-offs/(recoveries) | $22 | $99 | $(9) | $6 | $(12) | $(99) | $25 | $1 | $(14) | $9 | $12 | $16 |
| %\tof\tnet\tcharge- |  |  |  |  |  |  |  |  |  |  |  |  |
| offs/(recoveries)\tto\tend-of- |  |  |  |  |  |  |  |  |  |  |  |  |
| period\tretained\tloans | 0.02% | 0.10% | (0.01)% | 0.01% | (0.04)% | (0.29)% | 0.29% | 0.01% | (0.02)% | 0.01% | —% | 0.01% |
| Loan\tdelinquency(b) |  |  |  |  |  |  |  |  |  |  |  |  |
| Current\tand\tless\tthan\t30\tdays\npast\tdue\tand\tstill\taccruing | $108,857 | $103,357 | $78,552 | $68,627 | $34,408 | $33,426 | $8,627 | $10,421 | $91,168 | $89,717 | $321,612 | $305,548 |
| 30–89\tdays\tpast\tdue\tand\tstill\naccruing | 566 | 181 | 275 | 164 | 104 | 226 | 69 | 40 | 1,201 | 1,233 | 2,215 | 1,844 |
| 90\tor\tmore\tdays\tpast\tdue\tand\nstill\taccruing(c) | 14 | 14 | 33 | 14 | — | 6 | — | — | 29 | 16 | 76 | 50 |
| Criticized\tnonaccrual | 188 | 294 | 253 | 346 | 18 | 25 | — | 1 | 140 | 155 | 599 | 821 |
| Total\tretained\tloans | $109,625 | $103,846 | $79,113 | $69,151 | $34,530 | $33,683 | $8,696 | $10,462 | $92,538 | $91,121 | $324,502 | $308,263 |

(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.	For	a	discussion	of	more	significant	risk	factors,	see	pages	255–256	of	this	Note.

(c) Represents	loans	that	are	considered	well-collateralized	and	therefore	still	accruing interest.

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) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Real\testate\tretained\tloans | $51,049 | $44,389 | $17,438 | $15,949 | $4,264 | $3,674 | $6,362 | $5,139 | $79,113 | $69,151 |
| Criticized | 652 | 1,142 | 841 | 1,323 | 42 | 81 | 31 | 29 | 1,566 | 2,575 |
| %\tof\tcriticized\tto\ttotal\treal\testate\nretained\tloans | 1.28% | 2.57% | 4.82% | 8.30% | 0.98% | 2.20% | 0.49% | 0.56% | 1.98% | 3.72% |
| Criticized\tnonaccrual | $126 | $191 | $110 | $143 | $— | $3 | $17 | $9 | $253 | $346 |
| %\tof\tcriticized\tnonaccrual\tto\ttotal\treal\nestate\tretained\tloans | 0.25% | 0.43% | 0.63% | 0.90% | —% | 0.08% | 0.27% | 0.18% | 0.32% | 0.50% |

# Wholesale	impaired	loans	and	loan	modifications

Wholesale	impaired	loans	are	comprised	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) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 |  | 2013 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Impaired\tloans |  |  |  |  |  |  |  |  |  |  |  |  |  |
| With\tan\tallowance | $174 | $236 | $193 | $258 | $15 | $17 | $— | $1 | $89 | $85 | $471 |  | $597 |
| Without\tan\tallowance(a) | 24 | 58 | 87 | 109 | 3 | 8 | — | — | 52 | 73 | 166 |  | 248 |
| Total\timpaired\tloans | $198 | $294 | $280 | $367 | $18 | $25 | $— | $1 | $141 | $158 | $637 | (c) | $845 |
| Allowance\tfor\tloan\tlosses\trelated\tto\timpaired\nloans | $34 | $75 | $36 | $63 | $4 | $16 | $— | $— | $13 | $27 | $87 |  | $181 |
| Unpaid\tprincipal\tbalance\tof\timpaired\tloans(b) | 266 | 448 | 345 | 454 | 22 | 24 | — | 1 | 202 | 241 | 835 |  | 1,168 |

(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,	2014	and	2013.	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,	predominantly	all	wholesale	impaired	loans	are	in	the

The	following	table	presents	the	Firm's	average	impaired	loans	for	the	years	ended	2014,	2013	and	2012.

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Commercial\tand\tindustrial | $243 | $412 | $873 |
| Real\testate | 297 | 484 | 784 |
| Financial\tinstitutions | 20 | 17 | 17 |
| Government\tagencies | — | — | 9 |
| Other | 155 | 211 | 277 |
| Total(a) | $715 | $1,124 | $1,960 |

(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,	2014,	2013	and 2012.

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,	2014	and	2013.

# 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 2014,	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	differentiated	by	risk	rating	and expected	maturity.	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 to	that	loan.	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, 2014,	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	loans	and	lending-related	commitments	by	impairment	methodology

The	table	below	summarizes	information	about	the	allowance	for	loan	losses,	loans	by	impairment	methodology,	the	allowance	for	lending-related	commitments	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, | $8,456 | $3,795 |  | $4,013 | $16,264 |
| Gross\tcharge-offs | 2,132 | 3,831 |  | 151 | 6,114 |
| Gross\trecoveries | (814) | (402) |  | (139) | (1,355) |
| Net\tcharge-offs/(recoveries) | 1,318 | 3,429 |  | 12 | 4,759 |
| Write-offs\tof\tPCI\tloans(a) | 533 | — |  | — | 533 |
| Provision\tfor\tloan\tlosses | 414 | 3,079 |  | (269) | 3,224 |
| Other | 31 | (6) |  | (36) | (11) |
| Ending\tbalance\tat\tDecember\t31, | $7,050 | $3,439 |  | $3,696 | $14,185 |
| Allowance\tfor\tloan\tlosses\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific(b) | $539 | $500 | (c) | $87 | $1,126 |
| Formula-based | 3,186 | 2,939 |  | 3,609 | 9,734 |
| PCI | 3,325 | — |  | — | 3,325 |
| Total\tallowance\tfor\tloan\tlosses | $7,050 | $3,439 |  | $3,696 | $14,185 |
| Loans\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific | $12,020 | $2,029 |  | $637 | $14,686 |
| Formula-based | 236,263 | 125,998 |  | 323,861 | 686,122 |
| PCI | 46,696 | — |  | 4 | 46,700 |
| Total\tretained\tloans | $294,979 | $128,027 |  | $324,502 | $747,508 |
| Impaired\tcollateral-dependent\tloans |  |  |  |  |  |
| Net\tcharge-offs | $133 | $— |  | $21 | $154 |
| Loans\tmeasured\tat\tfair\tvalue\tof\tcollateral\tless\tcost\tto\tsell | 3,025 | — |  | 326 | 3,351 |
| Allowance\tfor\tlending-related\tcommitments |  |  |  |  |  |
| Beginning\tbalance\tat\tJanuary\t1, | $8 | $— |  | $697 | $705 |
| Provision\tfor\tlending-related\tcommitments | 5 | — |  | (90) | (85) |
| Other | — | — |  | 2 | 2 |
| Ending\tbalance\tat\tDecember\t31, | $13 | $— |  | $609 | $622 |
| Allowance\tfor\tlending-related\tcommitments\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific | $— | $— |  | $60 | $60 |
| Formula-based | 13 | — |  | 549 | 562 |
| Total\tallowance\tfor\tlending-related\tcommitments | $13 | $— |  | $609 | $622 |
| Lending-related\tcommitments\tby\timpairment\tmethodology |  |  |  |  |  |
| Asset-specific | $— | $— |  | $103 | $103 |
| Formula-based | 58,153 | 525,963 |  | 471,953 | 1,056,069 |
| Total\tlending-related\tcommitments | $58,153 | $525,963 |  | $472,056 | $1,056,172 |

(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.

| Consumer,<br>excluding<br>credit	card | Credit	card | 2013 | Wholesale | Total | Consumer,<br>excluding<br>credit	card | 2012<br>Credit	card | Wholesale | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $12,292 | $5,501 |  | $4,143 | $21,936 | $16,294 | $6,999 | $4,316 | $27,609 |
| 2,754 | 4,472 |  | 241 | 7,467 | 4,805 | 5,755 | 346 | 10,906 |
| (847) | (593) |  | (225) | (1,665) | (508) | (811) | (524) | (1,843) |
| 1,907 | 3,879 |  | 16 | 5,802 | 4,297 | 4,944 | (178) | 9,063 |
| 53 | — |  | — | 53 | — | — | — | — |
| (1,872) | 2,179 |  | (119) | 188 | 302 | 3,444 | (359) | 3,387 |
| (4) | (6) |  | 5 | (5) | (7) | 2 | 8 | 3 |
| $8,456 | $3,795 |  | $4,013 | $16,264 | $12,292 | $5,501 | $4,143 | $21,936 |
| $601 | $971 | (c) | $181 | $1,753 | $729 | (c)\n$1,681 | $319 | $2,729 |
| 3,697 | 2,824 |  | 3,832 | 10,353 | 5,852 | 3,820 | 3,824 | 13,496 |
| 4,158 | — |  | — | 4,158 | 5,711 | — | — | 5,711 |
| $8,456 | $3,795 |  | $4,013 | $16,264 | $12,292 | $5,501 | $4,143 | $21,936 |
| $13,785 | $3,115 |  | $845 | $17,745 | $13,938 | $4,762 | $1,475 | $20,175 |
| 221,609 | 124,350 |  | 307,412 | 653,371 | 218,945 | 123,231 | 304,728 | 646,904 |
| 53,055 | — |  | 6 | 53,061 | 59,737 | — | 19 | 59,756 |
| $288,449 | $127,465 |  | $308,263 | $724,177 | $292,620 | $127,993 | $306,222 | $726,835 |
| $235 | $— |  | $37 | $272 | $973 | $— | $77 | $1,050 |
| 3,105 | — |  | 362 | 3,467 | 3,272 | — | 445 | 3,717 |
| $7 | $— |  | $661 | $668 | $7 | $— | $666 | $673 |
| 1 | — |  | 36 | 37 | — | — | (2) | (2) |
| — | — |  | — | — | — | — | (3) | (3) |
| $8 | $— |  | $697 | $705 | $7 | $— | $661 | $668 |
| $— | $— |  | $60 | $60 | $— | $— | $97 | $97 |
| 8 | — |  | 637 | 645 | 7 | — | 564 | 571 |
| $8 | $— |  | $697 | $705 | $7 | $— | $661 | $668 |
| $— | $— |  | $206 | $206 | $— | $— | $355 | $355 |
| 56,057 | 529,383 |  | 446,026 | 1,031,466 | 60,156 | 533,018 | 434,459 | 1,027,633 |
| $56,057 | $529,383 |  | $446,232 | $1,031,672 | $60,156 | $533,018 | $434,814 | $1,027,988 |

# 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	principal	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:	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,	may	be	involved	with	entities	that	are	deemed	VIEs.	However,	the	Firm's	private	equity	business	is	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	268	of	this	Note.

# Significant	Firm-sponsored	variable	interest	entities

# Credit	card	securitizations

The	Card	business	securitizes	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,	2014	and	2013,	the	Firm	held	undivided interests	in	Firm-sponsored	credit	card	securitization	trusts	of	$10.9	billion	and $14.3	billion,	respectively.	The	Firm	maintained	an	average	undivided	interest	in principal	receivables	owned	by	those	trusts	of	approximately	22%	and	30%	for the	years	ended	December	31,	2014	and	2013,	respectively.	The	Firm	also retained	$40	million	and	$130	million	of	senior	securities	and	$5.3	billion	and $5.5	billion	of	subordinated	securities	in	certain	of	its	credit	card	securitization trusts	as	of	December	31,	2014	and	2013,	respectively.	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 automobile	and	student	loans)	primarily	in	its	CCB	and	CIB	businesses.

Depending	on	the	particular	transaction,	as	well	as	the	line	of	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	269	of	this	Note	for	further	information	regarding	the	Firm's	cash	flows	with	and	interests	retained	in	nonconsolidated	VIEs,	and	pages 269–270	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,\t2014\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 | $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 |

|  |  | Principal	amount	outstanding |  | JPMorgan	Chase	interest	in	securitized	assets	in | nonconsolidated	VIEs(c)(d)(e) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2013(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 | $109.2 | $3.2 | $90.4 | $0.5 | $0.3 | $0.8 |
| Subprime | 32.1 | 1.3 | 28.0 | 0.1 | — | 0.1 |
| Commercial\tand\tother(b) | 130.4 | — | 98.0 | 0.5 | 3.5 | 4.0 |
| Total | $271.7 | $4.5 | $216.4 | $1.1 | $3.8 | $4.9 |

(a) Excludes	U.S.	government	agency	securitizations.	See	pages	269–270	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	$136	million	and	$34	million,	respectively,	at	December	31,	2014,	and	$151	million	and	$30	million,	respectively,	at	December	31,	2013,	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,	2014	and	2013,	77%	and	69%,	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	$1.1	billion	and	$551	million	of	investment-grade	and	$185	million	and	$260	million	of	noninvestment-grade	retained interests	at	December	31,	2014	and	2013,	respectively.	The	retained	interests	in	commercial	and	other	securitizations	trusts	consisted	of	 $3.7	billion	and	$3.9	billion	of	investment-grade	and	$194 million	and	$80	million	of	noninvestment-grade	retained	interests	at	December	31,	2014	and	2013,	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	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	upon	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	268	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,	2014	and	2013,	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	268	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	268	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	268	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	(Fannie	Mae,	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,	2014,	2013	and	2012,	the	Firm	transferred $22.7	billion,	$25.3	billion	and	$10.0	billion,	respectively,	of	securities	to	agency VIEs,	and	$1.1	billion,	$55	million	and	$286	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 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,	2014	and	2013,	the	Firm	did	not	consolidate	any	agency	re- securitizations.	As	of	December	31,	2014	and	2013,	the	Firm	consolidated	assets of	$77	million	and	$86	million,	respectively,	and	liabilities	of	$21	million	and $23	million,	respectively,	of

private-label	re-securitizations.	See	the	table	on	page	268	of	this	Note	for	more information	on	the	consolidated	re-securitization	transactions.

As	of	December	31,	2014	and	2013,	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	$2.9 billion	and	$2.8	billion,	respectively.	At	December	31,	2014	and	2013,	the	Firm held	approximately	$2.4	billion	and	$1.3	billion,	respectively,	of	interests	in nonconsolidated	agency	re-securitization	entities,	and	$36	million	and	$6	million, respectively,	of	senior	and	subordinated	interests	in	nonconsolidated	private-label re-securitization	entities.	See	the	table	on	page	263	of	this	Note	for	further information	on	interests	held	in	nonconsolidated	securitizations.

# Multi-seller	conduits

Multi-seller	conduit	entities	are	separate	bankruptcy	remote	entities	that	purchase interests	in,	and	make	loans	secured	by,	pools	of	receivables	and	other	financial assets	pursuant	to	agreements	with	customers	of	the	Firm.	The	conduits	fund	their purchases	and	loans	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	purchase	interests	in	or	make	loans	secured	by	pools	of receivables	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	268	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	$5.7	billion	and	$4.1	billion	of	the	commercial	paper	issued	by	the Firm-administered	multi-seller	conduits	at	December	31,	2014	and	2013, 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	$9.9	billion	and	$9.1	billion	at	December	31, 2014	and	2013,	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,	credit-related	note	vehicles	and	asset	swap	vehicles.

# Municipal	bond	vehicles

The	Firm	has	created	a	series	of	trusts	that	provide	short-term	investors	with qualifying	tax-exempt	investments,	and	that	allow	investors	in	tax-exempt securities	to	finance	their	investments	at	short-term	tax-exempt	rates.	In	a	typical transaction,	the	vehicle	purchases	fixed-rate	longer-term	highly	rated	municipal bonds	and	funds	the	purchase	by	issuing	two	types	of	securities:	(1)	puttable floating-rate	certificates	and	(2)	inverse	floating-rate	residual	interests	("residual interests").	The	maturity	of	each	of	the	puttable	floating-rate	certificates	and	the residual	interests	is	equal	to	the	life	of	the	vehicle,	while	the	maturity	of	the underlying	municipal	bonds	is	typically	longer.	Holders	of	the	puttable	floating- rate	certificates	may	"put,"	or	tender,	the	certificates	if	the	remarketing	agent cannot	successfully	remarket	the	floating-rate	certificates	to	another	investor.	A liquidity	facility	conditionally	obligates	the	liquidity	provider	to	fund	the purchase	of	the	tendered	floating-rate	certificates.	Upon	termination	of	the vehicle,	proceeds	from

the	sale	of	the	underlying	municipal	bonds	would	first	repay	any	funded	liquidity facility	or	outstanding	floating-rate	certificates	and	the	remaining	amount,	if	any, would	be	paid	to	the	residual	interests.	If	the	proceeds	from	the	sale	of	the underlying	municipal	bonds	are	not	sufficient	to	repay	the	liquidity	facility,	in certain	transactions	the	liquidity	provider	has	recourse	to	the	residual	interest holders	for	reimbursement.	Certain	residual	interest	holders	may	be	required	to post	collateral	with	the	Firm,	as	liquidity	provider,	to	support	such	reimbursement obligations	should	the	market	value	of	the	municipal	bonds	decline.

JPMorgan	Chase	Bank,	N.A.	often	serves	as	the	sole	liquidity	provider,	and	J.P. Morgan	Securities	LLC	serves	as	remarketing	agent,	of	the	puttable	floating-rate certificates.	The	liquidity	provider's	obligation	to	perform	is	conditional	and	is limited	by	certain	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	Firm's	exposure	as	liquidity provider	is	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	interest	holders.

The	long-term	credit	ratings	of	the	puttable	floating	rate	certificates	are	directly related	to	the	credit	ratings	of	the	underlying	municipal	bonds,	the	credit	rating	of any	insurer	of	the	underlying	municipal	bond,	and	the	Firm's	short-term	credit rating	as	liquidity	provider.	A	downgrade	in	any	of	these	ratings	would	affect	the rating	of	the	puttable

floating-rate	certificates	and	could	cause	demand	for	these	certificates	by investors	to	decline	or	disappear.	However,	a	downgrade	of	JPMorgan	Chase Bank,	N.A.'s	short-term	rating	does	not	affect	the	Firm's	obligation	under	the liquidity	facility.

As	remarketing	agent,	the	Firm	may	hold	puttable	floating-rate	certificates	of	the municipal	bond	vehicles.	At	December	31,	2014	and	2013,	the	Firm	held $55	million	and	$262	million,	respectively,	of	these	certificates	on	its Consolidated	balance	sheets.	The	largest	amount	held	by	the	Firm	at	any	end	of day	during	2014	was	$250	million,	or	3.0%,	of	the	municipal	bond	vehicles' aggregate	outstanding	puttable	floating-rate	certificates.	The	Firm	did	not	have and	continues	not	to	have	any	intent	to	protect	any	residual	interest	holder	from potential	losses	on	any	of	the	municipal	bond	holdings.

The	Firm	consolidates	municipal	bond	vehicles	if	it	owns	the	residual	interest. The	residual	interest	generally	allows	the	owner	to	make	decisions	that significantly	impact	the	economic	performance	of	the	municipal	bond	vehicle, primarily	by	directing	the	sale	of	the	municipal	bonds	owned	by	the	vehicle.	In addition,	the	residual	interest	owners	have	the	right	to	receive	benefits	and	bear losses	that	could	potentially	be	significant	to	the	municipal	bond	vehicle.	The Firm	does	not	consolidate	municipal	bond	vehicles	if	it	does	not	own	the	residual interests,	since	the	Firm	does	not	have	the	power	to	make	decisions	that significantly	impact	the	economic	performance	of	the	municipal	bond	vehicle. See	page	268	of	this	Note	for	further	information	on	consolidated	municipal	bond vehicles.

The	Firm's	exposure	to	nonconsolidated	municipal	bond	VIEs	at	December	31,	2014	and	2013,	including	the	ratings	profile	of	the	VIEs'	assets,	was	as	follows.

| December	31,<br>(in	billions) |  | Fair	value	of	assets	held	by<br>VIEs | Liquidity	facilities | Excess/(deficit)(a) | Maximum	exposure |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Nonconsolidated\tmunicipal\tbond\tvehicles |  |  |  |  |  |
|  | 2014 | $11.5 | $6.3 | $5.2 | $6.3 |
|  | 2013 | 11.8 | 6.9 | 4.9 | 6.9 |

|  |  |  | Investment-grade | Investment-grade |  | Noninvestment-	grade | Fair	value	of | Wt.	avg.	expected |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tbillions,\texcept\twhere\totherwise\tnoted) |  | AAA\tto\tAAA- | AA+\tto\tAA- | A+\tto\tA- | BBB+\tto\tBBB- | BB+\tand\tbelow | assets\theld\tby\nVIEs | life\tof\tassets\n(years) |
|  | 2014 | $2.7 | $8.4 | $0.4 | $— | $— | $11.5 | 4.9 |
|  | 2013 | 2.7 | 8.9 | 0.2 | — | — | $11.8 | 7.2 |

(a) Represents	the	excess/(deficit)	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.

# Credit-related	note	and	asset	swap	vehicles

# Credit-related	note	vehicles

The	Firm	structures	transactions	with	credit-related	note	vehicles	in	which	the VIE	purchases	highly	rated	assets	(generally	investment-grade),	such	as government	bonds,	corporate	bonds	or	asset-backed	securities,	and	enters	into	a credit	derivative	contract	with	the	Firm	to	obtain	exposure	to	a	referenced	credit which	the	VIE	otherwise	does	not	hold.	The	VIE	then	issues	credit-linked	notes ("CLNs")	to	transfer	the	risk	of	the	referenced	credit	to	the	VIE's	investors. Clients	and	investors	often	prefer	using	a	CLN	vehicle	since	they	may	be	of	the view	that	the	CLNs	issued	by	the	VIE	is	of	a	higher	credit	quality	than	equivalent notes	issued	directly	by	JPMorgan	Chase.	The	Firm	divides	its	credit-related	note structures	broadly	into	two	types:	static	and	managed.	In	a	static	credit-related note	structure,	the	CLNs	and	associated	credit	derivative	contract	either	reference a	single	credit	(e.g.,	a	multi-national	corporation),	or	all	or	part	of	a	fixed portfolio	of	credits.	In	a	managed	credit-related	note	structure,	the	CLNs	and associated	credit	derivative	generally	reference	all	or	part	of	an	actively	managed portfolio	of	credits.

The	Firm's	involvement	with	CLN	vehicles	is	generally	limited	to	being	a derivative	counterparty	and	it	does	not	act	as	a	portfolio	manager	for	managed CLN	VIEs.	The	Firm	does	not	provide	any	additional	contractual	financial support	to	the	VIE	over	and	above	its	contractual	obligations	as	derivative counterparty,	but	may	also	make	a	market	in	the	CLNs	issued	by	such	VIEs, although	it	is	under	no	obligation	to	do	so.	The	Firm	has	not	historically	provided any	financial	support	to	the	CLN	vehicles	over	and	above	its	contractual obligations.	As	a	derivative	counterparty	the	assets	held	by	the	VIE	serve	as collateral	for	any	derivatives	receivables.	As	such	the	collateral	represents	the maximum	exposure	the	Firm	has	to	these	vehicles,	which	was	$5.9	billion	and $8.7	billion	as	of	December	31,	2014	and	2013,	respectively.	The	Firm's maximum	exposure	arises	through	the	derivatives	executed	with	the	VIEs;	the exposure	varies	over	time	with	changes	in	the	fair	value	of	the	derivatives.	The Firm	relies	on	the	collateral	held	by	the	VIEs	to	pay	any	amounts	due	under	the derivatives;	the	vehicles	are	structured	at	inception	so	that	the	par	value	of	the collateral	is	expected	to	be	sufficient	to	pay	amounts	due	under	the	derivative contracts

Since	each	CLN	is	established	to	the	specifications	of	the	investors,	the	investors have	the	power	over	the	activities	of	that	VIE	that	most	significantly	affect	the performance	of	the	CLN.	The	Firm	consolidates	credit-related	note	entities	only in	limited	circumstances	where	it	holds	positions	in	these	entities	that	provided the	Firm	with	control	over	the	entity.	The	Firm	consolidated	credit-related	note vehicles	with	collateral	fair	values	of	$163	million	and	$311	million,	at December	31,	2014	and	2013,	respectively.	These	consolidated	VIEs	included some	that	were	structured	by	the	Firm	where	the	Firm	provides	the	credit derivative,	and

some	that	have	been	structured	by	third	parties	where	the	Firm	is	not	the	credit derivative	provider.

