Document



 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): October 12, 2018
 
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
 
Delaware
1-5805
13-2624428
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(I.R.S. employer
identification no.)
 
 
 
270 Park Avenue, New York, New York
 
10017
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (212) 270-6000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

1




Item 2.02 Results of Operations and Financial Condition
On October 12, 2018, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) reported 2018 third quarter net income of $8.4 billion, or $2.34 per share, compared with net income of $6.7 billion, or $1.76 per share, in the third quarter of 2017. A copy of the 2018 third quarter earnings release is attached hereto as Exhibit 99.1, and a copy of the earnings release financial supplement is attached hereto as Exhibit 99.2.
Each of the Exhibits provided with this Form 8-K shall be deemed to be “filed” for purposes of the Securities Exchange Act of 1934.
This Current Report on Form 8-K (including the Exhibits hereto) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2017, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2018 and June 30, 2018, which have been filed with the Securities and Exchange Commission and are available on JPMorgan Chase’s website (http://investor.shareholder.com/jpmorganchase/sec.cfm) and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase does not undertake to update any forward-looking statements.











Item 9.01 Financial Statements and Exhibits

(d)    Exhibits
 
 
 
Exhibit No.
 
Description of Exhibit
 
 
 
12.1
 
12.2
 
99.1
 
99.2
 


2




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
JPMorgan Chase & Co.
(Registrant)


By:
/s/ Nicole Giles
 
Nicole Giles
 
Managing Director and Corporate Controller
 
(Principal Accounting Officer)


Dated:
October 12, 2018







3
Exhibit


EXHIBIT 12.1
JPMorgan Chase & Co.
Computation of Ratio of Earnings to Fixed Charges
 
Nine months ended September 30, (in millions, except ratios)
2018

Excluding interest on deposits
 
Income before income tax expense
$
31,923

Fixed charges:
 
Interest expense
11,678

One-third of rents, net of income from subleases (a)
406

Total fixed charges
12,084

Add: Equity in undistributed income of affiliates
456

Income before income tax expense and fixed charges, excluding capitalized interest
$
44,463

Fixed charges, as above
$
12,084

Ratio of earnings to fixed charges
3.68

Including interest on deposits
 
Fixed charges, as above
$
12,084

Add: Interest on deposits
4,021

Total fixed charges and interest on deposits
$
16,105

Income before income tax expense and fixed charges, excluding capitalized interest, as above
$
44,463

Add: Interest on deposits
4,021

Total income before income tax expense, fixed charges and interest on deposits
$
48,484

Ratio of earnings to fixed charges
3.01




(a)
The proportion deemed representative of the interest factor.


Exhibit


EXHIBIT 12.2
JPMorgan Chase & Co.
Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
 
Nine months ended September 30, (in millions, except ratios)
2018

Excluding interest on deposits
 
Income before income tax expense
$
31,923

Fixed charges:
 
Interest expense
11,678

One-third of rents, net of income from subleases (a)
406

Total fixed charges
12,084

Add: Equity in undistributed income of affiliates
456

Income before income tax expense and fixed charges, excluding capitalized interest
$
44,463

Fixed charges, as above
$
12,084

Preferred stock dividends (pre-tax)
1,506

Fixed charges including preferred stock dividends
$
13,590

Ratio of earnings to fixed charges and preferred stock dividend requirements
3.27

Including interest on deposits
 
Fixed charges including preferred stock dividends, as above
$
13,590

Add: Interest on deposits
4,021

Total fixed charges including preferred stock dividends and interest on deposits
$
17,611

Income before income tax expense and fixed charges, excluding capitalized interest, as above
$
44,463

Add: Interest on deposits
4,021

Total income before income tax expense, fixed charges and interest on deposits
$
48,484

Ratio of earnings to fixed charges and preferred stock dividend requirements
2.75




(a)
The proportion deemed representative of the interest factor.


Exhibit
JPMorgan Chase & Co.
270 Park Avenue, New York, NY 10017-2070
NYSE symbol: JPM
www.jpmorganchase.com

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12495986&doc=6

JPMORGAN CHASE REPORTS THIRD-QUARTER 2018 NET INCOME OF
$8.4 BILLION, OR $2.34 PER SHARE
 
THIRD-QUARTER 2018 RESULTS1 
ROE 14%
ROTCE2 17%
 
Common equity Tier 12
12.0%
 
Net payout LTM3,4
96%
Firmwide Metrics
n
Reported revenue of $27.3 billion; managed revenue of $27.8 billion2
n
Average core loans2 ex-CIB, up 6% YoY and 2% QoQ
 
 
 
CCB

ROE 31%
n
Average core loans2 up 6%; average deposits of $674 billion, up 4%
n
Client investment assets of $298 billion, up 14%
n
Credit card sales volume5 up 12% and merchant processing volume up 14%
 
 
 
