JP Morgan Chase 2013 Annual Report Download - page 230

Notes to consolidated financial statements
236 JPMorgan Chase & Co./2013 Annual Report
Note 8 – Interest income and Interest expense
Interest income and interest expense is 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.
Year ended December 31,
(in millions) 2013 2012 2011
Interest income
Loans $33,489 $ 35,832 $ 37,098
Securities 7,812 7,939 9,215
Trading assets 8,426 9,039 11,142
Federal funds sold and
securities purchased under
resale agreements 1,940 2,442 2,523
Securities borrowed (127) (c) (3) (c) 110
Deposits with banks 918 555 599
Other assets(a) 538 259 606
Total interest income 52,996 56,063 61,293
Interest expense
Interest-bearing deposits 2,067 2,655 3,855
Short-term and other
liabilities(b) 2,125 1,788 2,873
Long-term debt 5,007 6,062 6,109
Beneficial interests issued by
consolidated VIEs 478 648 767
Total interest expense 9,677 11,153 13,604
Net interest income 43,319 44,910 47,689
Provision for credit losses 225 3,385 7,574
Net interest income after
provision for credit losses $43,094 $ 41,525 $ 40,115
(a) Largely margin loans.
(b) Includes brokerage customer payables.
(c) Negative interest income for the years ended December 31, 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.