The	Firm	reports	derivatives	with	unconsolidated	CLN	vehicles	as	well	as	any CLNs	that	it	holds	as	market-maker	on	its	Consolidated	balance	sheets	at	fair value	with	changes	in	fair	value	reported	in	principal	transactions	revenue.	The Firm's	exposure	to	non-consolidated	CLN	VIEs	as	of	December	31,	2014	and 2013	was	not	material.

# Asset	swap	vehicles

The	Firm	structures	transactions	with	asset	swap	vehicles	on	behalf	of	investors. In	such	transactions,	the	VIE	purchases	a	specific	asset	or	assets	(substantially	all of	which	are	investment-grade)	and	then	enters	into	a	derivative	with	the	Firm	in order	to	tailor	the	interest	rate	or	foreign	exchange	currency	risk,	or	both, according	to	investors'	requirements.	Investors	typically	invest	in	the	notes	issued by	such	VIEs	in	order	to	obtain	exposure	to	the	credit	risk	of	the	specific	assets, as	well	as	exposure	to	foreign	exchange	and	interest	rate	risk	that	is	tailored	to their	specific	needs.

The	Firm's	involvement	with	asset	swap	vehicles	is	generally	limited	to	being	an interest	rate	or	foreign	exchange	derivative	counterparty.	The	Firm	does	not provide	any	additional	contractual	financial	support	to	the	VIE	over	and	above	its contractual	obligations	as	derivative	counterparty,	but	may	also	make	a	market	in the	notes	issued	by	such	VIEs,	although	it	is	under	no	obligation	to	do	so.	The Firm	has	not	historically	provided	any	financial	support	to	asset	swap	vehicles over	and	above	its	contractual	obligations.	As	a	derivative	counterparty	the	assets held	by	the	VIE	serve	as	collateral	for	any	derivatives	receivables.	As	such	the collateral	represents	the	maximum	exposure	the	Firm	has	to	these	vehicles,	which was	$5.7	billion	and	$7.7	billion	as	of	December	31,	2014	and	2013,	respectively. The	Firm's	maximum	exposure	arises	through	the	derivatives	executed	with	the VIEs;	the	exposure	varies	over	time	with	changes	in	the	fair	value	of	the derivatives.	The	Firm	relies	on	the	collateral	held	by	the	VIEs	to	pay	any	amounts due	under	the	derivatives;	the	vehicles	are	structured	at	inception	so	that	the	par value	of	the	collateral	is	expected	to	be	sufficient	to	pay	amounts	due	under	the derivative	contracts

Since	each	asset	swap	vehicle	is	established	to	the	specifications	of	the	investors, the	investors	have	the	power	over	the	activities	of	that	VIE	that	most	significantly affect	the	performance	of	the	entity.	Accordingly,	the	Firm	does	not	generally consolidate	these	asset	swap	vehicles	and	did	not	consolidate	any	asset	swap vehicles	at	December	31,	2014	and	2013.

The	Firm	reports	derivatives	with	unconsolidated	asset	swap	vehicles	that	it	holds as	market-maker	on	its	Consolidated	balance	sheets	at	fair	value	with	changes	in fair	value	reported	in	principal	transactions	revenue.	The	Firm's	exposure	to	non- consolidated	asset	swap	VIEs	as	of	December	31,	2014	and	2013	was	not material.

# 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,	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,	2014	and	2013.

|  |  | Assets | 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 | 0.1 | 0.1 | 0.2 |
| Total | $9.1 | $68.9 | $1.8 | $79.8 | $52.4 | $0.9 | $53.3 |

|  |  | Assets |  |  |  | Liabilities |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2013\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 | $— | $46.9 | $1.1 | $48.0 | $26.6 | $— | $26.6 |
| Firm-administered\tmulti-seller\tconduits | — | 19.0 | 0.1 | 19.1 | 14.9 | — | 14.9 |
| Municipal\tbond\tvehicles | 3.4 | — | — | 3.4 | 2.9 | — | 2.9 |
| Mortgage\tsecuritization\tentities(b) | 2.3 | 1.7 | — | 4.0 | 2.9 | 0.9 | 3.8 |
| Student\tloan\tsecuritization\tentities | — | 2.4 | 0.1 | 2.5 | 2.2 | — | 2.2 |
| Other | 0.7 | 0.1 | 0.9 | 1.7 | 0.1 | 0.2 | 0.3 |
| Total | $6.4 | $70.1 | $2.2 | $78.7 | $49.6 | $1.1 | $50.7 |

(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,	derivative	receivables,	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	$35.4	billion	and	$31.8	billion	at	December	31,	2014	and	2013,	respectively.	The	maturities	of	the	long-term	beneficial	interests	as	of	December	31,	2014,	were	as	follows: $10.9	billion	under	one	year,	$19.0	billion	between	one	and	five	years,	and	 $5.5	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,	automobile,	student	and	commercial	(primarily	related	to real	estate)	loans,	as	well	as	debt	securities.	The	primary	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	the accounting	criteria	for	a	sale	are	met.	Those	criteria	are:	(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,	2014,	2013	and	2012,	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.

|  | 2014 | 2014 | 2013 | 2013 |  | 2012 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 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 | $2,558 | $11,911 | $1,404 | $11,318 | $— | $5,421 |
| All\tcash\tflows\tduring\tthe\tperiod: |  |  |  |  |  |  |
| Proceeds\tfrom\tnew\tsecuritizations(b) | $2,569 | $12,079 | $1,410 | $11,507 | $— | $5,705 |
| Servicing\tfees\tcollected | 557 | 4 | 576 | 5 | 662 | 4 |
| Purchases\tof\tpreviously\ttransferred\tfinancial\tassets\t(or\tthe\nunderlying\tcollateral)(c) | 121 | — | 294 | — | 222 | — |
| Cash\tflows\treceived\ton\tinterests | 179 | 578 | 156 | 325 | 185 | 163 |

(a) Excludes	re-securitization	transactions.

(b) Proceeds	from	residential	mortgage	securitizations	were	received	in	the	form	of	securities.	During	2014,	 $2.4	billion	of	residential	mortgage	securitizations	were	received	as	securities	and	classified in	level	2,	and	$185	million	were	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	of	the	fair value	hierarchy.	Proceeds	from	commercial	mortgage	securitizations	were	received	as	securities	and	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	as	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.	During	2012,	$5.7	billion	of	commercial	mortgage	securitizations	were	classified	in	level	2	of	the	fair	value	hierarchy.

(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

5.9	and	3.9	for	the	years	ended	December	31,	2014	and	2013,	respectively,	and	weighted-average	discount	rate	of	 3.4%	and	2.5%	for	the	years	ended	December	31,	2014	and	2013,	respectively. There	were	no	residential	mortgage	securitizations	during	2012.	Key	assumptions	used	to	measure	commercial	and	other	retained	interests	originated	during	the	year	included	weighted-average	life (in	years)	of	6.5,	8.3	and	8.8	for	the	years	ended	December	31,	2014,	2013,	and	2012,	respectively,	and	weighted-average	discount	rate	of	 4.8%,	3.2%	and	3.6%	for	the	years	ended	December	31, 2014,	2013	and	2012,	respectively.

(f)	Includes	commercial	and	student	loan	securitizations.

# Loans	and	excess	MSRs	sold	to	the	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	Fannie	Mae	and	Freddie	Mac	(the	"GSEs").	These	loans	and	excess	MSRs	are sold	primarily	for	the	purpose	of	securitization	by	the	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	mortgage	servicing	rights.

The	following	table	summarizes	the	activities	related	to	loans	sold	to	the	GSEs, loans	in	securitization	transactions	pursuant	to	Ginnie	Mae	guidelines,	and	other third-party-sponsored	securitization	entities.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Carrying\tvalue\tof\tloans\tsold(a) | $55,802 | $166,028 | $179,008 |
| Proceeds\treceived\tfrom\tloan\tsales\tas\ncash | $260 | $782 | $195 |
| Proceeds\tfrom\tloans\tsales\tas\nsecurities(b) | 55,117 | 163,373 | 176,592 |
| Total\tproceeds\treceived\tfrom\tloan\nsales(c) | $55,377 | $164,155 | $176,787 |
| Gains\ton\tloan\tsales(d) | $316 | $302 | $141 |

(a) Predominantly	to	the	GSEs	and	in	securitization	transactions	pursuant	to	Ginnie	Mae guidelines.

(b) Predominantly	includes	securities	from	the	GSEs	and	Ginnie	Mae	that	are	generally	sold shortly	after	receipt.

(c) Excludes	the	value	of	MSRs	retained	upon	the	sale	of	loans.	Gains	on	loans	sales	include	the value	of	MSRs.

(d) 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,	2014	and	2013,	the	Firm	had recorded	on	its	Consolidated	balance	sheets	$12.4	billion	and	$14.3	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	$464	million	and	$2.0 billion	as	of	December	31,	2014	and	2013,	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,	2014	and	2013.

|  | Securitized	assets |  | 90	days	past	due |  | Liquidation	losses |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| As\tof\tor\tfor\tthe\tyear\tended\tDecember\t31,\t(in\tmillions) | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 |
| Securitized\tloans(a) |  |  |  |  |  |  |
| Residential\tmortgage: |  |  |  |  |  |  |
| Prime/\tAlt-A\t&amp;\tOption\tARMs | $78,294 | $90,381 | $11,363 | $14,882 | $2,166 | $4,688 |
| Subprime\tmortgage | 25,659 | 28,008 | 6,473 | 7,726 | 1,931 | 2,420 |
| Commercial\tand\tother | 94,438 | 98,018 | 1,522 | 2,350 | 1,267 | 1,003 |
| Total\tloans\tsecuritized(b) | $198,391 | $216,407 | $19,358 | $24,958 | $5,364 | $8,111 |

(a) Total	assets	held	in	securitization-related	SPEs	were	 $254.3	billion	and	$271.7	billion,	respectively,	at	December	31,	2014	and	2013.	The	$198.4	billion	and	$216.4	billion,	respectively,	of	loans securitized	at	December	31,	2014	and	2013,	excludes:	$52.2	billion	and	$50.8	billion,	respectively,	of	securitized	loans	in	which	the	Firm	has	no	continuing	involvement,	and	 $3.7	billion	and	$4.5 billion,	respectively,	of	loan	securitizations	consolidated	on	the	Firm's	Consolidated	balance	sheets	at	 December	31,	2014	and	2013.

(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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Consumer\t&amp;\tCommunity\tBanking | $30,941 | $30,985 | $31,048 |
| Corporate\t&amp;\tInvestment\tBank | 6,780 | 6,888 | 6,895 |
| Commercial\tBanking | 2,861 | 2,862 | 2,863 |
| Asset\tManagement | 6,964 | 6,969 | 6,992 |
| Corporate(a) | 101 | 377 | 377 |
| Total\tgoodwill | $47,647 | $48,081 | $48,175 |

(a) The	remaining	$101	million	of	Private	Equity	goodwill	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	following	table	presents	changes	in	the	carrying	amount	of	goodwill.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tperiod | $48,081 | $48,175 | $48,188 |
| Changes\tduring\tthe\tperiod\tfrom: |  |  |  |
| Business\tcombinations | 43 | 64 | 43 |
| Dispositions | (80) | (5) | (4) |
| Other(a) | (397) | (153) | (52) |
| Balance\tat\tDecember\t31, | $47,647 | $48,081 | $48,175 |

(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.

# Impairment	testing

During	2014,	the	Firm	recognized	impairments	of	the	Private	Equity	business' goodwill	totaling	$276	million.

The	Firm's	remaining	goodwill	was	not	impaired	at	December	31,	2014.	Further, the	Firm's	goodwill	was	not	impaired	at	December	31,	2013	nor	was	any goodwill	written	off	due	to	impairment	during	2013	or	2012.

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.

Deterioration	in	economic	market	conditions,	increased	estimates	of	the	effects	of regulatory	or	legislative	changes,	or	additional	regulatory	or	legislative	changes may	result	in	declines	in	projected	business	performance	beyond	management's current	expectations.	For	example,	in	the	Firm's	Mortgage	Banking	business, such	declines	could	result	from	increases	in	primary	mortgage	interest	rates, lower	mortgage	origination	volume,	higher	costs	to	resolve	foreclosure-related matters	or	from	deterioration	in	economic	conditions,	including	decreases	in home	prices	that	result	in	increased	credit	losses.	Declines	in	business performance,	increases	in	equity	capital	requirements,	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.

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	comprise 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,	2014,	2013	and	2012.

| As	of	or	for	the	year	ended	December	31,	(in	millions,	except	where	otherwise	noted) | 2014 |  | 2013 | 2012 |
| :--- | :--- | :--- | :--- | :--- |
| Fair\tvalue\tat\tbeginning\tof\tperiod | $9,614 |  | $7,614 | $7,223 |
| MSR\tactivity: |  |  |  |  |
| Originations\tof\tMSRs | 757 |  | 2,214 | 2,376 |
| Purchase\tof\tMSRs | 11 |  | 1 | 457 |
| Disposition\tof\tMSRs(a) | (209) |  | (725) | (579) |
| Net\tadditions | 559 |  | 1,490 | 2,254 |
| Changes\tdue\tto\tcollection/realization\tof\texpected\tcash\tflows (b) | (911) |  | (1,102) | (1,228) |
| Changes\tin\tvaluation\tdue\tto\tinputs\tand\tassumptions:\n(c)\nChanges\tdue\tto\tmarket\tinterest\trates\tand\tother | (1,608) |  | 2,122 | (589) |
| Changes\tin\tvaluation\tdue\tto\tother\tinputs\tand\tassumptions: |  |  |  |  |
| Projected\tcash\tflows\t(e.g.,\tcost\tto\tservice) (d) | 133 |  | 109 | (452) |
| Discount\trates | (459) | (h) | (78) | (98) |
| Prepayment\tmodel\tchanges\tand\tother(e) | 108 |  | (541) | 504 |
| Total\tchanges\tin\tvaluation\tdue\tto\tother\tinputs\tand\tassumptions | (218) |  | (510) | (46) |
| Total\tchanges\tin\tvaluation\tdue\tto\tinputs\tand\tassumptions(b) | $(1,826) |  | $1,612 | $(635) |
| Fair\tvalue\tat\tDecember\t31,(f) | $7,436 |  | $9,614 | $7,614 |
| Change\tin\tunrealized\tgains/(losses)\tincluded\tin\tincome\trelated\tto\tMSRs\nheld\tat\tDecember\t31, | $(1,826) |  | $1,612 | $(635) |
| Contractual\tservice\tfees,\tlate\tfees\tand\tother\tancillary\tfees\tincluded\tin\tincome | $2,884 |  | $3,309 | $3,783 |
| Third-party\tmortgage\tloans\tserviced\tat\tDecember\t31,\t(in\tbillions) | $756 |  | $822 | $867 |
| (g)\nServicer\tadvances,\tnet\tof\tan\tallowance\tfor\tuncollectible\tamounts,\tat\tDecember\t31,\t(in\tbillions) | $8.5 |  | $9.6 | $10.9 |

(a) Predominantly	represents	excess	mortgage	servicing	rights	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	in	2013	and	2012.

(c) 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.

(d) For	the	year	ended	December	31,	2013,	the	increase	was	driven	by	the	inclusion	in	the	MSR	valuation	model	of	servicing	fees	receivable	on	certain	delinquent	loans.

(e) Represents	changes	in	prepayments	other	than	those	attributable	to	changes	in	market	interest	rates.	For	the	year	ended	December	31,	2013,	the	decrease	was	driven	by	changes	in	the	inputs	and	assumptions	used	to derive	prepayment	speeds,	primarily	increases	in	home	prices.

(g) Represents	amounts	the	Firm	pays	as	the	servicer	(e.g.,	scheduled	principal	and	interest	to	a	trust,	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	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.

(h) For	the	year	ending	December	31,	2014,	the	decrease	was	primarily	related	to	higher	capital	allocated	to	the	Mortgage	Servicing	business,	which,	in	turn,	resulted	in	an	increase	in	the	option	adjusted	spread	("OAS"). The	resulting	OAS	assumption	continues	to	be	consistent	with	capital	and	return	requirements	that	the	Firm	believes	a	market	participant	would	consider,	taking	into	account	factors	such	as	the	current	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,	2014,	2013	and	2012.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| CCB\tmortgage\tfees\tand\trelated\tincome |  |  |  |
| Net\tproduction\trevenue: |  |  |  |
| Production\trevenue | $732 | $2,673 | $5,783 |
| Repurchase\t(losses)/benefits | 458 | 331 | (272) |
| Net\tproduction\trevenue | 1,190 | 3,004 | 5,511 |
| Net\tmortgage\tservicing\trevenue |  |  |  |
| Operating\trevenue: |  |  |  |
| Loan\tservicing\trevenue | 3,303 | 3,552 | 3,772 |
| Changes\tin\tMSR\tasset\tfair\tvalue\tdue\tto |  |  |  |
| collection/realization\tof\texpected\tcash |  |  |  |
| flows | (905) | (1,094) | (1,222) |
| Total\toperating\trevenue | 2,398 | 2,458 | 2,550 |
| Risk\tmanagement: |  |  |  |
| Changes\tin\tMSR\tasset\tfair\tvalue |  |  |  |
| \t\tdue\tto\tmarket\tinterest\trates\tand |  |  |  |
| \t\tother(a) | (1,606) | 2,119 | (587) |
| Other\tchanges\tin\tMSR\tasset\tfair\tvalue\tdue\tto\nother\tinputs\tand\tassumptions\tin\tmodel(b) | (218) | (511) | (46) |
| Change\tin\tderivative\tfair\tvalue\tand\tother | 1,796 | (1,875) | 1,252 |
| Total\trisk\tmanagement | (28) | (267) | 619 |
| Total\tCCB\tnet\tmortgage\tservicing\trevenue | 2,370 | 2,191 | 3,169 |
| All\tother | 3 | 10 | 7 |
| Mortgage\tfees\tand\trelated\tincome | $3,563 | $5,205 | $8,687 |

(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).	For	the	year	ended	December	31,	2013,	the	decrease	was	driven by	changes	in	the	inputs	and	assumptions	used	to	derive	prepayment	speeds,	primarily increases	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,	2014	and	2013,	and	outlines	the sensitivities	of	those	fair	values	to	immediate	adverse	changes	in	those assumptions,	as	defined	below.

| ("CPR") | 9.80% | 8.07% |
| :--- | :--- | :--- |
| Impact\ton\tfair\tvalue\tof\t10%\tadverse\tchange | $(337) | $(362) |
| Impact\ton\tfair\tvalue\tof\t20%\tadverse\tchange | (652) | (705) |
| Weighted-average\toption\tadjusted\tspread | 9.43% | 7.77% |
| Impact\ton\tfair\tvalue\tof\t100\tbasis\tpoints\tadverse\nchange | $(300) | $(389) |
| Impact\ton\tfair\tvalue\tof\t200\tbasis\tpoints\tadverse\nchange | (578) | (750) |

# 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.

# Other	intangible	assets

Other	intangible	assets	are	recorded	at	their	fair	value	upon	completion	of	a business	combination	or	certain	other	transactions,	and	generally	represent	the value	of	customer	relationships	or	arrangements.	Subsequently,	the	Firm's intangible	assets	with	finite	lives,	including	core	deposit	intangibles,	purchased credit	card	relationships,	and	other	intangible	assets,	are	amortized	over	their useful	lives	in	a	manner	that	best	reflects	the	economic	benefits	of	the	intangible asset.	The	$426	million	decrease	in	other	intangible	assets	during	2014	was predominantly	due	to	$380	million	in	amortization.

The	components	of	credit	card	relationships,	core	deposits	and	other	intangible	assets	were	as	follows.

|  |  | 2014 |  |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t(in\tmillions) | Gross\tamount(a) | Accumulated\namortization(a) | Net\ncarrying\tvalue | Gross\tamount | Accumulated\namortization | Net\ncarrying\tvalue |
| Purchased\tcredit\tcard\trelationships | $200 | $166 | $34 | $3,540 | $3,409 | $131 |
| Other\tcredit\tcard-related\tintangibles | 497 | 378 | $119 | 542 | 369 | $173 |
| Core\tdeposit\tintangibles | 814 | 757 | $57 | 4,133 | 3,974 | $159 |
| Other\tintangibles(b) | 1,880 | 898 | $982 | 2,374 | 1,219 | $1,155 |
| Total\tother\tintangible\tassets | $3,391 | $2,199 | $1,192 | $10,589 | $8,971 | $1,618 |

(a) The	decrease	in	the	gross	amount	and	accumulated	amortization	from	 December	31,	2013,	was	due	to	the	removal	of	fully	amortized	assets,	predominantly	related	to	intangible	assets	acquired	in the	2004	merger	with	Bank	One	Corporation	("Bank	One").

(b) Includes	intangible	assets	of	approximately	$600	million	consisting	primarily	of	asset	management	advisory	contracts,	which	were	determined	to	have	an	indefinite	life	and	are	not	amortized.

# Amortization	expense

The	following	table	presents	amortization	expense	related	to	credit	card	relationships,	core	deposits	and	other	intangible	assets.

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Purchased\tcredit\tcard\trelationships | $97 | $195 | $309 |
| Other\tcredit\tcard-related\tintangibles | 51 | 58 | 265 |
| Core\tdeposit\tintangibles | 102 | 196 | 239 |
| Other\tintangibles | 130 | 188 | 144 |
| Total\tamortization\texpense(a) | $380 | $637 | $957 |

(a) The	decline	in	amortization	expense	during	2014	predominantly	related	to	intangible	assets	acquired	in	the	2004	merger	with	Bank	One,	most	of	which	became	fully	amortized	during	the	second quarter	of	2014.

# Future	amortization	expense

The	following	table	presents	estimated	future	amortization	expense	related	to	credit	card	relationships,	core	deposits	and	other	intangible	assets	at	December	31,	2014.

| Year	ended	December	31,	(in	millions) | Purchased	credit	card<br>relationships | Other	credit<br>card-related	intangibles | Core	deposit	intangibles | Other<br>intangibles | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| 2015 | $13 | $38 | $26 | $89 | $166 |
| 2016 | 6 | 33 | 14 | 73 | 126 |
| 2017 | 5 | 28 | 7 | 70 | 110 |
| 2018 | 3 | 20 | 5 | 50 | 78 |
| 2019 | 2 | — | 3 | 37 | 42 |

The	Firm's	intangible	assets	are	tested	for	impairment	annually	or	more	often	if events	or	changes	in	circumstances	indicate	that	the	asset	might	be	impaired.

The	impairment	test	for	a	finite-lived	intangible	asset	compares	the	undiscounted cash	flows	associated	with	the	use	or	disposition	of	the	intangible	asset	to	its carrying	value.	If	the	sum	of	the	undiscounted	cash	flows	exceeds	its	carrying value,	then	no	impairment	charge	is	recorded.	If	the	sum	of	the	undiscounted	cash flows	is	less	than	its	carrying	value,	then	an	impairment	charge	is	recognized	in amortization	expense	to	the	extent	the	carrying	amount	of	the	asset	exceeds	its fair	value.

The	impairment	test	for	indefinite-lived	intangible	assets	compares	the	fair	value of	the	intangible	asset	to	its	carrying	amount.	If	the	carrying	value	exceeds	the fair	value,	then	an	impairment	charge	is	recognized	in	amortization	expense	for the	difference.