CIB

ROE 14%
n
#1 Global Investment Banking fees with 8.7% wallet share YTD
n
Equity Markets revenue of $1.6 billion, up 17%
n
Treasury Services revenue up 12% and Securities Services revenue up 5%
 
 
 
CB

ROE 21%
n
Average loan balances up 4%
n
Strong credit quality with a net recovery of 3 bps
 
 
 
AWM

ROE 31%
n
Average loan balances up 12%
n
Assets under management (“AUM”) of $2.1 trillion, up 7%
 
                                                                                                                 
Jamie Dimon, Chairman and CEO, commented on the financial results: “JPMorgan Chase delivered strong results this quarter with top-line growth in each of our businesses, demonstrating the power of our platform. The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy.”
                                                                                                                      Dimon added:  “In Consumer & Community Banking we attracted record net new money this quarter, driving client investment assets up 14%, and we saw continued double-digit growth in card sales and merchant processing volume. Our customer satisfaction across CCB is at or near all-time highs, and we continue to grow deposits faster than the industry, even as the pace slows with rising rates. In the Corporate & Investment Bank we maintained our leadership in Banking and Markets, including #1 in global IB Fees year-to-date. Mixed results in Fixed Income Markets were offset by strong performance in Equities. Commercial Banking delivered another strong quarter, and Asset & Wealth Management attracted positive flows across all asset classes.”
Dimon concluded: “We are extremely excited to be expanding again, as smart regulatory policy and a competitive corporate tax system help us to deliver on our commitment to invest in our customers and communities. We just opened our first branch in Washington, D.C., which is one of hundreds of new branches that we will be opening in new markets, including Philadelphia and Boston. And every time we open branches in a new market, we bring the full force of JPMorgan Chase to that community. In addition, we launched several innovative new products, including our digital investing platform, You Invest, and Sapphire Banking, which builds on our highly successful Sapphire brand. These investments highlight our focus on delivering long-term value to our customers across products and channels, and to our shareholders and communities.”
                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                          
 
FORTRESS PRINCIPLES
n
Book value per share of $69.52, up 4%; tangible book value per share2 of $55.68, up 3%
n
Basel III common equity Tier 1 capital2 of $185 billion and ratio2 of 12.0%
n
Firm SLR2 of 6.5%
OPERATING LEVERAGE
n
3Q18 reported expense of $15.6 billion; reported overhead ratio of 57%; managed overhead ratio2 of 56%
CAPITAL DISTRIBUTED
n
$6.9 billion4 distributed to shareholders in 3Q18
n
$4.2 billion of net repurchases and common dividend of $0.80 per share



 
SUPPORTED CONSUMERS, BUSINESSES & COMMUNITIES
n
$1.9 trillion of credit and capital6 raised YTD
n
$174 billion of credit for consumers
n
$16 billion of credit for U.S. small businesses
n
$682 billion of credit for corporations
n
$960 billion of capital raised for corporate clients and non-U.S. government entities
n
$41 billion of credit and capital raised for nonprofit and U.S. government entities, including states, municipalities, hospitals and universities

Investor Contact: Jason Scott (212) 270-7325                                                                                                                                                                                                    1Percentage comparisons noted in the bullet points are for the third quarter of 2018 versus the prior-year third quarter, unless otherwise specified.
2For notes on non-GAAP financial measures, including managed basis reporting, and key performance measures, see page 6.
For additional notes see page 7.
Media Contact: Joseph Evangelisti (212) 270-7438


JPMorgan Chase & Co.
News Release

In the discussion below of Firmwide results of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”), information is presented on a managed basis, which is a non-GAAP financial measure, unless otherwise specified. The discussion below of the Firm’s business segments is also presented on a managed basis. For more information about managed basis, and non-GAAP financial measures and key performance measures used by management to evaluate the performance of each line of business, see page 6.
Comparisons noted in the sections below are for the third quarter of 2018 versus the prior-year third quarter, unless otherwise specified.
JPMORGAN CHASE (JPM)
Net revenue on a reported basis was $27.3 billion, $27.8 billion, and $25.6 billion for the third quarter of 2018, second quarter of 2018, and third quarter of 2017, respectively.
Results for JPM
 
 
 
 
 
 
2Q18
 
3Q17
($ millions, except per share data)
3Q18
 
2Q18
 
3Q17
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue - managed
$
27,822

 
$
28,388

 
$
26,452

 
$
(566
)
(2
)%
 
$
1,370

5
 %
Noninterest expense
15,623

 
15,971

 
14,570

 
(348
)
(2
)
 
1,053

7

Provision for credit losses
948

 
1,210

 
1,452

 
(262
)
(22
)
 
(504
)
(35
)
Net income
$
8,380

 
$
8,316

 
$
6,732

 
$
64

1
 %
 
$
1,648

24
 %
Earnings per share
$
2.34

 
$
2.29

 
$
1.76

 
$
0.05

2
 %
 
$
0.58

33
 %
Return on common equity
14
%
 
14
%
 
11
%
 
 
 
 
 
 
Return on tangible common equity
17

 
17

 
13

 
 
 
 
 
 
Discussion of Results:
Net income was $8.4 billion, an increase of 24%.
Net revenue was $27.8 billion, up 5%. Net interest income was $14.1 billion, up 7%, driven by the impact of higher rates which includes lower Markets net interest income, as well as loan and deposit growth. Noninterest revenue was $13.8 billion, up 3%, largely driven by higher Markets noninterest revenue and auto lease income, partially offset by markdowns on certain legacy private equity investments.
Noninterest expense was $15.6 billion, up 7%, predominantly driven by investments in the business and revenue-related costs, including higher compensation expense and auto lease depreciation, as well as investments in technology, marketing and real estate.
The provision for credit losses was $948 million, down from $1.5 billion in the prior year. The decrease was driven by the Consumer portfolio, largely reflecting net reserve releases in the current period versus a net build in the prior year.
The effective tax rate on a reported basis for the quarter was 21.6% compared to 29.6% in the prior year, reflecting the enactment of the Tax Cuts & Jobs Act (“TCJA”).

2

JPMorgan Chase & Co.
News Release

CONSUMER & COMMUNITY BANKING (CCB)
Results for CCB
 
 
 
 
 
 
2Q18
 
3Q17
($ millions)
3Q18
 
2Q18
 
3Q17
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
13,290

 
$
12,497

 
$
12,033

 
$
793

6
 %
 
$
1,257

10
 %
Consumer & Business Banking
6,385

 
6,131

 
5,408

 
254

4

 
977

18

Home Lending
1,306

 
1,347

 
1,558

 
(41
)
(3
)
 
(252
)
(16
)
Card, Merchant Services & Auto
5,599

 
5,019

 
5,067

 
580

12

 
532

10

Noninterest expense
6,982

 
6,879

 
6,495

 
103

1

 
487

7

Provision for credit losses
980

 
1,108

 
1,517

 
(128
)
(12
)
 
(537
)
(35
)
Net income
$
4,086

 
$
3,412

 
$
2,553

 
$
674

20
 %
 
$
1,533

60
 %
Discussion of Results:
Net income was $4.1 billion, an increase of 60%. Net revenue was $13.3 billion, an increase of 10%.
Consumer & Business Banking net revenue was $6.4 billion, up 18%, predominantly driven by higher net interest income as a result of higher deposit margins and balance growth. Home Lending net revenue was $1.3 billion, down 16%, driven by lower net servicing revenue, as well as loan spread and production margin compression. Card, Merchant Services & Auto net revenue was $5.6 billion, up 10%, driven by higher Card net interest income on margin expansion and loan growth, higher auto lease volumes, and higher Card noninterest revenue, reflecting lower acquisition costs, which were predominantly offset by lower net interchange income.
Noninterest expense was $7.0 billion, up 7%, predominantly driven by investments in technology and higher auto lease depreciation.
The provision for credit losses was $980 million, a decrease of $537 million, largely driven by a net reserve release of $100 million in the current quarter, compared with a build of $300 million in Card in the prior year. The current quarter included a reserve release of $250 million in the Home Lending purchased credit-impaired portfolio, reflecting continued improvement in home prices and delinquencies, largely offset by a reserve build of $150 million in Card driven by loan growth and higher loss rates, as expected. Net charge-offs were lower, predominantly due to a net recovery in Home Lending, which was largely driven by a loan sale.

3

JPMorgan Chase & Co.
News Release

CORPORATE & INVESTMENT BANK (CIB)
Results for CIB
 
 
 
 
 
 
2Q18
 
3Q17
($ millions)
3Q18
 
2Q18
 
3Q17
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
8,805

 
$
9,923

 
$
8,615

 
$
(1,118
)
(11
)%
 
$
190

2
 %
Banking
3,245

 
3,451

 
3,119

 
(206
)
(6
)
 
126

4

Markets & Investor Services
5,560

 
6,472

 
5,496

 
(912
)
(14
)
 
64

1

Noninterest expense
5,175

 
5,403

 
4,793

 
(228
)
(4
)
 
382

8

Provision for credit losses
(42
)
 
58

 
(26
)
 