# 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,	2014	and	2013,	noninterest-bearing	and	interest-bearing deposits	were	as	follows.

| December	31,	(in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| U.S.\toffices |  |  |
| Noninterest-bearing | $437,558 | $389,863 |
| Interest-bearing |  |  |
| Demand(a) | 90,319 | 84,631 |
| Savings(b) | 466,730 | 450,405 |
| Time\t(included\t$7,501\tand\t$5,995\tat\tfair\nvalue)(c) | 86,301 | 91,356 |
| Total\tinterest-bearing\tdeposits | 643,350 | 626,392 |
| Total\tdeposits\tin\tU.S.\toffices | 1,080,908 | 1,016,255 |
| Non-U.S.\toffices |  |  |
| Noninterest-bearing | 19,078 | 17,611 |
| Interest-bearing |  |  |
| Demand | 217,011 | 214,391 |
| Savings | 2,673 | 1,083 |
| Time\t(included\t$1,306\tand\t$629\tat\tfair\tvalue)(c) | 43,757 | 38,425 |
| Total\tinterest-bearing\tdeposits | 263,441 | 253,899 |
| Total\tdeposits\tin\tnon-U.S.\toffices | 282,519 | 271,510 |
| Total\tdeposits | $1,363,427 | $1,287,765 |

(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) | 2014 | 2013 |
| :--- | :--- | :--- |
| U.S.\toffices | $71,630 | $74,804 |
| Non-U.S.\toffices | 43,743 | 38,412 |
| Total | $115,373 | $113,216 |

At	December	31,	2014,	the	maturities	of	interest-bearing	time	deposits	were	as follows.

| (in	millions) | U.S. | Non-U.S. | Total |
| :--- | :--- | :--- | :--- |
| 2015 | $70,929 | $43,031 | $113,960 |
| 2016 | 6,511 | 424 | 6,935 |
| 2017 | 1,480 | 61 | 1,541 |
| 2018 | 1,750 | 75 | 1,825 |
| 2019 | 1,423 | 166 | 1,589 |
| After\t5\tyears | 4,208 | — | 4,208 |
| Total | $86,301 | $43,757 | $130,058 |

# 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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Brokerage\tpayables(a) | $134,467 | $116,391 |
| Accounts\tpayable\tand\tother\tliabilities (b) | 72,487 | 78,100 |
| Total | $206,954 | $194,491 |

(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	original	issue	discount,	valuation	adjustments	and	fair	value	adjustments,	where	applicable)	by	remaining	contractual	maturity	as	of	December	31,	2014.

| (in	millions,	except	rates) |  | Under	1	year | 1-5	years | After	5	years | Total |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Parent\tcompany |  |  |  |  |  |  |  |
| Senior\tdebt: | Fixed\trate | $13,214 | $46,275 | $49,300 | $108,789 |  | $101,074 |
|  | Variable\trate | 7,196 | 28,482 | 6,572 | 42,250 |  | 41,030 |
|  | Interest\trates(a) | 0.33-6.75% | 0.27-7.25% | 0.18-6.40% | 0.18-7.25% |  | 0.19-7.25% |
| Subordinated\tdebt: | Fixed\trate | $2,581 | $2,373 | $11,763 | $16,717 |  | $15,198 |
|  | Variable\trate | 1,446 | 2,000 | 9 | 3,455 |  | 4,566 |
|  | Interest\trates(a) | 0.48-5.25% | 1.06-8.53% | 3.38-8.00% | 0.48-8.53% |  | 0.63-8.53% |
|  | Subtotal | $24,437 | $79,130 | $67,644 | $171,211 |  | $161,868 |
| Subsidiaries |  |  |  |  |  |  |  |
| Federal\tHome\tLoan\tBanks\t("FHLB")\tadvances: | Fixed\trate | $2,006 | $32 | $166 | $2,204 |  | $3,236 |
|  | Variable\trate | 7,800 | 53,490 | 1,500 | 62,790 |  | 58,640 |
|  | Interest\trates(a) | 0.27-2.04% | 0.11-0.43% | 0.39% | 0.11-2.04% |  | 0.16-2.04% |
| Senior\tdebt: | Fixed\trate | $334 | $1,493 | $3,924 | $5,751 |  | $5,428 |
|  | Variable\trate | 3,805 | 13,692 | 2,587 | 20,084 |  | 23,458 |
|  | Interest\trates(a) | 0.36-0.48% | 0.26-8.00% | 1.30-7.28% | 0.26-8.00% |  | 0.12-8.00% |
| Subordinated\tdebt: | Fixed\trate | $— | $5,289 | $1,647 | $6,936 |  | $7,286 |
|  | Variable\trate | — | 2,364 | — | 2,364 |  | 2,528 |
|  | Interest\trates(a) | —% | 0.57-6.00% | 4.38-8.25% | 0.57-8.25% |  | 0.57-8.25% |
|  | Subtotal | $13,945 | $76,360 | $9,824 | $100,129 |  | $100,576 |
| Junior\tsubordinated\tdebt: | Fixed\trate | $— | $— | $2,226 | $2,226 |  | $2,176 |
|  | Variable\trate | — | — | 3,270 | 3,270 |  | 3,269 |
|  | Interest\trates(a) | —% | —% | 0.73-8.75% | 0.73-8.75% |  | 0.74-8.75% |
|  | Subtotal | $— | $— | $5,496 | $5,496 |  | $5,445 |
| Total\tlong-term\tdebt(b)(c)(d)\nLong-term\tbeneficial\tinterests: |  | $38,382 | $155,490 | $82,964 | $276,836 | (f)(g) | $267,889 |
|  | Fixed\trate | $4,650 | $7,924 | $1,398 | $13,972 |  | $10,958 |
|  | Variable\trate | 6,230 | 11,079 | 4,128 | 21,437 |  | 20,872 |
|  | Interest\trates | 0.18-1.36% | 0.20-5.23% | 0.05-15.93% | 0.05-15.93% |  | 0.04-15.93% |
| Total\tlong-term\tbeneficial\tinterests(e) |  | $10,880 | $19,003 | $5,526 | $35,409 |  | $31,830 |

(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,	2014,	for	total	long-term	debt	was	 (0.10)%	to	8.55%,	versus	the	contractual	range	of	 0.11%	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	$69.2	billion	and	$68.4	billion	secured	by	assets	totaling	 $156.7	billion	and	$131.3	billion	at	December	31,	2014	and	2013,	respectively.	The	amount	of	long-term	debt	secured	by	assets does	not	include	amounts	related	to	hybrid	instruments.

(d) Included	$2.9	billion	and	$2.7	billion	of	outstanding	zero-coupon	notes	at	 December	31,	2014	and	2013,	respectively.	The	aggregate	principal	amount	of	these	notes	at	their	respective	maturities	is $7.5	billion	and $4.5	billion,	respectively.

(e) Included	on	the	Consolidated	balance	sheets	in	beneficial	interests	issued	by	consolidated	VIEs.	Also	included	 $2.2	billion	and	$2.0	billion	of	outstanding	structured	notes	accounted	for	at	fair	value	at December	31, 2014	and	2013,	respectively.	Excluded	short-term	commercial	paper	and	other	short-term	beneficial	interests	of	 $17.0	billion	and	$17.8	billion	at	December	31,	2014	and	2013,	respectively.

(f) At	December	31,	2014,	long-term	debt	in	the	aggregate	of	 $23.5	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	notes.

The	weighted-average	contractual	interest	rates	for	total	long-term	debt	excluding structured	notes	accounted	for	at	fair	value	were	2.43%	and	2.56%	as	of December	31,	2014	and	2013,	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	1.50%	and	1.54%	as	of	December	31,	2014 and	2013,	respectively.

The	Parent	Company	has	guaranteed	certain	long-term	debt	of	its	subsidiaries, including	both	long-term	debt	and	structured	notes	sold	as	part	of	the	Firm's market-making	activities.	These	guarantees	rank	on	parity	with	all	of	the	Firm's other	unsecured	and	unsubordinated	indebtedness.	Guaranteed	liabilities	were $352	million	and	$478	million	at	December	31,	2014	and	2013,	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

On	May	8,	2013,	the	Firm	redeemed	approximately	$5.0	billion,	or	100%	of	the liquidation	amount,	of	the	following	eight	series	of	guaranteed	capital	debt securities	("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.	On	July	12,	2012,	the	Firm	redeemed $9.0	billion,	or	100%	of	the	liquidation	amount,	of	the	following	nine	series	of trust	preferred	securities:	JPMorgan	Chase	Capital	XV,	XVII,	XVIII,	XX,	XXII, XXV,	XXVI,	XXVII	and	XXVIII.	Other	income	for	the	year	ended	December 31,	2012,	reflected	$888	million	of	pretax	extinguishment	gains	related	to adjustments	applied	to	the	cost	basis	of	the	redeemed	trust	preferred	securities during	the	period	they	were	in	a	qualified	hedge	accounting	relationship.

At	December	31,	2014,	the	Firm	had	outstanding	nine	wholly	owned	Delaware statutory	business	trusts	("issuer	trusts")	that	had	issued	guaranteed	capital	debt securities.

The	junior	subordinated	deferrable	interest	debentures	issued	by	the	Firm	to	the issuer	trusts,	totaling	$5.5	billion	and	$5.4	billion	at	December	31,	2014	and 2013,	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"	(i.e.,	trust	preferred	securities).	The	Firm	also	records	the common	capital	securities	issued	by	the	issuer	trusts	in	other	assets	in	its Consolidated	balance	sheets	at	December	31,	2014	and	2013.	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,	2014,	$2.7	billion	of	these	debentures qualified	as	Tier	1	capital,	while	$2.7	billion	qualified	as	Tier	2	capital.	As	of December	31,	2013,	under	Basel	I,	the	entire	balance	of	these	debentures qualified	as	Tier	1	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,	2014.

| December	31,	2014<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 | $726 | 2000 | 2030 | Any\ttime | 8.75% | Semiannually |
| Chase\tCapital\tII | 482 | 498 | 1997 | 2027 | Any\ttime | LIBOR\t+\t0.50% | Quarterly |
| Chase\tCapital\tIII | 296 | 305 | 1997 | 2027 | Any\ttime | LIBOR\t+\t0.55% | Quarterly |
| Chase\tCapital\tVI | 242 | 249 | 1998 | 2028 | Any\ttime | LIBOR\t+\t0.625% | Quarterly |
| First\tChicago\tNBD\tCapital\tI | 249 | 257 | 1997 | 2027 | Any\ttime | LIBOR\t+\t0.55% | Quarterly |
| JPMorgan\tChase\tCapital\tXIII | 466 | 480 | 2004 | 2034 | Any\ttime | LIBOR\t+\t0.95% | Quarterly |
| JPMorgan\tChase\tCapital\tXXI | 836 | 838 | 2007 | 2037 | Any\ttime | LIBOR\t+\t0.95% | Quarterly |
| JPMorgan\tChase\tCapital\tXXIII | 643 | 643 | 2007 | 2047 | Any\ttime | LIBOR\t+\t1.00% | Quarterly |
| JPMorgan\tChase\tCapital\tXXIX | 1,500 | 1,500 | 2010 | 2040 | 2015 | 6.70% | Quarterly |
| Total | $5,188 | $5,496 |  |  |  |  |  |

(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.

# Note	22	–	Preferred	stock

At	December	31,	2014	and	2013,	JPMorgan	Chase	was	authorized	to	issue	200 million	shares	of	preferred	stock,	in	one	or	more	series,	with	a	par	value	of	$1.00 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,	2014	and	2013.

(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 Federal	Reserve.

# Issuance	of	preferred	stock

On	February	12,	2015,	the	Firm	issued	$1.4	billion	of	noncumulative	preferred stock.

# Note	23	–	Common	stock

At	December	31,	2014	and	2013,	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,	2014,	2013	and	2012	were	as follows.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| 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 | (348.8) | (300.9) | (332.2) |
| Purchase\tof\ttreasury\tstock | (82.3) | (96.1) | (33.5) |
| Share\trepurchases\trelated\tto\temployee\nstock-based\tawards(a) | — | — | (0.2) |
| Issued\tfrom\ttreasury: |  |  |  |
| Employee\tbenefits\tand\tcompensation\nplans | 39.8 | 47.1 | 63.7 |
| Employee\tstock\tpurchase\tplans | 1.2 | 1.1 | 1.3 |
| Total\tissued\tfrom\ttreasury | 41.0 | 48.2 | 65.0 |
| Total\ttreasury\t–\tbalance\tat\tDecember\t31 | (390.1) | (348.8) | (300.9) |
| Outstanding | 3,714.8 | 3,756.1 | 3,804.0 |

(a) Participants	in	the	Firm's	stock-based	incentive	plans	may	have	shares	withheld	to	cover income	taxes.

At	each	of	December	31,	2014,	2013,	and	2012,	respectively,	the	Firm	had	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	regular	quarterly	cash	dividends exceed	$0.38	per	share.	As	a	result	of	the	increase	in	the	Firm's	quarterly common	stock	dividend	to	$0.40	per	share	commencing	with	the	second	quarter of	2014,	the	exercise	price	of	the	Warrants	was	adjusted	each	subsequent	quarter, and	was	$42.391	as	of	December	31,	2014.	There	has	been	no	change	in	the number	of	shares	issuable	upon	exercise.

On	March	13,	2012,	the	Board	of	Directors	authorized	a	$15.0	billion	common equity	(i.e.,	common	stock	and	warrants)	repurchase	program.	As	of December	31,	2014,	$3.8	billion	(on	a	trade-date	basis)	of	authorized	repurchase capacity	remained	under	the	program.	The	amount	of	equity	that	may	be repurchased	by	the	Firm	is	also	subject	to	the	amount	that	is	set	forth	in	the Firm's	annual	capital	plan	that	is	submitted	to	the	Federal	Reserve	as	part	of	the Comprehensive	Capital	Analysis	and	Review	("CCAR")	process.

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	pages	18–19.

As	of	December	31,	2014,	approximately	240	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,	2014,	2013	and	2012.

| except	per	share	amounts) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Basic\tearnings\tper\tshare |  |  |  |
| Net\tincome | $21,762 | $17,923 | $21,284 |
| Less:\tPreferred\tstock\tdividends | 1,125 | 805 | 653 |
| Net\tincome\tapplicable\tto\tcommon\tequity | 20,637 | 17,118 | 20,631 |
| Less:\tDividends\tand\tundistributed\tearnings\nallocated\tto\tparticipating\tsecurities | 544 | 525 | 754 |
| Net\tincome\tapplicable\tto\tcommon\nstockholders | $20,093 | $16,593 | $19,877 |
| Total\tweighted-average\tbasic\tshares\noutstanding | 3,763.5 | 3,782.4 | 3,809.4 |
| Net\tincome\tper\tshare | $5.34 | $4.39 | $5.22 |
| Diluted\tearnings\tper\tshare |  |  |  |
| Net\tincome\tapplicable\tto\tcommon\nstockholders | $20,093 | $16,593 | $19,877 |
| Total\tweighted-average\tbasic\tshares\noutstanding | 3,763.5 | 3,782.4 | 3,809.4 |
| Add:\tEmployee\tstock\toptions,\tSARs\tand\nwarrants(a) | 34.0 | 32.5 | 12.8 |
| Total\tweighted-average\tdiluted\tshares\noutstanding(b) | 3,797.5 | 3,814.9 | 3,822.2 |
| Net\tincome\tper\tshare | $5.29 | $4.35 | $5.20 |

(a) Excluded	from	the	computation	of	diluted	EPS	(due	to	the	antidilutive	effect)	were	certain	options	issued	under employee	benefit	plans	and	the	Warrants.	The	aggregate	number	of	shares	issuable	upon	the	exercise	of	such options	and	Warrants	was	1	million,	6	million	and	148	million	for	the	years	ended	December	31,	2014,	2013	and 2012,	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,\t2011 | (b)\n$3,565 | $(26) | $51 | $(2,646) | $944 |
| Net\tchange | 3,303 | (69) | 69 | (145) | 3,158 |
| Balance\tat\tDecember\t31,\t2012 | (b)\n$6,868 | $(95) | $120 | $(2,791) | $4,102 |
| Net\tchange | (4,070) | (41) | (259) | 1,467 | (2,903) |
| Balance\tat\tDecember\t31,\t2013 | (b)\n$2,798 | $(136) | $(139) | $(1,324) | $1,199 |
| Net\tchange | 1,975 | (11) | 44 | (1,018) | 990 |
| Balance\tat\tDecember\t31,\t2014 | (b)\n$4,773 | $(147) | $(95) | $(2,342) | $2,189 |

(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	the	first	quarter	of	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.

(b) At	December	31,	2011,	included	after-tax	non-credit	related	unrealized	losses	of	 $56	million	on	debt	securities	for	which	credit	losses	have	been	recognized	in	income.	There	were	 no	such	losses for	the	other	periods	presented.

The	following	table	presents	the	before-	and	after-tax	changes	in	the	components	of	other	comprehensive	income/(loss).

|  |  | 2014 |  |  | 2013 |  |  | 2012 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 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 | $3,193 | $(1,170) | $2,023 | $(5,987) | $2,323 | $(3,664) | $7,521 | $(2,930) | $4,591 |
| Reclassification\tadjustment\tfor\trealized\t(gains)/losses\tincluded\tin\nnet\tincome(a) | (77) | 29 | (48) | (667) | 261 | (406) | (2,110) | 822 | (1,288) |
| Net\tchange | 3,116 | (1,141) | 1,975 | (6,654) | 2,584 | (4,070) | 5,411 | (2,108) | 3,303 |
| Translation\tadjustments: |  |  |  |  |  |  |  |  |  |
| Translation(b) | (1,638) | 588 | (1,050) | (807) | 295 | (512) | (26) | 8 | (18) |
| Hedges(b) | 1,698 | (659) | 1,039 | 773 | (302) | 471 | (82) | 31 | (51) |
| Net\tchange | 60 | (71) | (11) | (34) | (7) | (41) | (108) | 39 | (69) |
| Cash\tflow\thedges: |  |  |  |  |  |  |  |  |  |
| Net\tunrealized\tgains/(losses)\tarising\tduring\tthe\tperiod | 98 | (39) | 59 | (525) | 206 | (319) | 141 | (55) | 86 |
| Reclassification\tadjustment\tfor\trealized\t(gains)/losses\tincluded\tin\nnet\tincome(c) | (24) | 9 | (15) | 101 | (41) | 60 | (28) | 11 | (17) |
| Net\tchange | 74 | (30) | 44 | (424) | 165 | (259) | 113 | (44) | 69 |
| Defined\tbenefit\tpension\tand\tOPEB\tplans: |  |  |  |  |  |  |  |  |  |
| Prior\tservice\tcredits\tarising\tduring\tthe\tperiod | (53) | 21 | (32) | — | — | — | 6 | (2) | 4 |
| Net\tgains/(losses)\tarising\tduring\tthe\tperiod | (1,697) | 688 | (1,009) | 2,055 | (750) | 1,305 | (537) | 228 | (309) |
| Reclassification\tadjustments\tincluded\tin\nnet\tincome(d): |  |  |  |  |  |  |  |  |  |
| Amortization\tof\tnet\tloss | 72 | (29) | 43 | 321 | (124) | 197 | 324 | (126) | 198 |
| Prior\tservice\tcosts/(credits) | (44) | 17 | (27) | (43) | 17 | (26) | (41) | 16 | (25) |
| Foreign\texchange\tand\tother | 39 | (32) | 7 | (14) | 5 | (9) | (21) | 8 | (13) |
| Net\tchange | (1,683) | 665 | (1,018) | 2,319 | (852) | 1,467 | (269) | 124 | (145) |
| Total\tother\tcomprehensive\tincome/(loss) | $1,567 | $(577) | $990 | $(4,793) | $1,890 | $(2,903) | $5,147 | $(1,989) | $3,158 |

(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	amount	is	reported	in	the	same	line	as	the	hedged	items,	which	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.

# 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.

A	reconciliation	of	the	applicable	statutory	U.S.	income	tax	rate	to	the	effective tax	rate	for	each	of	the	years	ended	December	31,	2014,	2013	and	2012,	is presented	in	the	following	table.

# Effective	tax	rate

| Year	ended	December	31, | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| 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 | 2.7 | 2.2 | 1.6 |
| Tax-exempt\tincome | (3.1) | (3.1) | (2.9) |
| Non-U.S.\tsubsidiary\tearnings(a) | (2.0) | (4.9) | (2.4) |
| Business\ttax\tcredits | (5.4) | (5.4) | (4.2) |
| Nondeductible\tlegal\texpense | 2.4 | 8.0 | (0.2) |
| Other,\tnet | (2.6) | (1.0) | (0.5) |
| Effective\ttax\trate | 27.0\t% | 30.8\t% | 26.4\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, 2014,	2013,	and	2012.

# Income	tax	expense/(benefit)

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Current\tincome\ttax\texpense/(benefit) |  |  |  |
| U.S.\tfederal | $1,610 | $(1,316) | $3,225 |
| Non-U.S. | 1,353 | 1,308 | 1,782 |
| U.S.\tstate\tand\tlocal | 857 | (4) | 1,496 |
| Total\tcurrent\tincome\ttax\texpense/(benefit) | 3,820 | (12) | 6,503 |
| Deferred\tincome\ttax\texpense/(benefit) |  |  |  |
| U.S.\tfederal | 3,738 | 7,080 | 2,238 |
| Non-U.S. | 71 | 10 | (327) |
| U.S.\tstate\tand\tlocal | 401 | 913 | (781) |
| Total\tdeferred\tincome\ttax\texpense/(benefit) | 4,210 | 8,003 | 1,130 |
| Total\tincome\ttax\texpense | $8,030 | $7,991 | $7,633 |

Total	income	tax	expense	includes	$451	million,	$531	million	and	$200	million of	tax	benefits	recorded	in	2014,	2013,	and	2012,	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.

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	decrease of	$140	million	in	2014,	an	increase	of	$2.1	billion	in	2013,	and	a	decrease	of $1.9	billion	in	2012.

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	2014,	pretax	earnings	of	$2.6	billion	were	generated and	will	be	indefinitely	reinvested	in	these	subsidiaries.	At	December	31,	2014, the	cumulative	amount	of	undistributed	pretax	earnings	in	these	subsidiaries	were $31.1	billion.	If	the	Firm	were	to	record	a	deferred	tax	liability	associated	with these	undistributed	earnings,	the	amount	would	be	$7.0	billion	at	December	31, 2014.

These	undistributed	earnings	are	related	to	subsidiaries	located	predominantly	in the	U.K.	where	the	2014	statutory	tax	rate	was	21.5%.

Tax	expense	applicable	to	securities	gains	and	losses	for	the	years	2014,	2013	and 2012	was	$30	million,	$261	million,	and	$822	million,	respectively.

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,	2014	and	2013.

# Deferred	taxes

| December	31,	(in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Deferred\ttax\tassets |  |  |
| Allowance\tfor\tloan\tlosses | $5,756 | $6,593 |
| Employee\tbenefits | 3,378 | 4,468 |
| Accrued\texpenses\tand\tother | 8,637 | 9,179 |
| Non-U.S.\toperations | 5,106 | 5,493 |
| Tax\tattribute\tcarryforwards | 570 | 748 |
| Gross\tdeferred\ttax\tassets | 23,447 | 26,481 |
| Valuation\tallowance | (820) | (724) |
| Deferred\ttax\tassets,\tnet\tof\tvaluation\nallowance | $22,627 | $25,757 |
| Deferred\ttax\tliabilities |  |  |
| Depreciation\tand\tamortization | $3,073 | $3,196 |
| Mortgage\tservicing\trights,\tnet\tof\thedges | 5,533 | 5,882 |
| Leasing\ttransactions | 2,495 | 2,352 |
| Non-U.S.\toperations | 4,444 | 4,705 |
| Other,\tnet | 4,891 | 3,459 |
| Gross\tdeferred\ttax\tliabilities | 20,436 | 19,594 |
| Net\tdeferred\ttax\tassets | $2,191 | $6,163 |

JPMorgan	Chase	has	recorded	deferred	tax	assets	of	$570	million	at December	31,	2014,	in	connection	with	U.S.	federal	net	operating	loss	("NOL") carryforwards.	At	December	31,	2014,	total	U.S.	federal	NOL	carryforwards	were approximately	$1.6	billion.	If	not	utilized,	the	U.S.	federal	NOL	carryforwards will	expire	between	2025	and	2034.

The	valuation	allowance	at	December	31,	2014,	was	due	to	losses	associated	with non-U.S.	subsidiaries.

At	December	31,	2014,	2013	and	2012,	JPMorgan	Chase's	unrecognized	tax benefits,	excluding	related	interest	expense	and	penalties,	were	$4.9	billion,	$5.5 billion	and	$7.2	billion,	respectively,	of	which	$3.5	billion,	$3.7	billion	and	$4.2 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,	New	York	State	and	City,	and	the	State	of	California	as	summarized	in the	Tax	examination	status	table	below.	Based	upon	the	status	of	all	of	the	tax examinations	currently	in	process,	it	is	reasonably	possible	that	over	the	next	12 months	the	resolution	of	these	examinations	could	result	in	a	reduction	in	the gross	balance	of	unrecognized	tax	benefits	in	the	range	of	$0	to	approximately	$2 billion.	Upon	settlement	of	an	audit,	the	gross	unrecognized	tax	benefits	would decline	either	because	of	tax	payments	or	the	recognition	of	tax	benefits.