(100
)
NM

 
(16
)
(62
)
Net income
$
2,626

 
$
3,198

 
$
2,546

 
$
(572
)
(18
)%
 
$
80

3
 %
Discussion of Results:
Net income was $2.6 billion, an increase of 3%. Net revenue was $8.8 billion, up 2%.
Banking revenue was $3.2 billion, up 4%. Investment Banking revenue was $1.7 billion, flat compared to a strong prior year, with overall share gains, reflecting higher equity underwriting fees offset by lower debt underwriting and advisory fees. Treasury Services revenue was $1.2 billion, up 12%, predominantly driven by higher interest rates and growth in operating deposits. Lending revenue of $331 million was flat.
Markets & Investor Services revenue was $5.6 billion, up 1%. Markets revenue of $4.4 billion was down 2% driven by Fixed Income Markets revenue, down 10%. Excluding the reduction in tax-equivalent adjustments as a result of the enactment of the TCJA, Markets revenue was up 1%, and Fixed Income Markets revenue was down 6%7. Fixed Income Markets revenue of $2.8 billion was down, reflecting mild weakness in Rates, Financing, Credit Trading and Securitized Products, as a result of compressed margins and tighter financing spreads in competitive markets. This decline was partially offset by increased activity levels in Emerging Markets, and in Commodities, by higher revenue compared to a challenging prior year. Equity Markets revenue was $1.6 billion, up 17%, with higher revenue across products, reflecting strong client activity. Securities Services revenue was $1.1 billion, up 5%, driven by higher interest rates and operating deposit growth, as well as higher asset-based fees from new client activity.
Noninterest expense was $5.2 billion, up 8%, predominantly due to a combination of higher legal expense, higher compensation expense largely driven by investments in technology and bankers, and higher volume-related transaction costs.
The provision for credit losses was a benefit of $42 million, driven by a net recovery related to a loan sale.
COMMERCIAL BANKING (CB)
Results for CB
 
 
 
 
 
 
2Q18
 
3Q17
($ millions)
3Q18
 
2Q18
 
3Q17
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
2,271

 
$
2,316

 
$
2,146

 
$
(45
)
(2
)%
 
$
125

6
%
Noninterest expense
853

 
844

 
800

 
9

1

 
53

7

Provision for credit losses
(15
)
 
43

 
(47
)
 
(58
)
NM

 
32

68

Net income
$
1,089

 
$
1,087

 
$
881

 
$
2


 
$
208

24
%
Discussion of Results:
Net income was $1.1 billion, an increase of 24%.
Net revenue was $2.3 billion, up 6%, driven by higher net interest income due to higher deposit margins, partially offset by lower deposit balances, largely due to non-operating deposits migrating to higher yielding investments.
Noninterest expense was $853 million, up 7%, predominantly driven by investments in banker coverage and technology.
The provision for credit losses was a benefit of $15 million, driven by net recoveries.

4

JPMorgan Chase & Co.
News Release

ASSET & WEALTH MANAGEMENT (AWM)
Results for AWM
 
 
 
 
 
 
2Q18
 
3Q17
($ millions)
3Q18
 
2Q18
 
3Q17
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
3,559

 
$
3,572

 
$
3,472

 
$
(13
)

 
$
87

3
%
Noninterest expense
2,585

 
2,566

 
2,408

 
19

1

 
177

7

Provision for credit losses
23

 
2

 
8

 
21

NM

 
15

188

Net income
$
724

 
$
755

 
$
674

 
$
(31
)
(4
)%
 
$
50

7
%
Discussion of Results:     
Net income was $724 million, an increase of 7%.
Net revenue was $3.6 billion, an increase of 3%, driven by higher management fees net of fee compression, on higher market levels and net long-term product inflows, as well as strong banking results, partially offset by the impact of lower market valuation gains, including on seed capital investments.
Noninterest expense was $2.6 billion, an increase of 7%, largely driven by investments in advisors and technology, as well as higher external fees on revenue growth.
Assets under management were $2.1 trillion, up 7%, driven by net inflows into long-term and liquidity products, as well as higher market levels.
CORPORATE
Results for Corporate
 
 
 
 
 
 
2Q18
 
3Q17
($ millions)
3Q18
 
2Q18
 
3Q17
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
(103
)
 
$
80

 
$
186

 
$
(183
)
NM

 
$
(289
)
NM

Noninterest expense
28

 
279

 
74

 
(251
)
(90
)
 
(46
)
(62
)
Provision for credit losses
2

 
(1
)
 

 
3

NM

 
2

NM

Net income/(loss)
$
(145
)
 
$
(136
)
 
$
78

 
$
(9
)
(7
)%
 
$
(223
)
NM

Discussion of Results:
Net loss was $145 million, compared with net income of $78 million in the prior year.
Net revenue was a loss of $103 million, largely driven by markdowns on certain legacy private equity investments totaling approximately $220 million pre-tax.
Noninterest expense was $28 million, including a net legal benefit.