The	following	table	presents	a	reconciliation	of	the	beginning	and	ending	amount of	unrecognized	tax	benefits	for	the	years	ended	December	31,	2014,	2013	and 2012.

# Unrecognized	tax	benefits

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Balance\tat\tJanuary\t1, | $5,535 | $7,158 | $7,189 |
| Increases\tbased\ton\ttax\tpositions\trelated\tto\tthe\ncurrent\tperiod | 810 | 542 | 680 |
| Increases\tbased\ton\ttax\tpositions\trelated\tto\nprior\tperiods | 477 | 88 | 234 |
| Decreases\tbased\ton\ttax\tpositions\trelated\tto\nprior\tperiods | (1,902) | (2,200) | (853) |
| Decreases\trelated\tto\tsettlements\twith\ttaxing\nauthorities | (9) | (53) | (50) |
| Decreases\trelated\tto\ta\tlapse\tof\tapplicable\nstatute\tof\tlimitations | — | — | (42) |
| Balance\tat\tDecember\t31, | $4,911 | $5,535 | $7,158 |

After-tax	interest	expense/(benefit)	and	penalties	related	to	income	tax	liabilities recognized	in	income	tax	expense	were	$17	million,	$(184)	million	and	$147 million	in	2014,	2013	and	2012,	respectively.

At	both	December	31,	2014	and	2013,	in	addition	to	the	liability	for	unrecognized tax	benefits,	the	Firm	had	accrued	$1.2	billion	for	income	tax-related	interest	and penalties.

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,	2014.

# Tax	examination	status

JPMorgan	Chase	–	U.K. 2006	–	2012 Field	examination	of	certain select	entities

The	following	table	presents	the	U.S.	and	non-U.S.	components	of	income	before income	tax	expense	for	the	years	ended	December	31,	2014,	2013	and	2012.

# Income	before	income	tax	expense	-	U.S.	and	non-U.S.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| U.S. | $22,515 | $17,229 | $24,895 |
| Non-U.S.(a) | 7,277 | 8,685 | 4,022 |
| Income\tbefore\tincome\ttax\texpense | $29,792 | $25,914 | $28,917 |

(a) For	purposes	of	this	table,	non-U.S.	income	is	defined	as	income	generated	from	operations located	outside	the	U.S.

# 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	OCC.	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	amount	of	reserve	balances	deposited by	the	Firm's	bank	subsidiaries	with	various	Federal	Reserve	Banks	was approximately	$10.6	billion	and	$5.3	billion	in	2014	and	2013,	respectively.

Restrictions	imposed	by	U.S.	federal	law	prohibit	JPMorgan	Chase	and	certain	of its	affiliates	from	borrowing	from	banking	subsidiaries	unless	the	loans	are secured	in	specified	amounts.	Such	secured	loans	to	the	Firm	or	to	other	affiliates are	generally	limited	to	10%	of	the	banking	subsidiary's	total	capital,	as determined	by	the	risk-based	capital	guidelines;	the	aggregate	amount	of	all	such loans	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,	2015,	JPMorgan	Chase's	banking	subsidiaries	could	pay,	in	the aggregate,	approximately	$31	billion	in	dividends	to	their	respective	bank holding	companies	without	the	prior	approval	of	their	relevant	banking regulators.	The	capacity	to	pay	dividends	in	2015	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,	2014	and	2013,	cash	in	the	amount	of	$16.8	billion and	$17.2	billion,	respectively,	and	securities	with	a	fair	value	of	$10.1	billion	and $1.5	billion,	respectively,	were	segregated	in	special	bank	accounts	for	the	benefit of	securities	and	futures	brokerage	customers.	In	addition,	as	of	December	31, 2014	and	2013,	the	Firm	had	other	restricted	cash	of	$3.3	billion	and	$3.9	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	rules	under	the	transitional	Standardized	and	Advanced	Approaches ("Basel	III	Standardized	Transitional"	and	"Basel	III	Advanced	Transitional," respectively)	became	effective	on	January	1,	2014;	December	31,	2013	data	is based	on	Basel	I	rules.	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	mostly	consistent	across	Basel	III	Standardized	and	Basel III	Advanced,	both	of	which	incorporate	the	requirements	set	forth	in	Basel	2.5. For	2014,	Basel	III	Standardized	Transitional	requires	the	Firm	to	calculate	its capital	ratios	using	the	Basel	III	definition	of	capital	divided	by	the	Basel	I definition	of	RWA,	inclusive	of	Basel	2.5	for	market	risk.

Beginning	in	2014,	there	are	three	categories	of	risk-based	capital	under	the	Basel III	Transitional	rules:	Common	Equity	Tier	1	capital	("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	is	predominantly comprised	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.

On	February	21,	2014,	the	Federal	Reserve	and	the	OCC	informed	the	Firm	and its	national	bank	subsidiaries	that	they	had	satisfactorily	completed	the	parallel run	requirements	and	were	approved	to	calculate	capital	under	Basel	III Advanced,	in	addition	to	Basel	III	Standardized,	as	of	April	1,	2014.	In conjunction	with	its	exit	from	the	parallel	run,	the	capital	adequacy	of	the	Firm and	its	national	bank	subsidiaries	is	evaluated	against	the	Basel	III	approach (Standardized	or	Advanced)	which	results,	for	each	quarter	beginning	with	the second	quarter	of	2014,	in	the	lower	ratio	(the	"Collins	Floor"),	as	required	by	the Collins	Amendment	of	the	Dodd-Frank	Act.

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,	2014,	and	under	Basel	I	at	December	31,	2013.

|  | Basel	III<br>Standardized<br>Transitional | Basel	III	Advanced<br>Transitional | Basel	I |
| :--- | :--- | :--- | :--- |
| (in\tmillions,\nexcept\tratios) | Dec\t31,\n2014 | Dec\t31,\n2014 | Dec\t31,\n2013 |
| Regulatory\tcapital |  |  |  |
| CET1\tcapital | $164,764 | $164,764 | NA |
| Tier\t1\tcapital(a) | 186,632 | 186,632 | $165,663 |
| Total\tcapital | 221,563 | 211,022 | 199,286 |
| Assets |  |  |  |
| Risk-weighted | 1,472,602 | 1,608,240 | 1,387,863 |
| Adjusted\taverage(b) | 2,465,414 | 2,465,414 | 2,343,713 |
| Capital\tratios(c) |  |  |  |
| CET1 | 11.2% | 10.2% | NA |
| Tier\t1(a) | 12.7 | 11.6 | 11.9% |
| Total | 15.0 | 13.1 | 14.4 |
| Tier\t1\tleverage | 7.6 | 7.6 | 7.1 |

# Chase	Bank	USA,	N.A.(d)

|  | Basel	III<br>Standardized<br>Transitional | Basel	III	Advanced<br>Transitional | Basel	I |
| :--- | :--- | :--- | :--- |
| (in\tmillions,\nexcept\tratios) | Dec\t31,\n2014 | Dec\t31,\n2014 | Dec\t31,\n2013 |
| Regulatory\tcapital |  |  |  |
| CET1\tcapital | $14,556 | $14,556 | NA |
| Tier\t1\tcapital(a) | 14,556 | 14,556 | $12,956 |
| Total\tcapital | 20,517 | 19,206 | 16,389 |
| Assets |  |  |  |
| Risk-weighted | 103,468 | 157,565 | 100,990 |
| Adjusted\taverage(b) | 128,111 | 128,111 | 109,731 |
| Capital\tratios(c) |  |  |  |
| CET1 | 14.1% | 9.2% | NA |
| Tier\t1(a) | 14.1 | 9.2 | 12.8% |
| Total | 19.8 | 12.2 | 16.2 |
| Tier\t1\tleverage | 11.4 | 11.4 | 11.8 |

(a) At	December	31,	2014,	trust	preferred	securities	included	in	Basel	III	Tier	1	capital	were $2.7 billion	and	$300	million	for	JPMorgan	Chase	and	JPMorgan	Chase	Bank,	N.A.,	respectively.	At December	31,	2014,	Chase	Bank	USA,	N.A.	had	no	trust	preferred	securities.

(b) Adjusted	average	assets,	for	purposes	of	calculating	the	leverage	ratio,	includes	total	quarterly average	assets	adjusted	for	unrealized	gains/(losses)	on	securities,	less	deductions	for	disallowed goodwill	and	other	intangible	assets,	investments	in	certain	subsidiaries,	and	the	total	adjusted carrying	value	of	nonfinancial	equity	investments	that	are	subject	to	deductions	from	Tier	1	capital.

(c) For	each	of	the	risk-based	capital	ratios	the	lower	of	the	Standardized	Transitional	or	Advanced Transitional	ratio	represents	the	Collins	Floor.

(d) 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	totaling	$130 million	and	$192	million	at	December	31,	2014,	and	December	31,	2013,	respectively;	and	deferred tax	liabilities	resulting	from	tax-deductible	goodwill	of	$2.7	billion	and	$2.8	billion	at	December 31,	2014,	and	December	31,	2013,	respectively.

Under	the	risk-based	capital	guidelines	of	the	Federal	Reserve,	JPMorgan	Chase is	required	to	maintain	minimum	ratios	of	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,	2014.

|  | Minimum	capital<br>ratios(a) | Well-capitalized<br>ratios(a) |
| :--- | :--- | :--- |
| Capital\tratios |  |  |
| CET1 | 4.0% | NA |
| Tier\t1 | 5.5 | 6.0% |
| Total | 8.0 | 10.0 |
| Tier\t1\tleverage | 4.0 | 5.0 |

(a) As	defined	by	the	regulations	issued	by	the	Federal	Reserve,	OCC	and	FDIC.	The	CET1	capital ratio	became	a	relevant	measure	of	capital	under	the	prompt	corrective	action	requirements	on January	1,	2015.

(b) Represents	requirements	for	bank	subsidiaries	pursuant	to	regulations	issued	under	the	FDIC Improvement	Act.	There	is	no	Tier	1	leverage	component	in	the	definition	of	a	well-capitalized bank	holding	company.

As	of	December	31,	2014,	and	2013,	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	consumer	(excluding	credit	card) and	wholesale	lending	commitments,	an	allowance	for	credit	losses	on	lending- related

commitments	is	maintained.	See	Note	15	for	further	discussion	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,	2014	and	2013.	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.	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.	Also,	the	Firm	typically	closes credit	card	lines	when	the	borrower	is	60	days	or	more	past	due.

|  | Contractual	amount | Contractual	amount | Contractual	amount | Contractual	amount | Contractual	amount |  | Carrying	value(i) |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | 2014 |  |  | 2013 | 2014 | 2013 |
| 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 | $2,166 | $4,389 | $1,841 | $3,411 | $11,807 | $13,158 | $— | $— |
| Home\tequity\t–\tjunior\tlien | 3,469 | 5,920 | 2,141 | 3,329 | 14,859 | 17,837 | — | — |
| Prime\tmortgage(a) | 8,579 | — | — | — | 8,579 | 4,817 | — | — |
| Subprime\tmortgage | — | — | — | — | — | — | — | — |
| Auto | 9,302 | 921 | 192 | 47 | 10,462 | 8,309 | 2 | 1 |
| Business\tbanking | 10,557 | 807 | 117 | 413 | 11,894 | 11,251 | 11 | 7 |
| Student\tand\tother | 97 | 8 | — | 447 | 552 | 685 | — | — |
| Total\tconsumer,\texcluding\tcredit\tcard | 34,170 | 12,045 | 4,291 | 7,647 | 58,153 | 56,057 | 13 | 8 |
| Credit\tcard | 525,963 | — | — | — | 525,963 | 529,383 | — | — |
| Total\tconsumer(b) | 560,133 | 12,045 | 4,291 | 7,647 | 584,116 | 585,440 | 13 | 8 |
| Wholesale: |  |  |  |  |  |  |  |  |
| (c)(d)\nOther\tunfunded\tcommitments\tto\textend\tcredit | 68,688 | 83,877 | 112,992 | 7,119 | 272,676 | 246,495 | 374 | 432 |
| Standby\tletters\tof\tcredit\tand\tother\tfinancial\tguarantees (c)(d)(e) | 22,584 | 29,753 | 34,982 | 2,555 | 89,874 | 92,723 | 788 | 943 |
| Unused\tadvised\tlines\tof\tcredit | 90,816 | 13,702 | 519 | 138 | 105,175 | 101,994 | — | — |
| Other\tletters\tof\tcredit(c) | 3,363 | 877 | 91 | — | 4,331 | 5,020 | 1 | 2 |
| Total\twholesale(f) | 185,451 | 128,209 | 148,584 | 9,812 | 472,056 | 446,232 | 1,163 | 1,377 |
| Total\tlending-related | $745,584 | $140,254 | $152,875 | $17,459 | $1,056,172 | $1,031,672 | $1,176 | $1,385 |
| Other\tguarantees\tand\tcommitments |  |  |  |  |  |  |  |  |
| Securities\tlending\tindemnification\tagreements\tand\tguarantees(g) | $171,059 | $— | $— | $— | $171,059 | $169,709 | $— | $— |
| Derivatives\tqualifying\tas\tguarantees | 3,009 | 167 | 12,313 | 38,100 | 53,589 | 56,274 | 80 | 72 |
| Unsettled\treverse\trepurchase\tand\tsecurities\tborrowing\tagreements | 40,993 | — | — | — | 40,993 | 38,211 | — | — |
| Loan\tsale\tand\tsecuritization-related\tindemnifications: |  |  |  |  |  |  |  |  |
| Mortgage\trepurchase\tliability | \tNA | \tNA | \tNA | \tNA | NA | NA | 275 | 681 |
| Loans\tsold\twith\trecourse | \tNA | \tNA | \tNA | \tNA | 6,063 | 7,692 | 102 | 131 |
| Other\tguarantees\tand\tcommitments(h) | 487 | 506 | 3,391 | 1,336 | 5,720 | 6,786 | (121) | (99) |

(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,	2014	and	2013,	reflects	the	contractual	amount	net	of	risk	participations	totaling	$243	million	and	$476	million,	respectively,	for	other	unfunded	commitments	to	extend	credit; $13.0	billion	and	$14.8	billion,	respectively,	for	standby	letters	of	credit	and	other	financial	guarantees;	and	 $469	million	and	$622	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,	2014	and	2013,	included	credit	enhancements	and	bond	and	commercial	paper	liquidity	commitments	to	U.S.	states	and	municipalities,	hospitals	and	other	non-profit	entities	of $14.8	billion	and	$18.9	billion,	respectively,	within	other	unfunded	commitments	to	extend	credit;	and	 $13.3	billion	and	$17.2	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) At	December	31,	2014	and	2013,	included	unissued	standby	letters	of	credit	commitments	of	$45.6	billion	and	$42.8	billion,	respectively.

(f) At	December	31,	2014	and	2013,	the	U.S.	portion	of	the	contractual	amount	of	total	wholesale	lending-related	commitments	was	 65%	and	68%,	respectively.

(g) At	December	31,	2014	and	2013,	collateral	held	by	the	Firm	in	support	of	securities	lending	indemnification	agreements	was	 $177.1	billion	and	$176.4	billion,	respectively.	Securities	lending collateral	comprises	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.

(h) At	December	31,	2014	and	2013,	included	unfunded	commitments	of	$147	million	and	$215	million,	respectively,	to	third-party	private	equity	funds;	and	 $961	million	and	$1.9	billion, respectively,	to	other	equity	investments.	These	commitments	included	$150	million	and	$184	million,	respectively,	related	to	investments	that	are	generally	fair	valued	at	net	asset	value	as discussed	in	Note	3.	In	addition,	at	both	December	31,	2014	and	2013,	included	letters	of	credit	hedged	by	derivative	transactions	and	managed	on	a	market	risk	basis	of	 $4.5	billion.

(i) 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	comprise	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.

Also	included	in	other	unfunded	commitments	to	extend	credit	are	commitments to	noninvestment-grade	counterparties	in	connection	with	leveraged	finance activities,	which	were	$23.7	billion	and	$18.3	billion	at	December	31,	2014	and 2013,	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	is	secured	by	collateral	and	typically	extinguished	by	the end	of	the	day.	During	2014,	the	Firm	extended	secured	clearance	advance facilities	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.	Through	these	facilities,	the	Firm	has	reduced	its	intra-day	credit	risk substantially;	the	average	daily	tri-party	repo	balance	was	$253	billion	during	the year	ended	December	31,	2013,	and	as	of	December	31,	2014,	the	secured clearance	advance	facility	maximum	outstanding	commitment	amount	was	$12.6 billion.

# 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,	2014	and	2013,	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	$789	million	and $945	million	at	December	31,	2014	and	2013,	respectively,	which	were	classified in	accounts	payable	and	other	liabilities	on	the	Consolidated	balance	sheets;	these carrying	values	included	$235	million	and	$265	million,	respectively,	for	the allowance	for	lending-related	commitments,	and	$554	million	and	$680	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,	2014	and	2013.

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

|  | 2014 |  | 2013 |  |
| :--- | :--- | :--- | :--- | :--- |
| December\t31,\n(in\tmillions) | Standby\tletters\tof\ncredit\tand\tother\tfinancial\nguarantees | Other\tletters\nof\tcredit | Standby\tletters\tof\ncredit\tand\tother\tfinancial\nguarantees | Other\tletters\nof\tcredit |
| Investment-grade(a) | $66,856 | $3,476 | $69,109 | $3,939 |
| Noninvestment-grade(a) | 23,018 | 855 | 23,614 | 1,081 |
| Total\tcontractual\tamount | $89,874 | $4,331 | $92,723 | $5,020 |
| Allowance\tfor\tlending-related\tcommitments | $234 | $1 | $263 | $2 |
| Commitments\twith\tcollateral | 39,726 | 1,509 | 40,410 | 1,473 |

(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.

# Advised	lines	of	credit

An	advised	line	of	credit	is	a	revolving	credit	line	which	specifies	the	maximum amount	the	Firm	may	make	available	to	an	obligor,	on	a	nonbinding	basis.	The borrower	receives	written	or	oral	advice	of	this	facility.	The	Firm	may	cancel	this facility	at	any	time	by	providing	the	borrower	notice	or,	in	some	cases,	without notice	as	permitted	by	law.

# 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	$53.6	billion and	$56.3	billion	at	December	31,	2014	and	2013,	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	$27.5	billion	and	$27.0 billion	at	December	31,	2014	and	2013,	respectively,	and	the	maximum	exposure to	loss	was	$2.9	billion	and	$2.8	billion	at	both	December	31,	2014	and	2013.	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	$102	million	and	$109 million	and	derivative	receivables	of	$22	million	and	$37	million	at December	31,	2014	and	2013,	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

In	the	normal	course	of	business,	the	Firm	enters	into	reverse	repurchase agreements	and	securities	borrowing	agreements	that	settle	at	a	future	date.	At settlement,	these	commitments	require	that	the	Firm	advance	cash	to	and	accept securities	from	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.	The	unsettled	reverse	repurchase	agreements	and	securities	borrowing agreements	predominantly	consist	of	agreements	with	regular-way	settlement periods.

# Loan	sales-	and	securitization-related	indemnifications

# Mortgage	repurchase	liability

In	connection	with	the	Firm's	mortgage	loan	sale	and	securitization	activities	with the	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	the	GSEs	(e.g.,	with "make-whole"	payments	to	reimburse	the	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	following	table	summarizes	the	change	in	the	mortgage	repurchase	liability for	each	of	the	periods	presented.

# Summary	of	changes	in	mortgage	repurchase	liability(a)

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Repurchase\tliability\tat\tbeginning\tof\tperiod | $681 | $2,811 | $3,557 |
| Net\trealized\tgains/(losses)(b) | 53 | (1,561) | (1,158) |
| Reclassification\tto\tlitigation\treserve | — | (179) | — |
| (Benefit)/provision\tfor\trepurchase(c) | (459) | (390) | 412 |
| Repurchase\tliability\tat\tend\tof\tperiod | $275 | $681 | $2,811 |

(a) On	October	25,	2013,	the	Firm	announced	that	it	had	reached	a	$1.1	billion	agreement	with the	FHFA	to	resolve,	other	than	certain	limited	types	of	exposures,	outstanding	and	future mortgage	repurchase	demands	associated	with	loans	sold	to	the	GSEs	from	2000	to	2008.

(b) Presented	net	of	third-party	recoveries	and	included	principal	losses	and	accrued	interest	on repurchased	loans,	"make-whole"	settlements,	settlements	with	claimants,	and	certain related	expense.	Make-whole	settlements	were	$11	million,	$414	million	and	$524	million, for	the	years	ended	December	31,	2014,	2013	and	2012,	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.	The seven	trustees	(or	separate	and	successor	trustees)	for	this	group	of	330	trusts have	accepted	the	RMBS	Trust	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, which	is	pending	in	New	York	state	court.

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	$78 billion	has	been	repaid.	In	addition,	approximately	$49	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,	2014,	was	approximately	$38	billion,	of	which	$8	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, 2014	and	2013,	the	unpaid	principal	balance	of	loans	sold	with	recourse	totaled $6.1	billion	and	$7.7	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	$102	million	and	$131 million	at	December	31,	2014	and	2013,	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.

# Credit	card	charge-backs

Chase	Paymentech	Solutions,	Card's	merchant	services	business	and	a	subsidiary of	JPMorgan	Chase	Bank,	N.A.,	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	credit 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,	Chase	Paymentech 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	Chase Paymentech	is	unable	to	collect	the	amount	from	the	merchant,	Chase Paymentech	will	bear	the	loss	for	the	amount	credited	or	refunded	to	the cardmember.	Chase	Paymentech	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)	Chase	Paymentech	does	not have	sufficient	collateral	from	the	merchant	to	provide	customer	refunds;	and	(3) Chase	Paymentech	does	not	have	sufficient	financial	resources	to	provide customer	refunds,	JPMorgan	Chase	Bank,	N.A.,	would	recognize	the	loss.

Chase	Paymentech	incurred	aggregate	losses	of	$10	million,	$14	million,	and $16	million	on	$847.9	billion,	$750.1	billion,	and	$655.2	billion	of	aggregate volume	processed	for	the	years	ended	December	31,	2014,	2013	and	2012, 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	$4	million	and	$5	million	at	December	31, 2014	and	2013,	respectively,	which	the	Firm	believes,	based	on	historical experience	and	the	collateral	held	by	Chase	Paymentech	of	$174	million	and $208	million	at	December	31,	2014	and	2013,	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	entering	into	securities	purchases and	sales	and	derivative	transactions,	with	central	counterparties	("CCPs"), including	exchange-traded	derivatives	("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	non-performance	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	provision	of	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	clearing member.

The	Firm	reflects	its	exposure	to	non-performance	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	in	its	Consolidated Financial	Statements.

It	is	difficult	to	estimate	the	Firm's	maximum	possible	exposure	through	its	role as	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

Through	the	provision	of	clearing	services,	the	Firm	is	a	member	of	several securities	and	derivative	exchanges	and	clearinghouses,	both	in	the	U.S.	and	other countries.	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	clearinghouses	require	the Firm	as	a	member	to	pay	a	pro	rata	share	of	losses	resulting	from	the clearinghouse'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	sold	as	part	of	the	Firm's	market- making	activities.	These	guarantees	are	not	included	in	the	table	on	page	288	of this	Note.	For	additional	information,	see	Note	21.

# Note	30	–	Commitments,	pledged	assets	and	collateral

# Lease	commitments

At	December	31,	2014,	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, 2014.

# Year	ended	December	31,	(in	millions)

| Year	ended	December	31,	(in	millions) |  |
| :--- | :--- |
| 2015 | $1,722 |
| 2016 | 1,682 |
| 2017 | 1,534 |
| 2018 | 1,281 |
| 2019 | 1,121 |
| After\t2019 | 5,101 |
| Total\tminimum\tpayments\trequired(a) | 12,441 |
| Less:\tSublease\trentals\tunder\tnoncancelable\tsubleases | (2,238) |
| Net\tminimum\tpayment\trequired | $10,203 |

(a) Lease	restoration	obligations	are	accrued	in	accordance	with	U.S.	GAAP,	and	are	not	reported	as	a	required minimum	lease	payment.

Total	rental	expense	was	as	follows.

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Gross\trental\texpense | $2,255 | $2,187 | $2,212 |
| Sublease\trental\tincome | (383) | (341) | (288) |
| Net\trental\texpense | $1,872 | $1,846 | $1,924 |

# Pledged	assets

Financial	assets	are	pledged	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,	2014	and	2013,	the	Firm	had pledged	assets	of	$324.5	billion	and	$251.3	billion,	respectively,	at	Federal Reserve	Banks	and	FHLBs.	In	addition,	as	of	December	31,	2014	and	2013,	the Firm	had	pledged	to	third	parties	$60.1	billion	and	$68.4	billion,	respectively,	of financial	instruments	it	owns	that	may	not	be	sold	or	repledged	by	such	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) | 2014 | 2013 |
| :--- | :--- | :--- |
| Securities | $118.7 | $68.1 |
| Loans | 248.2 | 230.3 |
| Trading\tassets\tand\tother | 169.0 | 163.3 |
| Total\tassets\tpledged | $535.9 | $461.7 |

# Collateral

At	December	31,	2014	and	2013,	the	Firm	had	accepted	assets	as	collateral	that	it could	sell	or	repledge,	deliver	or	otherwise	use	with	a	fair	value	of	approximately $761.7	billion	and	$725.0	billion,	respectively.	This	collateral	was	generally obtained	under	resale	agreements,	securities	borrowing	agreements,	customer margin	loans	and	derivative	agreements.	Of	the	collateral	received, approximately	$596.8	billion	and	$520.1	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.

Certain	prior	period	amounts	for	both	collateral,	as	well	as	pledged	assets (including	the	corresponding	pledged	assets	parenthetical	disclosure	for	trading assets	on	the	Consolidated	balance	sheets)	have	been	revised	to	conform	with	the current	period	presentation.

# Note	31	–	Litigation

# Contingencies

As	of	December	31,	2014,	the	Firm	and	its	subsidiaries	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	$5.8	billion	at	December	31,	2014.	This	estimated	aggregate	range of	reasonably	possible	losses	is	based	upon	currently	available	information	for those	proceedings	in	which	the	Firm	is	involved,	taking	into	account	the	Firm's best	estimate	of	such	losses	for	those	cases	for	which	such	estimate	can	be	made. For	certain	cases,	the	Firm	does	not	believe	that	an	estimate	can	currently	be made.	The	Firm's	estimate	involves	significant	judgment,	given	the	varying stages	of	the	proceedings	(including	the	fact	that	many	are	currently	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.

Set	forth	below	are	descriptions	of	the	Firm's	material	legal	proceedings.

Auto	Dealer	Regulatory	Matter.		The	Firm	is	engaged	in	discussions	with	the U.S.	Department	of	Justice	("DOJ")	about	potential	statistical	disparities	in markups	charged	to	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	putative 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").	Four	of	the	shareholder	derivative	actions	have been	dismissed,	and	plaintiffs	in

three	of	those	actions	have	appealed	those	dismissals.	Motions	to	dismiss	have also	been	filed	in	two	other	shareholder	derivative	actions.

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	asserts	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.	The	Firm	submitted	a response	to	the	Statement	of	Objections	in	January	2014,	and	the	EC	held	a hearing	in	May	2014.	DOJ	also	has	an	ongoing	investigation	into	the	CDS marketplace,	which	was	initiated	in	July	2009.

Separately,	the	Firm	and	other	industry	members	are	defendants	in	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 refers	to	the	ongoing	investigations	by	the	EC	and	DOJ	into	the	CDS	market,	and alleges	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.	Defendants	moved	to	dismiss	this	action,	and in	September	2014,	the	Court	granted	defendants'	motion	in	part,	dismissing claims	for	damages	based	on	transactions	effected	before	the	Autumn	of	2008,	as well	as	certain	other	claims.

Foreign	Exchange	Investigations	and	Litigation.	In	November	2014,	JPMorgan Chase	Bank,	N.A.	reached	separate	settlements	with	the	U.K.	Financial	Conduct Authority	("FCA"),	the	U.S.	Commodity	Futures	Trading	Commission	("CFTC") and	the	U.S.	Office	of	the	Comptroller	of	the	Currency	("OCC")	to	resolve	the agencies'	respective	civil	enforcement	claims	relating	to	the	Bank's	foreign exchange	("FX")	trading	business	(collectively,	the	"Settlement Agreements").	Under	the	Settlement	Agreements,	JPMorgan	Chase	Bank,	N.A. agreed	to	take	certain	remedial	measures	and	paid	penalties	of	£222	million	to	the FCA,	$310	million	to	the	CFTC	and	$350	million	to	the	OCC.

In	December	2014,	the	Hong	Kong	Monetary	Authority	("HKMA")	announced the	conclusion	of	its	FX-related	investigation	regarding	JPMorgan	Chase	Bank, N.A.	and	several	other	banks.	The	HKMA	required	the	banks,	including JPMorgan	Chase	Bank,	N.A.,	to	take	certain	remedial	measures.

Other	FX-related	regulatory	investigations	of	the	Firm	are	ongoing,	including	a criminal	investigation	by	DOJ.	These	investigations	are	focused	on	the	Firm's spot	FX	trading	and	sales	activities	as	well	as	controls	applicable	to	those activities.	The	Firm	continues	to	cooperate	with	these	investigations.	The	Firm	is also	engaged	in	discussions	regarding	potential	resolution	with	DOJ.

Since	November	2013,	a	number	of	class	actions	have	been	filed	in	the	United States	District	Court	for	the	Southern	District	of	New	York	against	a	number	of foreign	exchange	dealers,	including	the	Firm,	for	alleged	violations	of	federal	and state	antitrust	laws	and	unjust	enrichment	based	on	an	alleged	conspiracy	to manipulate	foreign	exchange	rates	reported	on	the	WM/Reuters	service.	In	March 2014,	plaintiffs	filed	a	consolidated	amended	U.S.	class	action	complaint;	two other	class	actions	were	brought	by	non-U.S.-based	plaintiffs.	The	Court	denied defendants'	motion	to	dismiss	the	U.S.	class	action	and	granted	the	motion	to dismiss	the	two	non-U.S.	class	actions.	In	January	2015,	the	Firm	settled	the	U.S. class	action,	and	this	settlement	is	subject	to	court	approval.

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.	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.	JPMorgan	Chase	Bank, N.A.	has	filed	a	petition	requesting	that	the	full	Court	of	Appeals	rehear	the	case en	banc.	In	the	event	that	the	request	for	rehearing	is	denied,	continued proceedings	in	the	Bankruptcy	Court	are	anticipated	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,	which	was	not	the	subject	of	the termination	statement.

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	have appealed.	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	the	actions	was	denied	in	July	2014.

Investment	Management	Litigation.	The	Firm	is	defending	two	pending	cases	that allege	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	losses	of	more	than	$1 billion	in	market	value	of	these	securities.	Discovery	is	proceeding.

# 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	asserts	both	federal	bankruptcy	law	and	state common	law	claims,	and	seeks,	among	other	relief,	to	recover	$7.9	billion	in collateral	that	was	transferred	to	JPMorgan	Chase	Bank,	N.A.	in	the	weeks preceding	LBHI's	bankruptcy.	The	amended	complaint	also	seeks	unspecified damages	on	the	grounds	that	JPMorgan	Chase	Bank,	N.A.'s	collateral	requests hastened	LBHI's	bankruptcy.	The	Court	dismissed	the	counts	of	the	amended complaint	that	sought	to	void	the	allegedly	constructively	fraudulent	and preferential	transfers	made	to	the	Firm	during	the	months	of	August	and September	2008.	The	Firm	has	filed	counterclaims	against	LBHI	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.	The	case	has	been	transferred	from	the	Bankruptcy	Court	to	the District	Court,	and	the	Firm	has	moved	for	summary	judgment	seeking	the dismissal	of	all	of	LBHI's	claims.	LBHI	has	also	moved	for	summary	judgment on	certain	of	its	claims	and	seeking	the	dismissal	of	the	Firm's	counterclaims.

In	the	Bankruptcy	Court	proceedings,	LBHI	and	several	of	its	subsidiaries	that had	been	Chapter	11	debtors	have	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.	The	Firm	responded	to	this	separate complaint	and	objection	in	February	2013.	LBHI	and	the	Committee	have	also 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.	Discovery	regarding	both objections	is

ongoing.	In	January	2015,	LBHI	filed	additional	objections	relating	to	a	variety of	claims	that	the	Firm	had	filed	in	the	Bankruptcy	Court	proceedings.	The bankruptcy	claims	and	other	claims	of	the	Firm	against	Lehman	entities	have been	paid	in	full,	subject	to	potential	adjustment	depending	on	the	outcome	of	the objections	filed	by	LBHI	and	the	Committee.

# 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	DOJ,	the CFTC,	the	Securities	and	Exchange	Commission	(the	"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	to	other processes	for	the	setting	of	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.	In	December	2013,	JPMorgan	Chase	reached	a settlement	with	the	EC	regarding	its	Japanese	Yen	LIBOR	investigation	and agreed	to	pay	a	fine	of	€80	million.	In	January	2014,	the	Canadian	Competition Bureau	announced	that	it	has	discontinued	its	investigation	related	to	Yen 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.	In	October	2014,	JPMorgan	Chase	reached	a	settlement	with	the	EC regarding	the	EC's	Swiss	franc	LIBOR	investigation	and	agreed	to	pay	a	fine	of €72	million.	In	January	2015,	the	FCA	informed	JPMorgan	Chase	that	it	has discontinued	its	investigation	of	the	Firm	concerning	LIBOR	and	EURIBOR.

In	addition,	the	Firm	has	been	named	as	a	defendant	along	with	other	banks	in	a series	of	individual	and	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.

The	U.S.	dollar	LIBOR-related	putative	class	actions	were	consolidated	for	pre- trial	purposes	in	the	United	States

District	Court	for	the	Southern	District	of	New	York.	The	Court	stayed	all	related cases	while	motions	to	dismiss	the	three	lead	class	actions	were	pending.	In March	2013,	the	Court	granted	in	part	and	denied	in	part	the	defendants'	motions to	dismiss	the	claims	in	the	three	lead	class	actions,	including	dismissal	with prejudice	of	the	antitrust	claims.	In	relation	to	the	Firm,	the	Court	has	permitted certain	claims	under	the	Commodity	Exchange	Act	and	common	law	claims	to proceed.	In	September	2013,	class	plaintiffs	in	two	of	the	three	lead	class	actions filed	amended	complaints,	which	defendants	moved	to	dismiss.	Plaintiffs	in	the third	class	action	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	remanding	the	case	to	the	Court	of	Appeals	for	further proceedings.	In	February	2015,	the	District	Court	entered	a	judgment	on	certain other	plaintiffs'	antitrust	claims	so	that	those	plaintiffs	could	also	participate	in the	appeal.	Motions	to	dismiss	are	pending	in	the	remaining	previously	stayed individual	actions	and	class	actions.

The	Firm	is	one	of	the	defendants	in	a	putative	class	action	alleging	manipulation of	Euroyen	TIBOR	and	Yen	LIBOR	which	was	filed	in	the	United	States	District Court	for	the	Southern	District	of	New	York	on	behalf	of	plaintiffs	who purchased	or	sold	exchange-traded	Euroyen	futures	and	options	contracts.	In March	2014,	the	Court	granted	in	part	and	denied	in	part	the	defendants'	motions to	dismiss,	including	dismissal	of	plaintiff's	antitrust	and	unjust	enrichment claims.

The	Firm	is	one	of	the	defendants	in	a	putative	class	action	filed	in	the	United States	District	Court	for	the	Southern	District	of	New	York	relating	to	the	interest rate	benchmark	EURIBOR.	The	case	is	currently	stayed.

The	Firm	is	also	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.	In	December	2014,	defendants	filed	a	motion	to dismiss.

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	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.	Plaintiffs	have	petitioned	the	United	States	Supreme	Court	for	a writ	of	certiorari.

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.	Plaintiffs	have filed	a	notice	of	appeal.

A	putative	class	action	has	been	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	the	previous	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	has	been	filed	in	the United	States	District	Court	for	the	Middle	District	of	Florida,	although	it	is	not styled	as	a	class	action,	and	includes	a	claim	pursuant	to	a	Florida	statute.	The Firm	has	moved	to	transfer	these	cases	to	the	United	States	District	Court	for	the Southern	District	of	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.	In	July	2014,	the	federal	court	granted defendants'	motions	to	dismiss	two	of	the	actions.	One	plaintiff	chose	not	to appeal	and	the	other	filed	a	motion	for	reconsideration	which	was	denied	in November	2014.	The	latter	plaintiff	has	filed	an	appeal.	In	the	remaining	state court	action,	a	hearing	on	defendants'	motion	to	dismiss	was	held	in	October 2014,	and	the	court	reserved	decision.

MF	Global.	J.P.	Morgan	Securities	LLC	has	been	named	as	one	of	several defendants	in	a	number	of	putative	class	actions	filed	by	purchasers	of	MF Global's	publicly	traded	securities	asserting	violations	of	federal	securities	laws and	alleging	that	the	offering	documents	contained	materially	false	and misleading	statements	and	omissions	regarding	MF	Global.	These	actions	have been	settled,	subject	to	final	approval	by	the	court.	The	Firm	also	has	responded to	inquiries	from	the	CFTC	relating	to	the	Firm's	banking	and	other	business relationships	with	MF	Global,	including	as	a	depository	for	MF	Global's customer	segregated	accounts.

Mortgage-Backed	Securities	and	Repurchase	Litigation	and	Related	Regulatory Investigations.	JPMorgan	Chase	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	class	action	suits	on	behalf	of	MBS	purchasers,	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	under	"Repurchase	Litigation" and	"Government	Enforcement	Investigations	and	Litigation"	below,	there	are currently	pending	and	tolled	investor	and	monoline	insurer	claims	involving	MBS with	an	original	principal	balance	of	approximately	$41	billion,	of	which	$38 billion	involves	JPMC,	Bear	Stearns	or	Washington	Mutual	as	issuer	and	$3 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.	Two	class	actions	remain	pending	against JPMC	and	Bear	Stearns	as	MBS	issuers	in	the	United	States	District	Court	for	the Southern	District	of	New	York.	In	the	action	concerning	JPMC,	plaintiffs'	motion for	class	certification	has	been	granted	with	respect	to	liability	but	denied	without prejudice	as	to	damages.	In	the	action	concerning	Bear	Stearns,	the	parties	have reached	a	settlement	in	principle,	which	is	subject	to	court	approval.	The	Firm	is also	defending	a	class	action	brought	against	Bear	Stearns	in	the	United	States District	Court	for	the	District	of	Massachusetts,	in	which	the	court's	decision	on defendants'	motion	to	dismiss	is	pending.

Issuer	Litigation	–	Individual	Purchaser	Actions.	In	addition	to	class	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).	These	actions	are	pending	in	federal	and	state	courts across	the	U.S.	and	are	in	various	stages	of	litigation.

Monoline	Insurer	Litigation.	The	Firm	is	defending	two	pending	actions	relating to	the	same	monoline	insurer's	guarantees	of	principal	and	interest	on	certain classes	of	11	different	Bear	Stearns	MBS	offerings.	These	actions	are	pending	in state	court	in	New	York	and	are	in	various	stages	of	litigation.

Underwriter	Actions.	In	actions	against	the	Firm	solely	as	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. There	are	currently	actions	of	this	type	pending	against	the	Firm	in	federal	and state	courts	in

various	stages	of	litigation.	One	such	class	action	has	been	settled,	subject	to	final approval	by	the	court.

Repurchase	Litigation.	The	Firm	is	defending	a	number	of	actions	brought	by trustees,	securities	administrators	or	master	servicers	of	various	MBS	trusts	and others	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	the	330	MBS	trusts	issued between	2005	and	2008.	The	offer	does	not	resolve	claims	relating	to	Washington Mutual	MBS.	The	seven	trustees	(or	separate	and	successor	trustees)	for	this group	of	330	trusts	has	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.	Certain	investors	in	some	of	the	trusts	for which	the	settlement	has	been	accepted	have	intervened	in	the	judicial	approval proceeding,	challenging	the	trustees'	acceptance	of	the	settlement.

Additional	actions	have	been	filed	against	third-party	trustees	that	relate	to	loan repurchase	and	servicing	claims	involving	trusts	that	the	Firm	sponsored.

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	and	one	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.

Government	Enforcement	Investigations	and	Litigation.	The	Firm	is	responding to	an	ongoing	investigation	being	conducted	by	the	Criminal	Division	of	the United	States	Attorney's	Office	for	the	Eastern	District	of	California	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	DOJ, including	the	U.S.	Attorney's	Office	for	the	District	of	Connecticut,	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.	The	Attorney	General	of

Massachusetts	filed	an	action	against	the	Firm,	other	servicers	and	a	mortgage recording	company,	asserting	claims	for	various	alleged	wrongdoings	relating	to mortgage	assignments	and	use	of	the	industry's	electronic	mortgage	registry.	In January	2015,	the	Firm	entered	into	a	settlement	resolving	this	action.

The	Firm	entered	into	a	settlement	resolving	a	putative	class	action	lawsuit relating	to	its	filing	of	affidavits	or	other	documents	in	connection	with	mortgage foreclosure	proceedings,	and	the	court	granted	final	approval	of	the	settlement	in January	2015.

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.

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	("FHA")	and	Equal	Credit	Opportunity Act	("ECOA")	in	connection	with	its	mortgage	lending	practices.	In	addition, three	municipalities	and	a	school	district	have	commenced	litigation	against	the Firm	alleging	violations	of	an	unfair	competition	law	and	of	the	FHA	and	ECOA and	seeking	statutory	damages	for	the	unfair	competition	claim,	and,	for	the	FHA and	ECOA	claims,	damages	in	the	form	of	lost	tax	revenue	and	increased municipal	costs	associated	with	foreclosed	properties.	The	court	denied	a	motion to	dismiss	in	one	of	the	municipal	actions,	the	school	district	action	was	dismissed with	prejudice,	another	municipal	action	was	recently	served,	and	motions	to dismiss	are	pending	in	the	remaining	actions.

JPMorgan	Chase	Bank,	N.A.	is	responding	to	inquiries	by	the	Executive	Office	of the	U.S.	Bankruptcy	Trustee	and	various	regional	U.S.	Bankruptcy	Trustees relating	to	mortgage	payment	change	notices	and	escrow	statements	in bankruptcy	proceedings.

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.

Parmalat.	In	2003,	following	the	bankruptcy	of	the	Parmalat	group	of	companies ("Parmalat"),	criminal	prosecutors	in	Italy	investigated	the	activities	of	Parmalat, its	directors	and	the	financial	institutions	that	had	dealings	with	them	following the	collapse	of	the	company.	In	March	2012,	the	criminal	prosecutor	served	a notice	indicating	an	intention	to	pursue	criminal	proceedings	against	four	former employees	of	the	Firm	(but	not	against	the	Firm)	on	charges	of	conspiracy	to cause	Parmalat's	insolvency	by	underwriting	bonds	and	continuing	derivatives trading	when	Parmalat's	balance	sheet	was	false.	A	preliminary	hearing,	in	which the	judge	will	determine	whether	to	recommend	that	the	matter	go	to	a	full	trial,	is ongoing.	The	final	hearings	have	been	scheduled	for	March	2015.

In	addition,	the	administrator	of	Parmalat	commenced	five	civil	actions	against JPMorgan	Chase	entities	including:	two	claw-back	actions;	a	claim	relating	to bonds	issued	by	Parmalat	in	which	it	is	alleged	that	JPMorgan	Chase	kept Parmalat	"artificially"	afloat	and	delayed	the	declaration	of	insolvency;	and similar	allegations	in	two	claims	relating	to	derivatives	transactions.

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.

Power	Matters.	The	United	States	Attorney's	Office	for	the	Southern	District	of New	York	is	investigating	matters	relating	to	the	bidding	activities	that	were	the subject	of	the	July	2013	settlement	between	J.P.	Morgan	Ventures	Energy	Corp. and	the	Federal	Energy	Regulatory	Commission.	The	Firm	is	responding	to	and cooperating	with	the	investigation.

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	continuing	to	cooperate	with	these	investigations.

Sworn	Documents,	Debt	Sales	and	Collection	Litigation	Practices.	The	Firm	has been	responding	to	formal	and	informal	inquiries	from	various	state	and	federal regulators	regarding	practices	involving	credit	card	collections	litigation (including	with	respect	to	sworn	documents),	the	sale	of	consumer	credit	card debt	and	securities	backed	by	credit	card	receivables.

Separately,	the	Consumer	Financial	Protection	Bureau	and	multiple	state Attorneys	General	are	conducting	investigations	into	the	Firm's	collection	and sale	of	consumer	credit	card	debt.	The	California	and	Mississippi	Attorneys General	have	filed	separate	civil	actions	against	JPMorgan	Chase	&	Co.,	Chase Bank	USA,	N.A.	and	Chase	BankCard	Services,	Inc.	alleging	violations	of	law relating	to	debt	collection	practices.

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	breach	of	various	mortgage	securitization agreements	and	alleged	violation	of	certain	representations	and	warranties	given by	certain	Washington	Mutual	affiliates	in	connection	with	those	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.	The	Firm	and	the	FDIC have	filed	opposing	motions,	each	seeking	a	ruling	that	the	liabilities	at	issue	are borne	by	the	other.

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.	Discovery	is	ongoing.

JPMorgan	Chase	has	also	filed	a	complaint	in	the	United	States	District	Court	for the	District	of	Columbia	against	the	FDIC	in	its	capacity	as	receiver	for Washington	Mutual	Bank	and	in	its	corporate	capacity	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.

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.

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.	The	Firm	believes	it	has meritorious	defenses	to	the	claims	asserted	against	it	in	its	currently	outstanding legal	proceedings	and	it	intends	to	defend	itself	vigorously	in	all	such	matters. Additional	legal	proceedings	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,	2014,	2013 and	2012,	the	Firm	incurred	$2.9	billion,	$11.1	billion	and	$5.0	billion, respectively,	of	legal	expense.	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

# Note	32	–	International	operations

The	following	table	presents	income	statement-related	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 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 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) |  | 70,062 | 48,186 | 21,876 | 16,507 | 1,899,874 |
| Total |  | $94,205 | $64,413 | $29,792 | $21,762 | $2,573,126 |
|  | 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) |  | 72,602 | 55,749 | 16,853 | 11,446 | 1,713,470 |
| Total |  | $96,606 | $70,692 | $25,914 | $17,923 | $2,415,689 |
|  | 2012 |  |  |  |  |  |
| Europe/Middle\tEast\tand\tAfrica |  | $10,522 | $9,326 | $1,196 | $1,508 | $553,147 |
| Asia\tand\tPacific |  | 5,605 | 3,952 | 1,653 | 1,048 | 167,955 |
| Latin\tAmerica\tand\tthe\tCaribbean |  | 2,328 | 1,580 | 748 | 454 | 53,984 |
| Total\tinternational |  | 18,455 | 14,858 | 3,597 | 3,010 | 775,086 |
| North\tAmerica(a) |  | 78,576 | 53,256 | 25,320 | 18,274 | 1,584,055 |
| Total |  | $97,031 | $68,114 | $28,917 | $21,284 | $2,359,141 |

(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	77–78.	For	a	further	discussion	concerning JPMorgan	Chase's	business	segments,	see	Business	Segment	Results	on	pages 79–80.

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

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

The	Corporate	&	Investment	Bank	("CIB"),	comprised	of	Banking	and	Markets &	Investor	Services,	offers	a	broad	suite	of	investment	banking,	market-making, prime	brokerage,	and	treasury	and	securities	products	and	services	to	a	global client	base	of	corporations,	investors,	financial	institutions,	government	and municipal	entities.	Within	Banking,	the	CIB	offers	a	full	range	of	investment banking	products	and	services	in	all	major	capital	markets,	including	advising	on corporate	strategy	and	structure,	capital-raising	in	equity	and	debt	markets,	as well	as	loan	origination	and	syndication.	Also	included	in	Banking	is	Treasury Services,	which	includes	transaction	services,	comprised	primarily	of	cash management	and	liquidity	solutions,	and	trade	finance	products.	The	Markets	& Investor	Services	segment	of	the	CIB	is	a	global	market-maker	in	cash	securities and	derivative	instruments,	and	also	offers	sophisticated	risk	management solutions,	prime

brokerage,	and	research.	Markets	&	Investor	Services	also	includes	the	Securities Services	business,	a	leading	global	custodian	which	includes	custody,	fund accounting	and	administration,	and	securities	lending	products	sold	principally	to asset	managers,	insurance	companies	and	public	and	private	investment	funds.