5

JPMorgan Chase & Co.
News Release

2.
Notes on non-GAAP financial measures and key performance measures:
Notes on non-GAAP financial measures

a.
In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm’s definition of managed basis starts, in each case, 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 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. These financial measures allow 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. For a reconciliation of the Firm’s results from a reported to managed basis, see page 7 of the Earnings Release Financial Supplement.

b.
Tangible common equity (“TCE”), return on tangible common equity (“ROTCE”) and tangible book value per share (“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. For a reconciliation from common stockholders’ equity to TCE, see page 9 of the Earnings Release Financial Supplement. ROTCE measures the Firm’s net income applicable to common equity as a percentage of average TCE. TBVPS represents the Firm’s TCE at period-end divided by common shares at period-end. Book value per share was $69.52, $68.85 and $66.95 at September 30, 2018, June 30, 2018, and September 30, 2017, respectively. TCE, ROTCE, and TBVPS are meaningful to the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.

c.
Adjusted expense and adjusted overhead ratio are each non-GAAP financial measures. Adjusted expense excluded Firmwide legal expense of $20 million, $0 million and $(107) million for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017, respectively. The adjusted overhead ratio measures the Firm’s adjusted expense as a percentage of adjusted managed net revenue. Management believes this information helps investors understand the effect of these items on reported results and provides an alternate presentation of the Firm’s performance.


Notes on key performance measures

d.
Estimated as of September 30, 2018. The Basel III regulatory capital, risk-weighted assets and capital ratios (which become fully phased-in effective January 1, 2019), and the Basel III supplementary leverage ratio (“SLR”) (which was fully phased-in effective January 1, 2018), are all considered key regulatory capital measures. The capital adequacy of the Firm is evaluated against the Basel III approach (Standardized or Advanced) that results, for each quarter, in the lower ratio (the “Collins Floor”). These measures are used by management, bank regulators, investors and analysts to assess and monitor the Firm’s capital position. For additional information on these measures, including the Collins Floor, see Capital Risk Management on pages 82-91 of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2017, and pages 43-47 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018.

e.
Core loans represent loans considered central to the Firm’s ongoing businesses; core loans exclude loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit.









6

JPMorgan Chase & Co.
News Release

Additional notes:

3.
Last twelve months (“LTM”).
4.
Net of stock issued to employees.
5.
Excludes Commercial Card.
6.
Credit provided to clients represents new and renewed credit, including loans and commitments. Credit provided to small businesses reflects loans and increased lines of credit provided by Consumer & Business Banking; Card, Merchant Services & Auto; and Commercial Banking. Credit provided to nonprofit and U.S. and non-U.S. government entities, including U.S. states, municipalities, hospitals and universities, represents credit provided by the Corporate & Investment Bank and Commercial Banking.
7.
Reflects a reduction of approximately $140 million in FTE adjustments compared with the prior year quarter, resulting from the enactment of the TCJA.





7

JPMorgan Chase & Co.
News Release


JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.6 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of customers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

JPMorgan Chase & Co. will host a conference call today, October 12, 2018, at 8:30 a.m. (Eastern) to present third-quarter 2018 financial results. The general public can access the call by dialing (866) 541-2724 in the U.S. and Canada, or (706) 634-7246 for international participants. Please dial in 10 minutes prior to the start of the call. The live audio webcast and presentation slides will be available on the Firm’s website, www.jpmorganchase.com, under Investor Relations, Events & Presentations.

A replay of the conference call will be available beginning at approximately 12:30 p.m. on October 12, 2018, through midnight, October 26, 2018, by telephone at (800) 585-8367 (U.S. and Canada) or (404) 537-3406 (international); use Conference ID # 1075419. The replay will also be available via webcast on www.jpmorganchase.com under Investor Relations, Events & Presentations. Additional detailed financial, statistical and business-related information is included in a financial supplement. The earnings release and the financial supplement are available at www.jpmorganchase.com.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase & Co.’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2017, and Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2018 and March 31, 2018, which have been filed with the Securities and Exchange Commission and are available on JPMorgan Chase & Co.’s website (http://investor.shareholder.com/jpmorganchase/sec.cfm), and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update any forward-looking statements.



8
Exhibit


                            
                            
                            


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EARNINGS RELEASE FINANCIAL SUPPLEMENT

THIRD QUARTER 2018














JPMORGAN CHASE & CO.
 
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TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page(s)
 
Consolidated Results
 
 
 
 
 
 
 
 
Consolidated Financial Highlights
 
 
 
 
 
 
2–3
 
Consolidated Statements of Income
 
 
 
 
 
 
4
 
Consolidated Balance Sheets
 
 
 
 
 
 
5
 
Condensed Average Balance Sheets and Annualized Yields
 
 
 
 
 
 
6
 
Reconciliation from Reported to Managed Basis
 
 
 
 
 
 
7
 
Segment Results - Managed Basis
 
 
 
 
 
 
8
 
Capital and Other Selected Balance Sheet Items
 
 
 
 
 
 
9
 
Earnings Per Share and Related Information
 
 
 
 
 
 
10
 
 
 
 
 
 
 
 
 
 
Business Segment Results
 
 
 