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

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

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

# Segment	results

The	following	tables	provide	a	summary	of	the	Firm's	segment	results	as	of	or for	the	years	ended	December	31,	2014,	2013	and	2012	on	a	managed	basis.	Total net	revenue	(noninterest	revenue	and	net	interest	income)	for	each	of	the segments	is	presented	on	a	fully	taxable-equivalent	("FTE")	basis.	Accordingly, revenue	from	investments	that	receive	tax	credits	and	tax-exempt	securities	is presented	in	the	managed	results	on	a	basis	comparable	to	taxable	investments and	securities.	This	non-GAAP	financial	measure	allows	management	to	assess the	comparability	of	revenue	arising	from	both	taxable	and	tax-

exempt	sources.	The	corresponding	income	tax	impact	related	to	tax-exempt items	is	recorded	within	income	tax	expense/(benefit).

# Segment	results	and	reconciliation

| As	of	or	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) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| Noninterest\trevenue | $15,937 | $17,552 | $20,813 | $23,458 | $23,810 | $23,104 | $2,349 | $2,298 | $2,283 |
| Net\tinterest\tincome | 28,431 | 28,985 | 29,465 | 11,175 | 10,976 | 11,658 | 4,533 | 4,794 | 4,629 |
| Total\tnet\trevenue | 44,368 | 46,537 | 50,278 | 34,633 | 34,786 | 34,762 | 6,882 | 7,092 | 6,912 |
| Provision\tfor\tcredit\tlosses | 3,520 | 335 | 3,774 | (161) | (232) | (479) | (189) | 85 | 41 |
| Noninterest\texpense | 25,609 | 27,842 | 28,827 | 23,273 | 21,744 | 21,850 | 2,695 | 2,610 | 2,389 |
| Income/(loss)\tbefore\tincome\ttax\texpense/(benefit) | 15,239 | 18,360 | 17,677 | 11,521 | 13,274 | 13,391 | 4,376 | 4,397 | 4,482 |
| Income\ttax\texpense/(benefit) | 6,054 | 7,299 | 6,886 | 4,596 | 4,387 | 4,719 | 1,741 | 1,749 | 1,783 |
| Net\tincome/(loss) | $9,185 | $11,061 | $10,791 | $6,925 | $8,887 | $8,672 | $2,635 | $2,648 | $2,699 |
| Average\tcommon\tequity | $51,000 | $46,000 | $43,000 | $61,000 | $56,500 | $47,500 | $14,000 | $13,500 | $9,500 |
| Total\tassets | 455,634 | 452,929 | 467,282 | 861,819 | 843,577 | 876,107 | 195,267 | 190,782 | 181,502 |
| Return\ton\tcommon\tequity | 18% | 23% | 25% | 10% | 15% | 18% | 18% | 19% | 28% |
| Overhead\tratio | 58 | 60 | 57 | 67 | 63 | 63 | 39 | 37 | 35 |

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

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

As	part	of	its	funds	transfer	pricing	process,	the	Firm	allocates	substantially	all	of the	cost	of	its	outstanding	preferred	stock	to	its	reportable	business	segments, while	retaining	the	balance	of	the	cost	in	Corporate.	Prior	to	the	fourth	quarter	of 2014,	this	cost	was	allocated	to	the	Firm's	reportable	business	segments	as interest	expense,	with	an	offset	recorded	as	interest	income	in	Corporate. Effective	with	the	fourth	quarter	of	2014,	this	cost	is	no	longer	included	in interest	income	and	interest	expense	in	the

segments,	but	rather	is	now	included	in	net	income	applicable	to	common	equity to	be	consistent	with	the	presentation	of	firmwide	results.	As	a	result	of	this reporting	change,	net	interest	income	and	net	income	in	the	reportable	business segments	increases;	however,	there	was	no	impact	to	the	segments'	return	on common	equity	("ROE").	The	Firm's	net	interest	income,	net	income, Consolidated	balance	sheets	and	consolidated	results	of	operations	were	not impacted	by	this	reporting	change,	as	preferred	stock	dividends	have	been	and continue	to	be	distributed	from	retained	earnings	and,	accordingly,	were	never reported	as	a	component	of	the	Firm's	consolidated	net	interest	income	or	net income.	Prior	period	segment	amounts	have	been	revised	to	conform	with	the current	period	presentation.

# (table	continued	from	previous	page)

|  | Asset	Management |  |  | Corporate |  |  | Reconciling	Items(a) |  |  | Total |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| $9,588 | $9,029 | $7,847 | $1,972 | $3,093 | $190 | $(2,733) | $(2,495) | $(2,116) | $50,571 | $53,287 | $52,121 |
| 2,440 | 2,376 | 2,163 | (1,960) | (3,115) | (2,262) | (985) | (697) | (743) | 43,634 | 43,319 | 44,910 |
| 12,028 | 11,405 | 10,010 | 12 | (22) | (2,072) | (3,718) | (3,192) | (2,859) | 94,205 | 96,606 | 97,031 |
| 4 | 65 | 86 | (35) | (28) | (37) | — | — | — | 3,139 | 225 | 3,385 |
| 8,538 | 8,016 | 7,104 | 1,159 | 10,255 | 4,559 | — | — | — | 61,274 | 70,467 | 64,729 |
| 3,486 | 3,324 | 2,820 | (1,112) | (10,249) | (6,594) | (3,718) | (3,192) | (2,859) | 29,792 | 25,914 | 28,917 |
| 1,333 | 1,241 | 1,078 | (1,976) | (3,493) | (3,974) | (3,718) | (3,192) | (2,859) | 8,030 | 7,991 | 7,633 |
| $2,153 | $2,083 | $1,742 | $864 | $(6,756) | $(2,620) | $— | $— | $— | $21,762 | $17,923 | $21,284 |
| $9,000 | $9,000 | $7,000 | $72,400 | $71,409 | $77,352 | $— | $— | $— | $207,400 | $196,409 | $184,352 |
| 128,701 | 122,414 | 108,999 | 931,705 | 805,987 | 725,251 | NA | NA | NA | 2,573,126 | 2,415,689 | 2,359,141 |
| 23% | 23% | 24% | NM | NM | NM | NM | NM | NM | 10% | 9% | 11% |
| 71 | 70 | 71 | NM | NM | NM | NM | NM | NM | 65 | 73 | 67 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport | JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  |  |  |  |  |  | 305 |

# Note	34	–	Parent	company

# Parent	company	–	Statements	of	income	and	comprehensive	income

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Income |  |  |  |
| Dividends\tfrom\tsubsidiaries\tand\taffiliates: |  |  |  |
| Bank\tand\tbank\tholding\tcompany | $— | $1,175 | $4,828 |
| Nonbank(a) | 14,716 | 876 | 1,972 |
| Interest\tincome\tfrom\tsubsidiaries | 378 | 757 | 1,041 |
| Other\tinterest\tincome | 284 | 303 | 293 |
| Other\tincome\tfrom\tsubsidiaries,\nprimarily\tfees: |  |  |  |
| Bank\tand\tbank\tholding\tcompany | 779 | 318 | 939 |
| Nonbank | 52 | 2,065 | 1,207 |
| Other\tincome/(loss) | 508 | (1,380) | 579 |
| Total\tincome | 16,717 | 4,114 | 10,859 |
| Expense |  |  |  |
| Interest\texpense\tto\tsubsidiaries\tand\naffiliates(a) | 169 | 309 | 836 |
| Other\tinterest\texpense | 3,645 | 4,031 | 4,679 |
| Other\tnoninterest\texpense | 827 | 9,597 | 2,399 |
| Total\texpense | 4,641 | 13,937 | 7,914 |
| Income\t(loss)\tbefore\tincome\ttax\tbenefit\tand\nundistributed\tnet\tincome\tof\tsubsidiaries | 12,076 | (9,823) | 2,945 |
| Income\ttax\tbenefit | 1,430 | 4,301 | 1,665 |
| Equity\tin\tundistributed\tnet\tincome\tof\nsubsidiaries | 8,256 | 23,445 | 16,674 |
| Net\tincome | $21,762 | $17,923 | $21,284 |
| Other\tcomprehensive\tincome,\tnet | 990 | (2,903) | 3,158 |
| Comprehensive\tincome | $22,752 | $15,020 | $24,442 |

| December	31,	(in	millions) | 2014 | 2013 |
| :--- | :--- | :--- |
| Assets |  |  |
| Cash\tand\tdue\tfrom\tbanks | $211 | $264 |
| Deposits\twith\tbanking\tsubsidiaries | 95,884 | 64,843 |
| Trading\tassets | 18,222 | 13,727 |
| Available-for-sale\tsecurities | 3,321 | 15,228 |
| Loans | 2,260 | 2,829 |
| Advances\tto,\tand\treceivables\tfrom,\tsubsidiaries: |  |  |
| Bank\tand\tbank\tholding\tcompany | 33,810 | 21,693 |
| Nonbank | 52,626 | 68,788 |
| Investments\t(at\tequity)\tin\tsubsidiaries\tand\taffiliates: |  |  |
| Bank\tand\tbank\tholding\tcompany | 216,070 | 196,950 |
| Nonbank(a) | 41,173 | 50,996 |
| Other\tassets | 18,645 | 18,877 |
| Total\tassets | $482,222 | $454,195 |
| Liabilities\tand\tstockholders'\tequity |  |  |
| Borrowings\tfrom,\tand\tpayables\tto,\tsubsidiaries\tand\naffiliates(a) | $17,442 | $14,328 |
| Other\tborrowed\tfunds,\tprimarily\tcommercial\tpaper | 49,586 | 55,454 |
| Other\tliabilities | 11,918 | 11,367 |
| Long-term\tdebt(b)(c) | 171,211 | 161,868 |
| Total\tliabilities(c) | 250,157 | 243,017 |
| Total\tstockholders'\tequity | 232,065 | 211,178 |
| Total\tliabilities\tand\tstockholders'\tequity | $482,222 | $454,195 |

# Parent	company	–	Statements	of	cash	flows

| (in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Operating\tactivities |  |  |  |
| Net\tincome | $21,762 | $17,923 | $21,284 |
| Less:\tNet\tincome\tof\tsubsidiaries\tand\naffiliates(a) | 22,972 | 25,496 | 23,474 |
| Parent\tcompany\tnet\tloss | (1,210) | (7,573) | (2,190) |
| Cash\tdividends\tfrom\tsubsidiaries\tand\naffiliates(a) | 14,714 | 1,917 | 6,798 |
| Other\toperating\tadjustments | (1,698) | 3,180 | 2,376 |
| Net\tcash\tprovided\tby/(used\tin)\toperating\nactivities | 11,806 | (2,476) | 6,984 |
| Investing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Deposits\twith\tbanking\tsubsidiaries | (31,040) | 10,679 | 16,100 |
| Available-for-sale\tsecurities: |  |  |  |
| Proceeds\tfrom\tpaydowns\tand\tmaturities | 12,076 | 61 | 621 |
| Purchases | — | (12,009) | (364) |
| Other\tchanges\tin\tloans,\tnet | (319) | (713) | (350) |
| Advances\tto\tand\tinvestments\tin\tsubsidiaries\nand\taffiliates,\tnet | 3,306 | 14,469 | 9,497 |
| All\tother\tinvesting\tactivities,\tnet | 32 | 22 | 25 |
| Net\tcash\tprovided\tby/(used\tin)\tinvesting\nactivities | (15,945) | 12,509 | 25,529 |
| Financing\tactivities |  |  |  |
| Net\tchange\tin: |  |  |  |
| Borrowings\tfrom\tsubsidiaries\tand\naffiliates(a) | 4,454 | (2,715) | (14,038) |
| Other\tborrowed\tfunds | (5,778) | (7,297) | 3,736 |
| Proceeds\tfrom\tthe\tissuance\tof\tlong-term\ndebt | 40,284 | 31,303 | 28,172 |
| Payments\tof\tlong-term\tdebt | (31,050) | (21,510) | (44,240) |
| Excess\ttax\tbenefits\trelated\tto\tstock-based\ncompensation | 407 | 137 | 255 |
| Proceeds\tfrom\tissuance\tof\tpreferred\tstock | 8,847 | 3,873 | 1,234 |
| Redemption\tof\tpreferred\tstock | — | (1,800) | — |
| Treasury\tstock\tand\twarrants\trepurchased | (4,760) | (4,789) | (1,653) |
| Dividends\tpaid | (6,990) | (6,056) | (5,194) |
| All\tother\tfinancing\tactivities,\tnet | (1,328) | (1,131) | (701) |
| Net\tcash\tprovided\tby/(used\tin)\tfinancing\nactivities | 4,086 | (9,985) | (32,429) |
| Net\tincrease/(decrease)\tin\tcash\tand\tdue\nfrom\tbanks | (53) | 48 | 84 |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tbeginning |  |  |  |
| of\tthe\tyear,\tprimarily\twith\tbank |  |  |  |
| subsidiaries | 264 | 216 | 132 |
| Cash\tand\tdue\tfrom\tbanks\tat\tthe\tend\tof |  |  |  |
| the\tyear,\tprimarily\twith\tbank |  |  |  |
| subsidiaries | $211 | $264 | $216 |
| Cash\tinterest\tpaid | $3,921 | $4,409 | $5,690 |
| Cash\tincome\ttaxes\tpaid,\tnet | 200 | 2,390 | 3,080 |

(a) Affiliates	include	trusts	that	issued	guaranteed	capital	debt	securities	("issuer	trusts").	The	Parent	received dividends	of	$2	million,	$5	million	and	$12	million	from	the	issuer	trusts	in	2014,	2013	and	2012,	respectively. For	further	discussion	on	these	issuer	trusts,	see	Note	21.

(c) For	information	regarding	the	Firm's	guarantees	of	its	subsidiaries'	obligations,	see	Note	21	and	Note 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 | $22,512 | $24,246 | $24,454 | $22,993 | $23,156 | $23,117 | $25,211 | $25,122 |
| Total\tnoninterest\texpense | 15,409 | 15,798 | 15,431 | 14,636 | 15,552 | 23,626 | 15,866 | 15,423 |
| Pre-provision\tprofit/(loss) | 7,103 | 8,448 | 9,023 | 8,357 | 7,604 | (509) | 9,345 | 9,699 |
| Provision\tfor\tcredit\tlosses | 840 | 757 | 692 | 850 | 104 | (543) | 47 | 617 |
| Income\tbefore\tincome\ttax\texpense | 6,263 | 7,691 | 8,331 | 7,507 | 7,500 | 34 | 9,298 | 9,082 |
| Income\ttax\texpense | 1,332 | 2,119 | 2,346 | 2,233 | 2,222 | 414 | 2,802 | 2,553 |
| Net\tincome/(loss) | $4,931 | $5,572 | $5,985 | $5,274 | $5,278 | $(380) | $6,496 | $6,529 |
| Per\tcommon\tshare\tdata |  |  |  |  |  |  |  |  |
| Net\tincome/(loss):\tBasic | $1.20 | $1.37 | $1.47 | $1.29 | $1.31 | $(0.17) | $1.61 | $1.61 |
| Diluted | 1.19 | 1.36 | 1.46 | 1.28 | 1.30 | (0.17) | 1.60 | 1.59 |
| Average\tshares:\tBasic | 3,730.9 | 3,755.4 | 3,780.6 | 3,787.2 | 3,762.1 | 3,767.0 | 3,782.4 | 3,818.2 |
| Diluted | 3,765.2 | 3,788.7 | 3,812.5 | 3,823.6 | 3,797.1 | 3,767.0 | 3,814.3 | 3,847.0 |
| Market\tand\tper\tcommon\tshare\tdata |  |  |  |  |  |  |  |  |
| Market\tcapitalization | $232,472 | $225,188 | $216,725 | $229,770 | $219,657 | $194,312 | $198,966 | $179,863 |
| Common\tshares\tat\tperiod-end | 3,714.8 | 3,738.2 | 3,761.3 | 3,784.7 | 3,756.1 | 3,759.2 | 3,769.0 | 3,789.8 |
| Share\tprice(a): |  |  |  |  |  |  |  |  |
| High | $63.49 | $61.85 | $61.29 | $61.48 | $58.55 | $56.93 | $55.90 | $51.00 |
| Low | 54.26 | 54.96 | 52.97 | 54.20 | 50.25 | 50.06 | 46.05 | 44.20 |
| Close | 62.58 | 60.24 | 57.62 | 60.71 | 58.48 | 51.69 | 52.79 | 47.46 |
| Book\tvalue\tper\tshare | 57.07 | 56.50 | 55.53 | 54.05 | 53.25 | 52.01 | 52.48 | 52.02 |
| Tangible\tbook\tvalue\tper\tshare\t("TBVPS")(b) | 44.69 | 44.13 | 43.17 | 41.73 | 40.81 | 39.51 | 39.97 | 39.54 |
| Cash\tdividends\tdeclared\tper\tshare | 0.40 | 0.40 | 0.40 | 0.38 | 0.38 | 0.38 | 0.38 | 0.30 |
| Selected\tratios\tand\tmetrics |  |  |  |  |  |  |  |  |
| Return\ton\tcommon\tequity\t("ROE") | 9% | 10% | 11% | 10% | 10% | (1)% | 13% | 13% |
| Return\ton\ttangible\tcommon\tequity\t("ROTCE")(b) | 11 | 13 | 14 | 13 | 14 | (2) | 17 | 17 |
| Return\ton\tassets\t("ROA") | 0.78 | 0.90 | 0.99 | 0.89 | 0.87 | (0.06) | 1.09 | 1.14 |
| Overhead\tratio | 68 | 65 | 63 | 64 | 67 | 102 | 63 | 61 |
| Loans-to-deposits\tratio | 56 | 56 | 57 | 57 | 57 | 57 | 60 | 61 |
| High\tquality\tliquid\tassets\t("HQLA")(in\tbillions)(c) | $600 | $572 | $576 | $538 | $522 | $538 | $454 | $413 |
| Common\tequity\ttier\t1\t("CET1")\tcapital\tratio(d) | 10.2% | 10.2% | 9.8% | 10.9% | 10.7% | 10.5\t% | 10.4% | 10.2% |
| Tier\t1\tcapital\tratio(d) | 11.6 | 11.5 | 11.1 | 12.1 | 11.9 | 11.7 | 11.6 | 11.6 |
| Total\tcapital\tratio(d) | 13.1 | 12.8 | 12.5 | 14.5 | 14.3 | 14.3 | 14.1 | 14.1 |
| Tier\t1\tleverage\tratio | 7.6 | 7.6 | 7.6 | 7.4 | 7.1 | 6.9 | 7.0 | 7.3 |
| Selected\tbalance\tsheet\tdata\t(period-end) |  |  |  |  |  |  |  |  |
| Trading\tassets | $398,988 | $410,657 | $392,543 | $375,204 | $374,664 | $383,348 | $401,470 | $430,991 |
| Securities(e) | 348,004 | 366,358 | 361,918 | 351,850 | 354,003 | 356,556 | 354,725 | 365,744 |
| Loans | 757,336 | 743,257 | 746,983 | 730,971 | 738,418 | 728,679 | 725,586 | 728,886 |
| Total\tassets | 2,573,126 | 2,527,005 | 2,520,336 | 2,476,986 | 2,415,689 | 2,463,309 | 2,439,494 | 2,389,349 |
| Deposits | 1,363,427 | 1,334,534 | 1,319,751 | 1,282,705 | 1,287,765 | 1,281,102 | 1,202,950 | 1,202,507 |
| Long-term\tdebt(f) | 276,836 | 268,721 | 269,929 | 274,512 | 267,889 | 263,372 | 266,212 | 268,361 |
| Common\tstockholders'\tequity | 212,002 | 211,214 | 208,851 | 204,572 | 200,020 | 195,512 | 197,781 | 197,128 |
| Total\tstockholders'\tequity | 232,065 | 231,277 | 227,314 | 219,655 | 211,178 | 206,670 | 209,239 | 207,086 |
| Headcount | 241,359 | 242,388 | 245,192 | 246,994 | 251,196 | 255,041 | 254,063 | 255,898 |
| JPMorgan\tChase\t&amp;\tCo./2014\tAnnual\tReport |  |  |  |  |  |  |  | 307 |

| As	of	or	for	the	period	ended |  | 2014 |  |  |  | 2013 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (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 | $14,807 | $15,526 | $15,974 | $16,485 | $16,969 | $18,248 | $20,137 | $21,496 |
| Allowance\tfor\tloan\tlosses\tto\ttotal\tretained\tloans | 1.90% | 2.02% | 2.08% | 2.20% | 2.25% | 2.43% | 2.69% | 2.88% |
| Allowance\tfor\tloan\tlosses\tto\tretained\tloans\texcluding\tpurchased\ncredit-impaired\tloans(g) | 1.55 | 1.63 | 1.69 | 1.75 | 1.80 | 1.89 | 2.06 | 2.27 |
| Nonperforming\tassets | $7,967 | $8,390 | $9,017 | $9,473 | $9,706 | $10,380 | $11,041 | $11,739 |
| Net\tcharge-offs | 1,218 | 1,114 | 1,158 | 1,269 | 1,328 | 1,346 | 1,403 | 1,725 |
| Net\tcharge-off\trate | 0.65% | 0.60% | 0.64% | 0.71% | 0.73% | 0.74% | 0.78% | 0.97% |

(c) HQLA	represents	the	Firm's	estimate	of	the	amount	of	assets	that	qualify	for	inclusion	in	the	liquidity	coverage	ratio	under	the	final	U.S.	rule	("U.S.	LCR")	as	of	December	31,	2014,	and	under the	Basel	III	liquidity	coverage	ratio	("Basel	III	LCR")	for	prior	periods.	For	additional	information,	see	HQLA	on	page	157.

(d) Basel	III	Transitional	rules	became	effective	on	January	1,	2014;	December	31,	2013	data	is	based	on	Basel	I	rules.	As	of	December	31,	2014,	September	30,	2014,	and	June	30,	2014,	the	ratios presented	are	calculated	under	the	Basel	III	Advanced	Transitional	Approach.	As	of	March	31,	2014,	the	ratios	presented	are	calculated	under	the	Basel	III	Standardized	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	Regulatory	capital	on	pages	146–153	for	additional	information	on	Basel	III	and	non-GAAP	financial	measures	of	regulatory	capital.

(g) Excludes	the	impact	of	residential	real	estate	PCI	loans.	For	further	discussion,	see	Allowance	for	credit	losses	on pages	128–130.

# Glossary	of	Terms

Active	foreclosures:	Loans	referred	to	foreclosure	where	formal	foreclosure proceedings	are	ongoing.	Includes	both	judicial	and	non-judicial	states.

Active	online	customers:	Users	of	all	internet	browsers	and	mobile	platforms who	have	logged	in	within	the	past	90	days.

Active	mobile	customers:	Users	of	all	mobile	platforms,	which	include:	SMS, mobile	smartphone	and	tablet,	who	have	logged	in	within	the	past	90	days.

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.

# 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.

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.

CUSIP	number:	A	CUSIP	(i.e.,	Committee	on	Uniform	Securities	Identification Procedures)	number	consists	of	nine	characters	(including	letters	and	numbers) that	uniquely	identify	a	company	or	issuer	and	the	type	of	security	and	is assigned	by	the	American	Bankers	Association	and	operated	by	Standard	& Poor's.	This	system	facilitates	the	clearing	and	settlement	process	of	securities.	A similar	system	is	used	to	identify	non-U.S.	securities	(CUSIP	International Numbering	System).

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.

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	comprise	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	and	a monthly	income	at	least	three	to	four	times	greater	than	their	monthly	housing expense	(mortgage	payments	plus	taxes	and	other	debt	payments).	These borrowers	provide	full	documentation	and	generally	have	reliable	payment histories.

# Subprime

Subprime	loans	are	loans	to	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.

Portfolio	activity:	Describes	changes	to	the	risk	profile	of	existing	lending- related	exposures	and	their	impact	on	the	allowance	for	credit	losses	from changes	in	customer	profiles	and	inputs	used	to	estimate	the	allowances.