 
 
 
 
 
Consumer & Community Banking
 
 
 
 
 
 
11–14
 
Corporate & Investment Bank
 
 
 
 
 
 
15–17
 
Commercial Banking
 
 
 
 
 
 
18–19
 
Asset & Wealth Management
 
 
 
 
 
 
20–22
 
Corporate
 
 
 
 
 
 
23
 
 
 
 
 
 
 
 
 
 
Credit-Related Information
 
 
 
 
 
 
24–27
 
 
 
 
 
 
 
 
 
 
Notes Including Non-GAAP Financial Measures and Key Performance Measures
 
 
 
 
 
 
28–29
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Glossary of Terms and Acronyms (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Refer to the Glossary of Terms and Acronyms on pages 283–289 of JPMorgan Chase & Co.’s (the “Firm’s”) Annual Report on Form 10-K for the year ended December 31, 2017 (the “2017 Annual Report”) and the Glossary of Terms and Acronyms and Line of Business Metrics on Pages 172–176 and pages 177–179, respectively, of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2018.





JPMORGAN CHASE & CO.
 
 
 
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12495986&doc=6
CONSOLIDATED FINANCIAL HIGHLIGHTS
 
 
 
 
(in millions, except per share and ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q18 Change
 
 
 
 
 
 
2018 Change
 
SELECTED INCOME STATEMENT DATA
3Q18
 
2Q18
 
1Q18
 
4Q17
 
3Q17
 
2Q18
 
3Q17
 
 
2018
 
2017
 
2017
 
Reported Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total net revenue
$
27,260

 
$
27,753

 
$
27,907

 
$
24,457

 
$
25,578

 
(2
)%

7
 %

 
$
82,920

 
$
76,248

 
9
 %

Total noninterest expense
15,623

 
15,971

 
16,080

 
14,895

 
14,570

 
(2
)
 
7

 
 
47,674

 
44,620

 
7

 
Pre-provision profit
11,637

 
11,782

 
11,827

 
9,562

 
11,008

 
(1
)
 
6

 
 
35,246

 
31,628

 
11

 
Provision for credit losses
948

 
1,210

 
1,165

 
1,308

 
1,452

 
(22
)
 
(35
)
 
 
3,323

 
3,982

 
(17
)
 
NET INCOME
8,380

 
8,316

 
8,712

 
4,232

 
6,732

 
1

 
24

 
 
25,408

 
20,209

 
26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Managed Basis (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total net revenue
27,822

 
28,388

 
28,520

 
25,754

 
26,452

 
(2
)
 
5

 
 
84,730

 
78,968

 
7

 
Total noninterest expense
15,623

 
15,971

 
16,080

 
14,895

 
14,570

 
(2
)
 
7

 
 
47,674

 
44,620

 
7

 
Pre-provision profit
12,199

 
12,417

 
12,440

 
10,859

 
11,882

 
(2
)
 
3

 
 
37,056

 
34,348

 
8

 
Provision for credit losses
948

 
1,210

 
1,165

 
1,308

 
1,452

 
(22
)
 
(35
)
 
 
3,323

 
3,982

 
(17
)
 
NET INCOME
8,380

 
8,316

 
8,712

 
4,232

 
6,732

 
1

 
24

 
 
25,408

 
20,209

 
26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income: Basic
$
2.35

 
$
2.31

 
$
2.38

 
$
1.08

 
$
1.77

 
2

 
33

 
 
$
7.04

 
$
5.26

 
34

 
Diluted
2.34

 
2.29

 
2.37

 
1.07

 
1.76

 
2

 
33

 
 
7.00

 
5.22

 
34

 
Average shares: Basic
3,376.1

 
3,415.2

 
3,458.3

 
3,489.7

 
3,534.7

 
(1
)
 
(4
)
 
 
3,416.5

 
3,570.9

 
(4
)
 
Diluted
3,394.3

 
3,434.7

 
3,479.5

 
3,512.2

 
3,559.6

 
(1
)
 
(5
)
 
 
3,436.2

 
3,597.0

 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MARKET AND PER COMMON SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market capitalization
$
375,239

 
$
350,204

 
$
374,423

 
$
366,301

 
$
331,393

 
7

 
13

 
 
$
375,239

 
$
331,393

 
13

 
Common shares at period-end
3,325.4

 
3,360.9

 
3,404.8

 
3,425.3

 
3,469.7

 
(1
)
 
(4
)
 
 
3,325.4

 
3,469.7

 
(4
)
 
Closing share price (b)
$
112.84

 
$
104.20

 
$
109.97

 
$
106.94

 
$
95.51

 
8

 
18

 
 
$
112.84

 
$
95.51

 
18

 
Book value per share
69.52

 
68.85

 
67.59

 
67.04

 
66.95

 
1

 
4

 
 