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	revenues	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"):	Risk-weighted	assets	consist	of	on-	and	off- balance	sheet	assets	that	are	assigned	to	one	of	several	broad	risk	categories	and weighted	by	factors	representing	their	risk	and	potential	for	default.	On-balance sheet	assets	are	risk-weighted	based	on	the	perceived	credit	risk	associated	with the	obligor	or	counterparty,	the	nature	of	any	collateral,	and	the	guarantor,	if	any. Off-balance	sheet	assets	such	as	lending-related	commitments,	guarantees, derivatives	and	other	applicable	off-balance	sheet	positions	are	risk-weighted	by multiplying	the	contractual	amount	by	the	appropriate	credit	conversion	factor	to determine	the	on-balance	sheet	credit	equivalent	amount,	which	is	then	risk- weighted	based	on	the	same	factors	used	for	on-balance	sheet	assets.	Risk- weighted	assets	also	incorporate	a	measure	for	market	risk	related	to	applicable trading	assets-debt	and	equity	instruments,	and	foreign	exchange	and	commodity derivatives.	The	resulting	risk-weighted	values	for	each	of	the	risk	categories	are then	aggregated	to	determine	total	risk-weighted	assets.

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,	Chase Paymentech,	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.

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.

Trade-date	and	settlement-date:	For	financial	instruments,	the	trade-date	is	the date	that	an	order	to	purchase,	sell	or	otherwise	acquire	an	instrument	is	executed in	the	market.	The	trade-date	may	differ	from	the	settlement-date,	which	is	the date	on	which	the	actual	transfer	of	a	financial	instrument	between	two	parties	is executed.	The	amount	of	time	that	passes	between	the	trade-date	and	the settlement-date	differs	depending	on	the	financial	instrument.	For	repurchases under	the	common	equity	repurchase	program,	except	where	the	trade-date	is specified,	the	amounts	disclosed	are	presented	on	a	settlement-date	basis.	In	the Capital	Management	section	on	pages	146–155,	and	where	otherwise	specified, repurchases	under	the	common	equity	repurchase	program	are	presented	on	a trade-date	basis	because	the	trade-date	is	used	to	calculate	the	Firm's	regulatory capital.

# 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	enterprise	obligations:	Obligations	of	agencies originally	established	or	chartered	by	the	U.S.	government	to	serve	public purposes	as	specified	by	the	U.S.	Congress;	these	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	2012	through	2014.	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	2014,	2013	and	2012.	A	substantial	portion	of	JPMorgan	Chase's securities	are	taxable.

| (Table	continued	on	next	page) |  |  | 2014 |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Year\tended\tDecember\t31,\n(Taxable-equivalent\tinterest\tand\trates;\tin\tmillions,\texcept\trates) | Average\nbalance |  | Interest(e) |  | Average\nrate |  |
| Assets |  |  |  |  |  |  |
| Deposits\twith\tbanks | $358,072 |  | $1,157 |  | 0.32% |  |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements | 230,489 |  | 1,642 |  | 0.71 |  |
| Securities\tborrowed | 116,540 |  | (501) | (f) | (0.43) |  |
| Trading\tassets | 210,609 |  | 7,386 |  | 3.51 |  |
| Taxable\tsecurities | 318,970 |  | 7,617 |  | 2.39 |  |
| Non-taxable\tsecurities(a) | 34,359 |  | 2,158 |  | 6.28 |  |
| Total\tsecurities | 353,329 |  | 9,775 |  | 2.77 | (h) |
| Loans | 739,175 |  | 32,394 | (g) | 4.38 |  |
| Other\tassets(b) | 40,879 |  | 663 |  | 1.62 |  |
| Total\tinterest-earning\tassets | 2,049,093 |  | 52,516 |  | 2.56 |  |
| Allowance\tfor\tloan\tlosses | (15,418) |  |  |  |  |  |
| Cash\tand\tdue\tfrom\tbanks | 25,650 |  |  |  |  |  |
| Trading\tassets\t–\tequity\tinstruments | 116,650 |  |  |  |  |  |
| Trading\tassets\t–\tderivative\treceivables | 67,123 |  |  |  |  |  |
| Goodwill | 48,029 |  |  |  |  |  |
| Mortgage\tservicing\trights | 8,387 |  |  |  |  |  |
| Other\tintangible\tassets: |  |  |  |  |  |  |
| Purchased\tcredit\tcard\trelationships | 62 |  |  |  |  |  |
| Other\tintangibles | 1,316 |  |  |  |  |  |
| Other\tassets | 146,841 |  |  |  |  |  |
| Total\tassets | $2,447,733 |  |  |  |  |  |
| Liabilities |  |  |  |  |  |  |
| Interest-bearing\tdeposits | $868,838 |  | $1,633 |  | 0.19% |  |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements | 208,560 |  | 604 |  | 0.29 |  |
| Commercial\tpaper | 59,916 |  | 134 |  | 0.22 |  |
| (c)\nTrading\tliabilities\t–\tdebt,\tshort-term\tand\tother\tliabilities | 220,137 |  | 712 |  | 0.32 |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs | 48,017 |  | 405 |  | 0.84 |  |
| Long-term\tdebt | 270,269 |  | 4,409 |  | 1.63 |  |
| Total\tinterest-bearing\tliabilities | 1,675,737 |  | 7,897 |  | 0.47 |  |
| Noninterest-bearing\tdeposits | 395,463 |  |  |  |  |  |
| Trading\tliabilities\t–\tequity\tinstruments | 16,246 |  |  |  |  |  |
| Trading\tliabilities\t–\tderivative\tpayables | 54,758 |  |  |  |  |  |
| All\tother\tliabilities,\tincluding\tthe\tallowance\tfor\tlending-related\tcommitments | 81,111 |  |  |  |  |  |
| Total\tliabilities | 2,223,315 |  |  |  |  |  |
| Stockholders'\tequity |  |  |  |  |  |  |
| Preferred\tstock | 17,018 |  |  |  |  |  |
| Common\tstockholders'\tequity | 207,400 |  |  |  |  |  |
| Total\tstockholders'\tequity | 224,418 | (d) |  |  |  |  |
| Total\tliabilities\tand\tstockholders'\tequity | $2,447,733 |  |  |  |  |  |
| Interest\trate\tspread |  |  |  |  | 2.09% |  |
| Net\tinterest\tincome\tand\tnet\tyield\ton\tinterest-earning\tassets |  |  | $44,619 |  | 2.18 |  |

(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,	2014,	2013	and	2012,	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	2.82%	in	2014,	2.37%	in	2013,	and	2.35%	in	2012,	and	does	not	give	effect	to	changes	in	fair	value	that	are	reflected	in	accumulated	other	comprehensive income/(loss).

(i) Prior	period	amounts	and	have	been	reclassified	to	conform	with	the	current	period presentation.

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 |  | 2013<br>Interest(e) |  | Average<br>rate |  | Average<br>balance |  | 2012<br>Interest(e) |  | Average<br>rate |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $268,968 |  | $918 |  | 0.34% |  | $118,463 |  | $555 |  | 0.47% |  |
| 231,567 |  | 1,940 |  | 0.84 |  | 239,703 |  | 2,442 |  | 1.02 |  |
| 118,300 |  | (127) | (f) | (0.11) |  | 131,446 |  | (3) | (f) | — |  |
| 227,769 |  | 8,191 | (i) | 3.60 | (i) | 234,224 |  | 9,175 | (i) | 3.92 | (i) |
| 333,285 |  | 6,916 |  | 2.07 |  | 345,238 |  | 7,231 |  | 2.09 |  |
| 23,558 |  | 1,369 |  | 5.81 |  | 17,992 |  | 1,091 |  | 6.06 |  |
| 356,843 |  | 8,285 |  | 2.32 | (h) | 363,230 |  | 8,322 |  | 2.29 | (h) |
| 726,450 |  | 33,621 | (g) | 4.63 |  | 722,384 |  | 35,946 | (g) | 4.98 |  |
| 40,334 |  | 538 |  | 1.33 |  | 32,967 |  | 259 |  | 0.79 |  |
| 1,970,231 |  | 53,366 | (i) | 2.71 | (i) | 1,842,417 |  | 56,696 | (i) | 3.08 | (i) |
| (19,819) |  |  |  |  |  | (24,906) |  |  |  |  |  |
| 35,919 |  |  |  |  |  | 51,410 |  |  |  |  |  |
| 112,680 |  |  |  |  |  | 115,113 |  |  |  |  |  |
| 72,629 |  |  |  |  |  | 85,744 |  |  |  |  |  |
| 48,102 |  |  |  |  |  | 48,176 |  |  |  |  |  |
| 8,840 |  |  |  |  |  | 7,133 |  |  |  |  |  |
| 214 |  |  |  |  |  | 470 |  |  |  |  |  |
| 1,736 |  |  |  |  |  | 2,363 |  |  |  |  |  |
| 149,572 |  |  |  |  |  | 144,061 |  |  |  |  |  |
| $2,380,104 |  |  |  |  |  | $2,271,981 |  |  |  |  |  |
| $822,781 |  | $2,067 |  | 0.25% |  | $751,098 |  | $2,655 |  | 0.35% |  |
| 238,551 |  | 582 |  | 0.24 |  | 248,561 |  | 535 |  | 0.22 |  |
| 53,717 |  | 112 |  | 0.21 |  | 50,780 |  | 91 |  | 0.18 |  |
| 202,894 |  | 1,104 | (i) | 0.54 | (i) | 193,459 |  | 1,052 | (i) | 0.54 | (i) |
| 54,832 |  | 478 |  | 0.87 |  | 60,234 |  | 648 |  | 1.08 |  |
| 264,083 |  | 5,007 |  | 1.90 |  | 245,662 |  | 6,062 |  | 2.47 |  |
| 1,636,858 |  | 9,350 | (i) | 0.57 | (i) | 1,549,794 |  | 11,043 | (i) | 0.71 | (i) |
| 366,361 |  |  |  |  |  | 354,785 |  |  |  |  |  |
| 14,218 |  |  |  |  |  | 14,172 |  |  |  |  |  |
| 64,553 |  |  |  |  |  | 76,162 |  |  |  |  |  |
| 90,745 |  |  |  |  |  | 84,480 |  |  |  |  |  |
| 2,172,735 |  |  |  |  |  | 2,079,393 |  |  |  |  |  |
| 10,960 |  |  |  |  |  | 8,236 |  |  |  |  |  |
| 196,409 |  |  |  |  |  | 184,352 |  |  |  |  |  |
| 207,369 | (d) |  |  |  |  | 192,588 | (d) |  |  |  |  |
| $2,380,104 |  |  |  |  |  | $2,271,981 |  |  |  |  |  |
|  |  |  |  | 2.14% |  |  |  |  |  | 2.37% |  |
|  |  | $44,016 |  | 2.23 |  |  |  | $45,653 |  | 2.48 |  |

# 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	2012	through 2014.	The	segregation	of	U.S.	and	non-U.S.	components	is	based	on

the	location	of	the	office	recording	the	transaction.	Intracompany	funding generally	comprises	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. | $328,145 | $825 |  | 0.25% |  |
| Non-U.S. | 29,927 | 332 |  | 1.11 |  |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\tresale\tagreements: |  |  |  |  |  |
| U.S. | 125,812 | 719 |  | 0.57 |  |
| Non-U.S. | 104,677 | 923 |  | 0.88 |  |
| Securities\tborrowed: |  |  |  |  |  |
| U.S. | 77,228 | (573) | (b) | (0.74) |  |
| Non-U.S. | 39,312 | 72 |  | 0.18 |  |
| Trading\tassets\t–\tdebt\tinstruments: |  |  |  |  |  |
| U.S. | 109,678 | 4,045 |  | 3.69 |  |
| Non-U.S. | 100,931 | 3,341 |  | 3.31 |  |
| Securities: |  |  |  |  |  |
| U.S. | 193,856 | 6,586 |  | 3.40 |  |
| Non-U.S. | 159,473 | 3,189 |  | 2.00 |  |
| Loans: |  |  |  |  |  |
| U.S. | 635,846 | 30,165 |  | 4.74 |  |
| Non-U.S. | 103,329 | 2,229 |  | 2.16 |  |
| Other\tassets,\tpredominantly\tU.S. | 40,879 | 663 |  | 1.62 |  |
| Total\tinterest-earning\tassets | 2,049,093 | 52,516 |  | 2.56 |  |
| Interest-bearing\tliabilities |  |  |  |  |  |
| Interest-bearing\tdeposits: |  |  |  |  |  |
| U.S. | 620,708 | 813 |  | 0.13 |  |
| Non-U.S. | 248,130 | 820 |  | 0.33 |  |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements: |  |  |  |  |  |
| U.S. | 146,025 | 130 | (c) | 0.09 | (c) |
| Non-U.S. | 62,535 | 474 |  | 0.76 |  |
| Trading\tliabilities\t-\tdebt,\tshort-term\tand\tother\tliabilities: |  |  |  |  |  |
| U.S. | 194,771 | (284) | (b) | (0.15) |  |
| Non-U.S. | 85,282 | 1,130 |  | 1.33 |  |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs,\tpredominantly\tU.S. | 48,017 | 405 |  | 0.84 |  |
| Long-term\tdebt: |  |  |  |  |  |
| U.S. | 257,181 | 4,366 |  | 1.70 |  |
| Non-U.S. | 13,088 | 43 |  | 0.33 |  |
| Intracompany\tfunding: |  |  |  |  |  |
| U.S. | (122,467) | (176) |  | — |  |
| Non-U.S. | 122,467 | 176 |  | — |  |
| Total\tinterest-bearing\tliabilities | 1,675,737 | 7,897 |  | 0.47 |  |
| Noninterest-bearing\tliabilities(a) | 373,356 |  |  |  |  |
| Total\tinvestable\tfunds | $2,049,093 | $7,897 |  | 0.39% |  |
| Net\tinterest\tincome\tand\tnet\tyield: |  | $44,619 |  | 2.18% |  |
| U.S. |  | 37,018 |  | 2.46 |  |
| Non-U.S. |  | 7,601 |  | 1.39 |  |
| Percentage\tof\ttotal\tassets\tand\tliabilities\tattributable\tto\tnon-U.S.\toperations: |  |  |  |  |  |
| Assets |  |  |  | 28.9 |  |
| Liabilities |  |  |  | 22.6 |  |

(a) Represents	the	amount	of	noninterest-bearing	liabilities	funding	interest-earning	assets.

(b) Negative	interest	income	and	yield,	for	the	years	ended	December	31,	2014,	2013	and	2012	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.

(d) Prior	period	amounts	have	been	reclassified	to	conform	with	the	current	period	presentation.

For	further	information,	see	the	"Net	interest	income"	discussion	in	Consolidated Results	of	Operations	on	pages	68–71.

| Average	balance | 2013<br>Interest |  |  | Average	rate |  | Average	balance | 2012<br>Interest |  |  | Average	rate |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| $233,850 | $572 |  |  | 0.24% |  | $79,992 | $168 |  |  | 0.21% |  |
| 35,118 | 346 |  |  | 0.99 |  | 38,471 | 387 |  |  | 1.01 |  |
| 129,600 | 793 |  |  | 0.61 |  | 137,874 | 872 |  |  | 0.63 |  |
| 101,967 | 1,147 |  |  | 1.13 |  | 101,829 | 1,570 |  |  | 1.54 |  |
| 69,377 | (376) | (b) |  | (0.54) |  | 70,084 | (407) | (b) |  | (0.58) |  |
| 48,923 | 249 |  |  | 0.51 |  | 61,362 | 404 |  |  | 0.66 |  |
| 120,985 | 4,301 | (d) |  | 3.56 | (d) | 119,854 | 4,562 | (d) |  | 3.81 | (d) |
| 106,784 | 3,890 | (d) |  | 3.64 | (d) | 114,370 | 4,613 | (d) |  | 4.03 | (d) |
| 170,473 | 4,795 |  |  | 2.81 |  | 161,727 | 3,991 |  |  | 2.47 |  |
| 186,370 | 3,490 |  |  | 1.87 |  | 201,503 | 4,331 |  |  | 2.15 |  |
| 617,043 | 31,235 |  |  | 5.06 |  | 620,615 | 33,167 |  |  | 5.34 |  |
| 109,407 | 2,386 |  |  | 2.18 |  | 101,769 | 2,779 |  |  | 2.73 |  |
| 40,334 | 538 |  |  | 1.33 |  | 32,967 | 259 |  |  | 0.79 |  |
| 1,970,231 | 53,366 | (d) |  | 2.71 | (d) | 1,842,417 | 56,696 | (d) |  | 3.08 | (d) |
| 582,282 | 1,067 |  |  | 0.18 |  | 512,589 | 1,345 |  |  | 0.26 |  |
| 240,499 | 1,000 |  |  | 0.42 |  | 238,509 | 1,310 |  |  | 0.55 |  |
| 161,256 | 103 | (c) |  | 0.06 | (c) | 181,460 | 4 | (c) |  | — | (c) |
| 77,295 | 479 |  |  | 0.62 |  | 67,101 | 531 |  |  | 0.79 |  |
| 176,870 | 5 |  | (b)(d) | — | (d) | 176,755 | (150) |  | (b)(d) | (0.08) | (d) |
| 79,741 | 1,211 |  | (d) | 1.52 | (d) | 67,484 | 1,293 | (d) |  | 1.92 | (d) |
| 54,832 | 478 |  |  | 0.87 |  | 60,234 | 648 |  |  | 1.08 |  |
| 250,957 | 4,949 |  |  | 1.97 |  | 230,101 | 5,998 |  |  | 2.61 |  |
| 13,126 | 58 |  |  | 0.45 |  | 15,561 | 64 |  |  | 0.41 |  |
| (181,109) | (339) |  |  | — |  | (253,906) | (551) |  |  | — |  |
| 181,109 | 339 |  |  | — |  | 253,906 | 551 |  |  | — |  |
| 1,636,858 | 9,350 |  | (d) | 0.57 | (d) | 1,549,794 | 11,043 | (d) |  | 0.71 | (d) |
| 333,373 |  |  |  |  |  | 292,623 |  |  |  |  |  |
| $1,970,231 | $9,350 |  | (d) | 0.47% | (d) | $1,842,417 | $11,043 | (d) |  | 0.60% | (d) |
|  | 44,016 |  |  | 2.23% |  |  | 45,653 |  |  | 2.48% |  |
|  | 35,492 |  |  | 2.59 |  |  | 35,353 |  |  | 2.91 |  |
|  | 8,524 |  |  | 1.42 |  |  | 10,300 |  |  | 1.65 |  |
|  |  |  |  | 32.6 |  |  |  |  |  | 36.2 |  |
|  |  |  |  | 23.5 |  |  |  |  |  | 23.4 |  |

# 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	2014	versus	2013	and	2013	versus	2012.	In	this analysis,	when	the	change	cannot	be	isolated	to	either	volume	or	rate,	it	has	been	allocated	to	volume.

|  | 2014	versus	2013 | 2014	versus	2013 |  | 2013	versus	2012 | 2013	versus	2012 |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Increase/(decrease)\tdue\tto\tchange\tin: | Increase/(decrease)\tdue\tto\tchange\tin: |  | Increase/(decrease)\tdue\tto\tchange\tin: |  |  |  |  |
| 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. | $230 | $23 | $253 | $380 | $24 |  | $404 |  |
| Non-U.S. | (56) | 42 | (14) | (33) | (8) |  | (41) |  |
| Federal\tfunds\tsold\tand\tsecurities\tpurchased\tunder\nresale\tagreements: |  |  |  |  |  |  |  |  |
| U.S. | (22) | (52) | (74) | (51) | (28) |  | (79) |  |
| Non-U.S. | 31 | (255) | (224) | (6) | (417) |  | (423) |  |
| Securities\tborrowed: |  |  |  |  |  |  |  |  |
| U.S. | (58) | (139) | (197) | 3 | 28 |  | 31 |  |
| Non-U.S. | (16) | (161) | (177) | (63) | (92) |  | (155) |  |
| Trading\tassets\t–\tdebt\tinstruments: |  |  |  |  |  |  |  |  |
| U.S. | (413) | 157 | (256) | (a)\n34 | (295) | (a) | (261) | (a) |
| Non-U.S. | (197) | (352) | (549) | (a)\n(273) | (450) | (a) | (723) | (a) |
| Securities: |  |  |  |  |  |  |  |  |
| U.S. | 785 | 1,006 | 1,791 | 254 | 550 |  | 804 |  |
| Non-U.S. | (543) | 242 | (301) | (277) | (564) |  | (841) |  |
| Loans: |  |  |  |  |  |  |  |  |
| U.S. | 905 | (1,975) | (1,070) | (194) | (1,738) |  | (1,932) |  |
| Non-U.S. | (135) | (22) | (157) | 167 | (560) |  | (393) |  |
| Other\tassets,\tpredominantly\tU.S. | 8 | 117 | 125 | 101 | 178 |  | 279 |  |
| Change\tin\tinterest\tincome | 519 | (1,369) | (850) | (a)\n42 | (3,372) | (a) | (3,330) | (a) |
| Interest-bearing\tliabilities |  |  |  |  |  |  |  |  |
| Interest-bearing\tdeposits: |  |  |  |  |  |  |  |  |
| U.S. | 37 | (291) | (254) | 132 | (410) |  | (278) |  |
| Non-U.S. | 36 | (216) | (180) | — | (310) |  | (310) |  |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\nunder\trepurchase\tagreements: |  |  |  |  |  |  |  |  |
| U.S. | (21) | 48 | 27 | (10) | 109 |  | 99 |  |
| Non-U.S. | (113) | 108 | (5) | 62 | (114) |  | (52) |  |
| Trading\tliabilities\t-\tdebt,\tshort-term\tand\tother\nliabilities |  |  |  |  |  |  |  |  |
| U.S. | (27) | (262) | (289) | (a)\n(5) | 160 | (a) | 155 | (a) |
| Non-U.S. | 71 | (152) | (81) | (a)\n185 | (267) | (a) | (82) | (a) |
| Beneficial\tinterests\tissued\tby\tconsolidated\tVIEs,\npredominantly\tU.S. | (57) | (16) | (73) | (44) | (126) |  | (170) |  |
| Long-term\tdebt: |  |  |  |  |  |  |  |  |
| U.S. | 95 | (678) | (583) | 424 | (1,473) |  | (1,049) |  |
| Non-U.S. | 1 | (16) | (15) | (12) | 6 |  | (6) |  |
| Intercompany\tfunding: |  |  |  |  |  |  |  |  |
| U.S. | 72 | 91 | 163 | 136 | 76 |  | 212 |  |
| Non-U.S. | (72) | (91) | (163) | (136) | (76) |  | (212) |  |
| Change\tin\tinterest\texpense | 22 | (1,475) | (1,453) | (a)\n732 | (2,425) | (a) | (1,693) | (a) |
| Change\tin\tnet\tinterest\tincome | $497 | $106 | $603 | (a)\n$(690) | $(947) | (a) | $(1,637) |  |

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

# Securities	portfolio

For	information	regarding	the	securities	portfolio	as	of	December	31,	2014	and	2013,	and	for	the	years	ended	December	31,	2014	and	2013,	see	Note	12.	For	the available–for–sale	securities	portfolio,	at	December	31,	2012,	the	fair	value	and	amortized	cost	of	U.S.	Treasury	and	government	agency	obligations	was	$110.5	billion and	$105.7	billion,	respectively;	the	fair	value	and	amortized	cost	of	all	other	available–for–sale	securities	was	$260.6	billion	and	$254.2	billion,	respectively;	and	the	total fair	value	and	amortized	cost	of	the	total	available–for–sale	securities	portfolio	was	$371.1	billion	and	$359.9	billion	respectively.

At	December	31,	2012,	the	fair	value	and	amortized	cost	of	U.S.	Treasury	and	government	agency	obligations	in	the	held-to-maturity	securities	portfolio	was	$8	million and	$7	million,	respectively.	There	were	no	other	held-to-maturity	securities	at	December	31,	2012.