69.52

 
66.95

 
4

 
Tangible book value per share (“TBVPS”) (c)
55.68

 
55.14

 
54.05

 
53.56

 
54.03

 
1

 
3

 
 
55.68

 
54.03

 
3

 
Cash dividends declared per share
0.80

(g)
0.56

 
0.56

 
0.56

 
0.56

 
43

 
43

 
 
1.92

 
1.56

 
23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on common equity (“ROE”)
14
%

14
%

15
%

7
%
 
11
%
 
 
 
 
 
 
14
%

11
%

 
 
Return on tangible common equity (“ROTCE”) (c)
17

 
17

 
19

 
8

 
13

 
 
 
 
 
 
18

 
14

 
 
 
Return on assets
1.28

 
1.28

 
1.37

 
0.66

 
1.04

 
 
 
 
 
 
1.31

 
1.06

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 (“CET1”) capital ratio (e)
12.0
%
(h)
12.0
%
 
11.8
%
 
12.2
%
 
12.5
%
(i)
 
 
 
 
 
12.0
%
(h)
12.5
%
(i)
 
 
Tier 1 capital ratio (e)
13.6

(h)
13.6

 
13.5

 
13.9

 
14.1

(i)
 
 
 
 
 
13.6

(h)
14.1

(i)
 
 
Total capital ratio (e)
15.4

(h)
15.5

 
15.3

 
15.9

 
16.1

 
 
 
 
 
 
15.4

(h)
16.1

 
 
 
Tier 1 leverage ratio (e)
8.3

(h)
8.2

 
8.2

 
8.3

 
8.4

 
 
 
 
 
 
8.3

(h)
8.4

 
 
 
Supplementary leverage ratio (“SLR”) (f)
6.5
%
(h)
6.5

 
6.5

 
6.5

 
6.6

 
 
 
 
 
 
6.5

(h)
6.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. Refer to page 29 for further discussion.

(a)
For a further discussion of managed basis, see Reconciliation from Reported to Managed Basis on page 7.
(b)
Based on the closing price reported by the New York Stock Exchange.
(c)
TBVPS and ROTCE are non-GAAP financial measures. TBVPS represents tangible common equity (“TCE”) divided by common shares at period-end. ROTCE measures the Firm’s annualized earnings as a percentage of average TCE. TCE is also a non-GAAP financial measure; for a reconciliation of common stockholders’ equity to TCE, see page 9. For further discussion of these measures, see pages 28–29.
(d)
Quarterly ratios are based upon annualized amounts.
(e)
Ratios presented are calculated under the Basel III Transitional capital rules and for the capital ratios represent the Collins Floor. See footnote (a) on page 9 for additional information on Basel III and the Collins Floor.
(f)
Effective January 1, 2018, the SLR was fully phased-in under Basel III. The SLR is defined as Tier 1 capital divided by the Firm’s total leverage exposure. Ratios prior to March 31, 2018 were calculated under the Basel III Transitional rules.
(g)
On September 18, 2018, the Board of Directors increased the quarterly common stock dividend from $0.56 to $0.80 per share.
(h)
Estimated.
(i)
The prior period ratios have been revised to conform with the current period presentation.

Page 2



JPMORGAN CHASE & CO.
 
 
 
 
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CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
(in millions, except ratio and headcount data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q18 Change
 
 
 
 
 
 
2018 Change
 
 
3Q18
 
2Q18
 
1Q18
 
4Q17
 
3Q17
 
2Q18
 
3Q17
 
 
2018
 
2017
 
2017
 
SELECTED BALANCE SHEET DATA (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
2,615,183

 
$
2,590,050

 
$
2,609,785

 
$
2,533,600

 
$
2,563,074

 
1
 %
 
2
 %
 
 
$
2,615,183

 
$
2,563,074

 
2
 %
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, excluding credit card loans
376,062

 
374,697

 
373,395

 
372,681

 
369,601

 

 
2

 
 
376,062

 
369,601

 
2

 
Credit card loans
147,881

 
145,255

 
140,414

 
149,511

 
141,313

 
2

 
5

 
 
147,881

 
141,313

 
5

 
Wholesale loans
430,375

 
428,462

 
420,615

 
408,505

 
402,847

 

 
7

 
 
430,375

 
402,847

 
7

 
Total Loans
954,318

 
948,414

 
934,424

 
930,697

 
913,761

 
1

 
4

 
 
954,318

 
913,761

 
4

 
Core loans (a)
899,006

 
889,433

 
870,536

 
863,683

 
843,432

 
1

 
7

 
 
899,006

 
843,432

 
7

 
Core loans (average) (a)
894,279

 
877,640

 
861,089

 
850,166

 
837,522

 
2

 
7

 
 
877,774

 
822,611

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. offices:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing
374,603

 
385,741

 
397,856

 
393,645

 
390,863

 
(3
)
 
(4
)
 
 
374,603

 
390,863

 
(4
)
 
Interest-bearing
814,988

 
819,454

 
825,223

 
793,618

 
783,233

 
(1
)
 
4

 
 
814,988

 
783,233

 
4

 
Non-U.S. offices:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing
19,127

 
16,602

 
17,019

 
15,576

 
17,907

 
15

 
7

 
 
19,127

 
17,907

 
7

 
Interest-bearing
250,044

 
230,325

 
246,863

 
241,143

 
247,024

 
9

 
1

 
 
250,044

 
247,024

 
1

 
Total deposits
1,458,762

 
1,452,122

 
1,486,961

 
1,443,982

 
1,439,027

 

 
1

 
 
1,458,762

 
1,439,027

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt
270,124

 
273,114

 
274,449

 
284,080

 
288,582

 
(1
)
 
(6
)
 
 
270,124

 
288,582

 
(6
)
 
Common stockholders’ equity
231,192

 
231,390

 
230,133

 
229,625

 
232,314

 

 

 
 
231,192

 
232,314

 

 
Total stockholders’ equity
258,956

 
257,458

 
256,201

 
255,693

 
258,382

 
1

 

 
 
258,956

 
258,382

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans-to-deposits ratio
65
%

65
%

63
%
 
64
%
 
63
%

 
 
 
 
 
65
%

63
%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
255,313

 
252,942

 
253,707

 
252,539

 
251,503

 
1

 
2

 
 
255,313

 
251,503

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
95% CONFIDENCE LEVEL - TOTAL VaR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average VaR
$
35

 
$
35

 
$
43

 
$
34

 
$
30

 

 
17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LINE OF BUSINESS NET REVENUE (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
13,290

 
$
12,497

 
$
12,597

 
$
12,070

 
$
12,033

 
6

 
10

 
 
$
38,384

 
$
34,415

 
12

 
Corporate & Investment Bank
8,805

 
9,923

 
10,483

 
7,518

 
8,615

 
(11
)
 
2

 
 
29,211

 
27,139

 
8

 
Commercial Banking
2,271

 
2,316

 
2,166

 
2,353

 
2,146

 
(2
)
 
6

 
 
6,753

 
6,252

 
8

 
Asset & Wealth Management
3,559

 
3,572

 
3,506

 
3,638

 
3,472

 

 
3

 
 
10,637

 
10,197

 
4

 
Corporate
(103
)
 
80

 
(232
)
 
175

 
186

 
NM

 
NM

 
 
(255
)
 
965

 
NM

 
TOTAL NET REVENUE
$
27,822

 
$
28,388

 
$
28,520

 
$
25,754

 
$
26,452

 
(2
)
 
5

 
 
$
84,730

 
$
78,968

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LINE OF BUSINESS NET INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
4,086

 
$
3,412

 
$
3,326

 
$
2,631

 
$
2,553

 
20

 
60

 
 
$
10,824

 
$
6,764

 
60

 
Corporate & Investment Bank
2,626

 
3,198

 
3,974

 
2,316

 
2,546

 
(18
)
 
3

 
 
9,798

 
8,497

 
15

 
Commercial Banking
1,089

 
1,087

 
1,025

 
957

 
881

 

 
24

 
 
3,201

 
2,582

 
24

 
Asset & Wealth Management
724

 
755

 
770

 
654

 
674

 
(4
)
 
7

 
 
2,249

 
1,683

 
34

 
Corporate
(145
)
 
(136
)
 
(383
)
 
(2,326
)
 
78

 
(7
)
 
NM

 
 
(664
)
 
683

 
NM

 
NET INCOME
$
8,380

 
$
8,316

 
$
8,712

 
$
4,232

 
$
6,732

 
1

 
24

 
 
$
25,408

 
$
20,209

 
26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. Refer to page 29 for further discussion.

(a)
Loans considered central to the Firm’s ongoing businesses. For further discussion of core loans, see pages 28–29.
(b)
For a further discussion of managed basis, see Reconciliation from Reported to Managed Basis on page 7.





Page 3



JPMORGAN CHASE & CO.
 
 
 
 
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12495986&doc=6
CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
(in millions, except per share and ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q18 Change
 
 
 
 
 
 
2018 Change
 
REVENUE
3Q18
 
2Q18
 
1Q18
 
4Q17
 
3Q17
 
2Q18
 
3Q17
 
 
2018
 
2017
 
2017
 
Investment banking fees
$
1,832

 
$
2,168

 
$
1,736

 
$
1,818

 
$
1,868

 
(15
)%
 
(2
)%
 
 
$
5,736

 
$
5,594

 
3
 %
 
Principal transactions
2,964

 
3,782

 
3,952

 
1,907

 
2,721

 
(22
)
 
9

 
 
10,698

 
9,440

 
13

 
Lending- and deposit-related fees
1,542