The	table	below	presents	loans	by	portfolio	segment	and	loan	class	that	are	presented	in	Credit	Risk	Management	on	page	112,	pages	113–119	and	page	120,	and	in	Note 14,	at	the	periods	indicated.

| December	31,	(in	millions) | 2014 | 2013 | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| U.S.\tconsumer,\texcluding\tcredit\tcard\tloans |  |  |  |  |  |
| Home\tequity | $69,837 | $76,790 | $88,356 | $100,497 | $112,844 |
| Mortgage | 139,973 | 129,008 | 123,277 | 128,709 | 134,284 |
| Auto | 54,536 | 52,757 | 49,913 | 47,426 | 48,367 |
| Other | 31,028 | 30,508 | 31,074 | 31,795 | 32,123 |
| Total\tU.S.\tconsumer,\texcluding\tcredit\tcard\tloans | 295,374 | 289,063 | 292,620 | 308,427 | 327,618 |
| Credit\tcard\tLoans |  |  |  |  |  |
| U.S.\tcredit\tcard\tloans | 129,067 | 125,308 | 125,277 | 129,587 | 134,781 |
| Non-U.S.\tcredit\tcard\tloans | 1,981 | 2,483 | 2,716 | 2,690 | 2,895 |
| Total\tcredit\tcard\tloans | 131,048 | 127,791 | 127,993 | 132,277 | 137,676 |
| Total\tconsumer\tloans | 426,422 | 416,854 | 420,613 | 440,704 | 465,294 |
| U.S.\twholesale\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | 78,664 | 79,436 | 77,900 | 65,958 | 50,912 |
| Real\testate | 77,022 | 67,815 | 59,369 | 53,230 | 51,734 |
| Financial\tinstitutions | 13,735 | 11,087 | 10,708 | 8,489 | 12,120 |
| Government\tagencies | 7,574 | 8,316 | 7,962 | 7,236 | 6,408 |
| Other | 49,846 | 48,158 | 50,948 | 52,126 | 38,298 |
| Total\tU.S.\twholesale\tloans | 226,841 | 214,812 | 206,887 | 187,039 | 159,472 |
| Non-U.S.\twholesale\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | 34,782 | 36,447 | 36,674 | 31,108 | 19,053 |
| Real\testate | 2,224 | 1,621 | 1,757 | 1,748 | 1,973 |
| Financial\tinstitutions | 21,099 | 22,813 | 26,564 | 30,262 | 20,043 |
| Government\tagencies | 1,122 | 2,146 | 1,586 | 583 | 870 |
| Other | 44,846 | 43,725 | 39,715 | 32,276 | 26,222 |
| Total\tnon-U.S.\twholesale\tloans | 104,073 | 106,752 | 106,296 | 95,977 | 68,161 |
| Total\twholesale\tloans |  |  |  |  |  |
| Commercial\tand\tindustrial | 113,446 | 115,883 | 114,574 | 97,066 | 69,965 |
| Real\testate | 79,246 | 69,436 | 61,126 | 54,978 | 53,707 |
| Financial\tinstitutions | 34,834 | 33,900 | 37,272 | 38,751 | 32,163 |
| Government\tagencies | 8,696 | 10,462 | 9,548 | 7,819 | 7,278 |
| Other | 94,692 | 91,883 | 90,663 | 84,402 | 64,520 |
| Total\twholesale\tloans | 330,914 | 321,564 | 313,183 | 283,016 | 227,633 |
| Total\tloans(a) | $757,336 | $738,418 | $733,796 | $723,720 | $692,927 |
| Memo: |  |  |  |  |  |
| Loans\theld-for-sale | $7,217 | $12,230 | $4,406 | $2,626 | $5,453 |
| Loans\tat\tfair\tvalue | 2,611 | 2,011 | 2,555 | 2,097 | 1,976 |
| Total\tloans\theld-for-sale\tand\tloans\tat\tfair\tvalue | $9,828 | $14,241 | $6,961 | $4,723 | $7,429 |

(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	of	$1.3	billion,	$1.9	billion,	$2.5	billion,	$2.7	billion	and	$1.9	billion	at	December	31,	2014,	2013,	2012,	2011	and	2010,	respectively.

# Maturities	and	sensitivity	to	changes	in	interest	rates

The	table	below	sets	forth,	at	December	31,	2014,	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	120–127	and	Note	14.	The	table	does	not	include the	impact	of	derivative	instruments.

| December	31,	2014	(in	millions) | Within<br>1	year	(a) | 1-5<br>years | After	5<br>years | Total |
| :--- | :--- | :--- | :--- | :--- |
| U.S. |  |  |  |  |
| Commercial\tand\tindustrial | $13,106 | $52,053 | $13,505 | $78,664 |
| Real\testate | 5,238 | 18,523 | 53,261 | 77,022 |
| Financial\tinstitutions | 7,015 | 6,229 | 491 | 13,735 |
| Government\tagencies | 970 | 2,411 | 4,193 | 7,574 |
| Other | 20,897 | 27,272 | 1,677 | 49,846 |
| Total\tU.S. | 47,226 | 106,488 | 73,127 | 226,841 |
| Non-U.S. |  |  |  |  |
| Commercial\tand\tindustrial | 12,329 | 16,644 | 5,809 | 34,782 |
| Real\testate | 781 | 1,324 | 119 | 2,224 |
| Financial\tinstitutions | 16,805 | 3,947 | 347 | 21,099 |
| Government\tagencies | 29 | 320 | 773 | 1,122 |
| Other | 35,571 | 8,707 | 568 | 44,846 |
| Total\tnon-U.S. | 65,515 | 30,942 | 7,616 | 104,073 |
| Total\twholesale\tloans | $112,741 | $137,430 | $80,743 | $330,914 |
| Loans\tat\tfixed\tinterest\trates |  | $10,387 | $54,847 |  |
| Loans\tat\tvariable\tinterest\trates |  | 127,043 | 25,896 |  |
| Total\twholesale\tloans |  | $137,430 | $80,743 |  |

(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	112,	pages	113–114	and	page	120,	at	the	periods	indicated.

| December	31,	(in	millions) | 2014 | 2013 | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Nonperforming\tassets |  |  |  |  |  |
| U.S.\tnonaccrual\tloans: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | $6,509 | $7,496 | $9,174 | $7,411 | $8,833 |
| Credit\tcard\tloans | — | — | 1 | 1 | 2 |
| Total\tU.S.\tnonaccrual\tconsumer\tloans | 6,509 | 7,496 | 9,175 | 7,412 | 8,835 |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 184 | 317 | 702 | 936 | 1,745 |
| Real\testate | 237 | 338 | 520 | 886 | 2,390 |
| Financial\tinstitutions | 12 | 19 | 60 | 76 | 111 |
| Government\tagencies | — | 1 | — | — | — |
| Other | 59 | 97 | 153 | 234 | 267 |
| Total\tU.S.\twholesale\tnonaccrual\tloans | 492 | 772 | 1,435 | 2,132 | 4,513 |
| Total\tU.S.\tnonaccrual\tloans | 7,001 | 8,268 | 10,610 | 9,544 | 13,348 |
| Non-U.S.\tnonaccrual\tloans: |  |  |  |  |  |
| Consumer,\texcluding\tcredit\tcard\tloans | — | — | — | — | — |
| Credit\tcard\tloans | — | — | — | — | — |
| Total\tnon-U.S.\tnonaccrual\tconsumer\tloans | — | — | — | — | — |
| Wholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 21 | 116 | 131 | 79 | 234 |
| Real\testate | 23 | 88 | 89 | — | 585 |
| Financial\tinstitutions | 7 | 8 | — | — | 30 |
| Government\tagencies | — | — | 5 | 16 | 22 |
| Other | 81 | 60 | 57 | 354 | 622 |
| Total\tnon-U.S.\twholesale\tnonaccrual\tloans | 132 | 272 | 282 | 449 | 1,493 |
| Total\tnon-U.S.\tnonaccrual\tloans | 132 | 272 | 282 | 449 | 1,493 |
| Total\tnonaccrual\tloans | 7,133 | 8,540 | 10,892 | 9,993 | 14,841 |
| Derivative\treceivables | 275 | 415 | 239 | 297 | 159 |
| Assets\tacquired\tin\tloan\tsatisfactions | 559 | 751 | 775 | 1,025 | 1,682 |
| Nonperforming\tassets | $7,967 | $9,706 | $11,906 | $11,315 | $16,682 |
| Memo: |  |  |  |  |  |
| Loans\theld-for-sale | $95 | $26 | $18 | $110 | $341 |
| Loans\tat\tfair\tvalue(a) | 21 | 197 | 265 | 73 | 155 |
| Total\tloans\theld-for-sale\tand\tloans\tat\tfair\tvalue | $116 | $223 | $283 | $183 | $496 |

(a) In	2013	certain	loans	that	resulted	from	restructurings	that	were	previously	classified	as	performing	were	reclassified	as	nonperforming	loans.	Prior	periods	were	revised	to	conform	with	the	current presentation.

(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	110–111,	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	2012	through	2014	was	primarily	driven	by	the	change	in	the	levels	of	nonaccrual	loans.

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Nonaccrual\tloans |  |  |  |
| U.S.: |  |  |  |
| Consumer,\texcluding\tcredit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | $563 | $719 | $804 |
| Interest\tthat\twas\trecognized\tin\tincome | (268) | (298) | (302) |
| Total\tU.S.\tconsumer,\texcluding\tcredit\tcard | 295 | 421 | 502 |
| 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 | 295 | 421 | 502 |
| Wholesale: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | 28 | 29 | 54 |
| Interest\tthat\twas\trecognized\tin\tincome | (9) | (9) | (4) |
| Total\tU.S.\twholesale | 19 | 20 | 50 |
| Negative\timpact\t-\tU.S. | 314 | 441 | 552 |
| 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:\t(a) |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | 7 | 36 | 14 |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | — |
| Total\tnon-U.S.\twholesale | 7 | 36 | 14 |
| Negative\timpact\t—\tnon-U.S. | 7 | 36 | 14 |
| Total\tnegative\timpact\ton\tinterest\tincome | $321 | $477 | $566 |

(a) During	2013,	certain	loans	that	resulted	from	restructurings	that	were	previously	classified	as	performing	were	reclassified	as	nonperforming	loans.	The	gross	amount	of	interest	that	would	have been	recorded	at	the	original	terms	has	been	adjusted	accordingly.	Prior	periods	were	revised	to	conform	with	the	current	presentation.

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Accruing\trestructured\tloans |  |  |  |
| U.S.: |  |  |  |
| Consumer,\texcluding\tcredit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | $629 | $758 | $729 |
| Interest\tthat\twas\trecognized\tin\tincome | (339) | (395) | (417) |
| Total\tU.S.\tconsumer,\texcluding\tcredit\tcard | 290 | 363 | 312 |
| Credit\tcard: |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | 377 | 602 | 805 |
| Interest\tthat\twas\trecognized\tin\tincome | (123) | (198) | (308) |
| Total\tU.S.\tcredit\tcard | 254 | 404 | 497 |
| Total\tU.S.\tconsumer | 544 | 767 | 809 |
| Wholesale:(a) |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | 1 | 1 |
| Interest\tthat\twas\trecognized\tin\tincome | — | (1) | (2) |
| Total\tU.S.\twholesale | — | — | (1) |
| Negative\timpact\t—\tU.S. | 544 | 767 | 808 |
| 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:(a) |  |  |  |
| Gross\tamount\tof\tinterest\tthat\twould\thave\tbeen\trecorded\tat\tthe\toriginal\tterms | — | — | 1 |
| Interest\tthat\twas\trecognized\tin\tincome | — | — | (1) |
| Total\tnon-U.S.\twholesale | — | — | — |
| Negative\timpact\t—\tnon-U.S. | — | — | — |
| Total\tnegative\timpact\ton\tinterest\tincome | $544 | $767 | $808 |

(a) Predominantly	real	estate-related.

# 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	137–138.

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)(b)

| (in	millions) | December	31, | Governments | Banks | Other(c) | Net	local<br>country<br>assets | Total	cross-border<br>outstandings(d) | Commitments(e) | Total	exposure |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Cayman\tIslands | 2014 | $2 | $199 | $67,810 | $115 | $68,126 | $25,886 | $94,012 |
|  | 2013 | 9 | 232 | 70,006 | — | 70,247 | 21,928 | 92,175 |
|  | 2012 | 234 | 35 | 68,588 | — | 68,857 | 2,645 | 71,502 |
| France | 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 |
|  | 2012 | 10,706 | 18,979 | 26,796 | 1,714 | 58,195 | 91,632 | 149,827 |
| Japan | 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 |
|  | 2012 | 2,016 | 30,616 | 7,708 | 23,680 | 64,020 | 57,023 | 121,043 |
| Germany | 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 |
|  | 2012 | 11,376 | 21,944 | 11,674 | 321 | 45,315 | 92,597 | 137,912 |
| Netherlands | 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 |
|  | 2012 | 48 | 5,947 | 36,625 | — | 42,620 | 41,481 | 84,101 |
| Italy | 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 |
|  | 2012 | 9,939 | 3,703 | 2,786 | 1,254 | 17,682 | 73,190 | 90,872 |
| Brazil | 2014 | $2,650 | $2,874 | $5,258 | $7,804 | $18,586 | $10,644 | $29,230 |
|  | 2013 | 2,332 | 3,521 | 4,899 | 4,384 | 15,136 | 10,148 | 25,284 |
|  | 2012 | 4,951 | 4,373 | 6,456 | 9,463 | 25,243 | 8,841 | 34,084 |
| Ireland | 2014 | $131 | $4,007 | $13,613 | $— | $17,751 | $12,734 | $30,485 |
|  | 2013 | 99 | 4,175 | 13,878 | — | 18,152 | 11,709 | 29,861 |
|  | 2012 | 97 | 2,818 | 12,598 | — | 15,513 | 8,912 | 24,425 |
| Spain | 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 |
|  | 2012 | 1,204 | 8,458 | 6,643 | 129 | 16,434 | 46,299 | 62,733 |
| Switzerland | 2014 | $28 | $1,417 | $3,291 | $660 | $5,396 | $71,900 | $77,296 |
|  | 2013 | 73 | 1,419 | 4,657 | 11,587 | 17,736 | 88,530 | 106,266 |
|  | 2012 | 103 | 4,196 | 3,638 | 13,874 | 21,811 | 32,408 | 54,219 |

(a) Prior	periods	were	revised	to	conform	with	the	current	presentation.

(b) Excluded	from	the	table	is	$915.5	billion	at	December	31,	2012,	substantially	all	of	which	represent	notional	amounts	related	to	credit	protection	sold	on	indices	representing	baskets	of	exposures from	multiple	European	countries,	which	had	previously	been	reported	within	the	U.K.	Effective	with	the	fourth	quarter	of	2013,	these	exposures	are	reported	within	individual	countries	as required	by	revised	regulatory	guidance.

(c) Consists	primarily	of	commercial	and	industrial.

(d) Outstandings	includes	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.

(e) 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	128–130,	and	Note	15.

| Year	ended	December	31,	(in	millions) | 2014 | 2013 | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tbeginning\tof\tyear | $16,264 | $21,936 | $27,609 | $32,266 | $31,602 |
| U.S.\tcharge-offs |  |  |  |  |  |
| U.S.\tconsumer,\texcluding\tcredit\tcard | 2,132 | 2,754 | 4,805 | 5,419 | 8,383 |
| U.S.\tcredit\tcard | 3,682 | 4,358 | 5,624 | 8,017 | 15,247 |
| Total\tU.S.\tconsumer\tcharge-offs | 5,814 | 7,112 | 10,429 | 13,436 | 23,630 |
| U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 44 | 150 | 131 | 197 | 467 |
| Real\testate | 14 | 51 | 114 | 221 | 698 |
| Financial\tinstitutions | 14 | 1 | 8 | 102 | 146 |
| Government\tagencies | 25 | 1 | — | — | 3 |
| Other | 22 | 9 | 56 | 149 | 102 |
| Total\tU.S.\twholesale\tcharge-offs | 119 | 212 | 309 | 669 | 1,416 |
| Total\tU.S.\tcharge-offs | 5,933 | 7,324 | 10,738 | 14,105 | 25,046 |
| Non-U.S.\tcharge-offs |  |  |  |  |  |
| Non-U.S.\tconsumer,\texcluding\tcredit\tcard | — | — | — | — | — |
| Non-U.S.\tcredit\tcard | 149 | 114 | 131 | 151 | 163 |
| Total\tnon-U.S.\tconsumer\tcharge-offs | 149 | 114 | 131 | 151 | 163 |
| Non-U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | 27 | 5 | 8 | 1 | 23 |
| Real\testate | 4 | 11 | 6 | 142 | 239 |
| Financial\tinstitutions | — | — | — | 6 | — |
| Government\tagencies | — | — | 4 | — | — |
| Other | 1 | 13 | 19 | 98 | 311 |
| Total\tnon-U.S.\twholesale\tcharge-offs | 32 | 29 | 37 | 247 | 573 |
| Total\tnon-U.S.\tcharge-offs | 181 | 143 | 168 | 398 | 736 |
| Total\tcharge-offs | 6,114 | 7,467 | 10,906 | 14,503 | 25,782 |
| U.S.\trecoveries |  |  |  |  |  |
| U.S.\tconsumer,\texcluding\tcredit\tcard | (814) | (847) | (508) | (547) | (474) |
| U.S.\tcredit\tcard | (383) | (568) | (782) | (1,211) | (1,345) |
| Total\tU.S.\tconsumer\trecoveries | (1,197) | (1,415) | (1,290) | (1,758) | (1,819) |
| U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | (49) | (27) | (335) | (60) | (86) |
| Real\testate | (27) | (56) | (64) | (93) | (75) |
| Financial\tinstitutions | (12) | (90) | (37) | (207) | (74) |
| Government\tagencies | — | — | (2) | — | (1) |
| Other | (36) | (6) | (21) | (36) | (25) |
| Total\tU.S.\tWholesale\trecoveries | (124) | (179) | (459) | (396) | (261) |
| Total\tU.S.\trecoveries | (1,321) | (1,594) | (1,749) | (2,154) | (2,080) |
| Non-U.S.\trecoveries |  |  |  |  |  |
| Non-U.S.\tconsumer,\texcluding\tcredit\tcard | — | — | — | — | — |
| Non-U.S.\tcredit\tcard | (19) | (25) | (29) | (32) | (28) |
| Total\tnon-U.S.\tconsumer\trecoveries | (19) | (25) | (29) | (32) | (28) |
| Non-U.S.\twholesale: |  |  |  |  |  |
| Commercial\tand\tindustrial | — | (29) | (16) | (14) | (1) |
| Real\testate | — | — | (2) | (14) | — |
| Financial\tinstitutions | (14) | (10) | (7) | (38) | — |
| Government\tagencies | — | — | — | — | — |
| Other | (1) | (7) | (40) | (14) | — |
| Total\tnon-U.S.\twholesale\trecoveries | (15) | (46) | (65) | (80) | (1) |
| Total\tnon-U.S.\trecoveries | (34) | (71) | (94) | (112) | (29) |
| Total\trecoveries | (1,355) | (1,665) | (1,843) | (2,266) | (2,109) |
| Net\tcharge-offs | 4,759 | 5,802 | 9,063 | 12,237 | 23,673 |
| Write-offs\tof\tPCI\tloans(a) | 533 | 53 | — | — | — |
| Provision\tfor\tloan\tlosses | 3,224 | 188 | 3,387 | 7,612 | 16,822 |
| Change\tin\taccounting\tprinciples(b) | — | — | — | — | 7,494 |
| Other | (11) | (5) | 3 | (32) | 21 |
| Balance\tat\tyear-end | $14,185 | $16,264 | $21,936 | $27,609 | $32,266 |

(b) Effective	January	1,	2010,	the	Firm	adopted	accounting	guidance	related	to	variable	interest	entities	("VIEs").	Upon	adoption	of	the	guidance,	the	Firm	consolidated	its	Firm-sponsored	credit	card	securitization	trusts,	its	Firm-administered multi-seller	conduits	and	certain	other	consumer	loan	securitization	entities,	primarily	mortgage-related.	As	a	result,	$7.4	billion,	$14	million	and	$127	million,	respectively,	of	allowance	for	loan	losses	were	recorded	on-balance	sheet	with	the consolidation	of	these	entities.

# Allowance	for	lending-related	commitments

(b) The	allowance	for	loan	losses	as	a	percentage	of	retained	loans	declined	from	 2010	to	2014,	due	to	an	improvement	in	credit	quality	of	the	consumer	and	wholesale	credit	portfolios.	For	a	more detailed	discussion	of	the	2012	through	2014	provision	for	credit	losses,	see	Provision	for	credit	losses	on	 page	130.

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) | 2014 | 2013 | 2012 | 2014 | 2013 | 2012 |
| U.S.\toffices |  |  |  |  |  |  |
| Noninterest-bearing | $376,947 | $346,765 | $338,652 | —% | —% | —% |
| Interest-bearing |  |  |  |  |  |  |
| Demand | 75,553 | 63,045 | 43,124 | 0.10 | 0.09 | 0.08 |
| Savings | 459,186 | 429,289 | 383,777 | 0.10 | 0.13 | 0.18 |
| Time | 86,007 | 89,948 | 85,688 | 0.35 | 0.51 | 0.74 |
| Total\tinterest-bearing\tdeposits | 620,746 | 582,282 | 512,589 | 0.13 | 0.18 | 0.26 |
| Total\tdeposits\tin\tU.S.\toffices | 997,693 | 929,047 | 851,241 | 0.08 | 0.11 | 0.16 |
| Non-U.S.\toffices |  |  |  |  |  |  |
| Noninterest-bearing | 18,516 | 19,596 | 16,133 | — | — | — |
| Interest-bearing |  |  |  |  |  |  |
| Demand | 208,364 | 196,300 | 184,366 | 0.22 | 0.22 | 0.35 |
| Savings | 2,179 | 1,374 | 846 | 0.13 | 0.11 | 0.23 |
| Time | 37,549 | 42,825 | 53,297 | 0.97 | 1.32 | 1.23 |
| Total\tinterest-bearing\tdeposits | 248,092 | 240,499 | 238,509 | 0.33 | 0.42 | 0.55 |
| Total\tdeposits\tin\tnon-U.S.\toffices | 266,608 | 260,095 | 254,642 | 0.31 | 0.38 | 0.51 |
| Total\tdeposits | $1,264,301 | $1,189,142 | $1,105,883 | 0.13% | 0.17% | 0.24% |

At	December	31,	2014,	other	U.S.	time	deposits	in	denominations	of	$100,000	or	more	totaled	$45.7	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,	2014	(in	millions) | Three	months<br>or	less | Over	three	months<br>but	within	six	months | Over	six	months<br>	but	within	12	months | Over	12	months | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| U.S.\ttime\tcertificates\tof\tdeposit\t($100,000\tor\tmore) | $12,460 | $4,865 | $2,442 | $6,163 | $25,930 |

# 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) | 2014 | 2013 | 2012 |
| :--- | :--- | :--- | :--- |
| Federal\tfunds\tpurchased\tand\tsecurities\tloaned\tor\tsold\tunder\trepurchase\tagreements: |  |  |  |
| Balance\tat\tyear-end | $192,101 | $181,163 | $240,103 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 208,560 | 238,551 | 248,561 |
| Maximum\tmonth-end\tbalance | 228,162 | 272,718 | 268,931 |
| Weighted-average\trate\tat\tDecember\t31 | 0.27% | 0.31% | 0.23% |
| Weighted-average\trate\tduring\tthe\tyear | 0.29 | 0.24 | 0.22 |
| Commercial\tpaper: |  |  |  |
| Balance\tat\tyear-end | $66,344 | $57,848 | $55,367 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 59,916 | 53,717 | 50,780 |
| Maximum\tmonth-end\tbalance | 66,344 | 58,835 | 62,875 |
| Weighted-average\trate\tat\tDecember\t31 | 0.22% | 0.22% | 0.21% |
| Weighted-average\trate\tduring\tthe\tyear | 0.22 | 0.21 | 0.18 |
| Other\tborrowed\tfunds:(a) |  |  |  |
| Balance\tat\tyear-end | $96,455 | $92,774 | $79,258 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 100,189 | 93,937 | 79,003 |
| Maximum\tmonth-end\tbalance | 107,950 | 103,526 | 87,815 |
| Weighted-average\trate\tat\tDecember\t31 | 1.73% | 2.49% | 1.83% |
| Weighted-average\trate\tduring\tthe\tyear | 1.89 | 2.27 | 2.49 |
| Short-term\tbeneficial\tinterests:(b) |  |  |  |
| Commercial\tpaper\tand\tother\tborrowed\tfunds: |  |  |  |
| Balance\tat\tyear-end | $16,953 | $17,786 | $28,219 |
| Average\tdaily\tbalance\tduring\tthe\tyear | 14,073 | 22,245 | 25,653 |
| Maximum\tmonth-end\tbalance | 17,026 | 28,559 | 30,043 |
| Weighted-average\trate\tat\tDecember\t31 | 0.23% | 0.29% | 0.18% |
| Weighted-average\trate\tduring\tthe\tyear | 0.30 | 0.26 | 0.16 |

(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 percentage of total net revenue was due to net interest income in 2014?
net_interest_income_2014 = 43634
net_revenue_2014 = 94205
percent_income = net_interest_income_2014 / net_revenue_2014
answer = percent_income * 100