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): April 14, 2020
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. employer identification no.) | ||
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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:
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||
Securities registered pursuant to Section 12(b) of the Act:
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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. ☐
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Item 7.01 Regulation FD Disclosure
On April 14, 2020, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) held an investor presentation to review 2020 first quarter earnings.
Exhibit 99 is a copy of slides furnished for, and posted on the Firm’s website in connection with, the presentation. The slides are being furnished pursuant to Item 7.01, and the information contained therein shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities under that Section. Furthermore, the information contained in Exhibit 99 shall not be deemed to be incorporated by reference into the filings of the Firm under the Securities Act of 1933.
This Current Report on Form 8-K (including the Exhibit 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, 2019, which has been filed with the Securities and Exchange Commission and is available on JPMorgan Chase’s website (https://jpmorganchaseco.gcs-web.com/financial-information/sec-filings) 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) Exhibit
Exhibit No. | Description of Exhibit | |
99 | ||
101 | Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language). | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). | |
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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 Firmwide Controller | |
(Principal Accounting Officer) | |
Dated: | April 14, 2020 |
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1Q20 Financial Results April 14, 2020
Here to help: our response to COVID-19 Employees Consumers Businesses Communities Over 180,000 employees Three-quarters of our ~5,000 Prudently extending credit to Focus on areas where we can working from home branches are open; the vast businesses of all sizes for leverage our core business, majority of our over 16,000 working capital and general philanthropy and policy Up to $1,000 special ATMs remain accessible corporate purposes, e.g.,: expertise to help the most payment for eligible vulnerable in the short- and employees Customer relief such as: Our clients have drawn $50B+ on existing long-term, initial commitments Up to 5 additional paid days 90-day grace period for revolvers, and we approved include: off to manage personal needs credit card, mortgage and $25B+ of new credit $150mm loan program to auto loan/lease payments Continue to pay e.g.,: extensions in March alone help underserved small Not reporting payment Employees at home due to SBA Paycheck Protection businesses and nonprofits deferrals to credit bureaus potential exposure to the Program: ~300,000 in some access capital through Waiving or refunding certain virus or whose health is stage of the application community partners fees higher risk process representing $50mm philanthropic Branch employees, even if Continue to responsibly lend ~$36B of loans, with investment to help their hours are reduced to qualified consumers ~$8.0B funded to address immediate and businesses with over long-term impacts of All COVID-related treatment 600,000 employees1 COVID-19 free under U.S. Medical Plan Helped clients raise $380B+ Matching employee Deployed clinical staff through the investment-grade donations to certain COVID- internally to support our debt market in 1Q20 19 relief efforts dollar-for- employees dollar JPMorgan Chase is there for its customers, clients, employees and communities in good and bad times. The COVID-19 pandemic is one of those extraordinary times – with both economic and health consequences – and we are prepared with our resources, expertise, capital and data to help. Note: For more information, visit jpmorganchase.com/covid-19 1 As of April 12, 2020 1
1Q20 Financial highlights ROTCE1 CET1 capital ratios2 Net payout LTM3 5% Std. 11.5%; Adv. 12.3% 124% 1Q20 net income of $2.9B and EPS of $0.78 Managed revenue of $29.1B4 Expense of $16.9B and managed overhead ratio of 58%4 Balance sheet Loans: – Average loans down 1% YoY and up 2% QoQ; excluding loan sales in Home Lending up 3% YoY and 2% QoQ – EOP loans up $59B or 6% YoY, and 6% QoQ Deposits: average deposits up 11% YoY and 4% QoQ; EOP deposits up $343B or 23% YoY, and 18% QoQ Basel III CET1 capital of $184B2 – Standardized CET1 capital ratio of 11.5%2; Advanced CET1 capital ratio of 12.3%2 Capital returned to shareholders Common dividend of $0.90 per share $6.0B of net repurchases in 1Q20 through March 15; announced suspension of repurchases through 2Q205 Significant items ($mm, excluding EPS) Pretax Net income EPS Firmwide reserve build ($6,816) ($5,180) ($1.66) Credit Adjustments & Other in CIB – losses related to funding spread widening on derivatives (951) (723) (0.23) Firmwide bridge book markdowns6 (896) (681) (0.22) 1 See note 2 on slide 13 2 Represents the estimated common equity Tier 1 (“CET1”) capital and ratio for the current period inclusive of CECL capital transition provisions. See note 6 on slide 13 3 Last twelve months (“LTM”). Net of stock issued to employees 2 4 See note 1 on slide 13 5 See note 7 on slide 13 6 See note 8 on slide 13
March activity Debit and credit card sales volume YoY IG issuance volume ($B)3 EOP loan and deposit growth YoY ($B) 100% Loan growth $187 Revolver Deposit Supermarkets, excluding loan sales draws 4 growth wholesale clubs & in Home Lending 23% discount stores 50% $105 $55 0% Retail $90 9% Restaurants1 8% 9% $1 $0 (50%) 2% 3% T&E2 (100%) Jan Feb March January February March January February March $21 $121 $28 $135 $88 $343 Merchant processing volume YoY5 Peak vs. January avg. trading volumes6 AWM AUM net asset flows ($B) Long-term products Liquidity products 3.4x 3.3x 100% $42 Brick & mortar – supermarkets 2.2x 2.2x 1.8x 50% $19 E-commerce $12 0% Brick & mortar – other (50%) Jan Feb March January February March For footnotes see slide 14 3
1Q20 Financial results1 $B, except per share data $ O/(U) 1Q20 4Q19 1Q19 Net interest income $14.5 $0.3 ($0.0) Noninterest revenue 14.5 (0.4) (0.7) 1 Managed revenue $B 1Q20 4Q19 1Q19 29.1 (0.1) (0.8) Net charge-offs $1.5 $1.5 $1.4 Expense Reserve build/(release) 6.8 (0.1) 0.1 16.9 0.5 0.5 Credit costs Credit costs $8.3 $1.4 $1.5 8.3 6.9 6.8 Reported net income 1Q20 Tax rate $2.9 ($5.7) ($6.3) Effective rate: 8.1% Net income applicable to common stockholders Managed rate: 27.2%1,5 $2.4 ($5.7) ($6.3) Reported EPS $0.78 ($1.79) ($1.87) 2 1Q20 ROE O/H ratio 4% 14% 16% ROE CCB 1% 54% ROTCE2,3 CIB 9% 59% 5 17 19 CB 2% 45% 1,2 Overhead ratio – managed AWM 25% 74% 58 56 55 Memo: Adjusted expense 4 $16.7 $0.6 $0.2 Memo: Adjusted overhead ratio 1,2,4 57% 55% 55% Note: Totals may not sum due to rounding 1 See note 1 on slide 13 2 Actual numbers for all periods, not over/(under) 3 See note 2 on slide 13 4 4 See note 3 on slide 13 5 Reflects fully taxable-equivalent (“FTE”) adjustments of $818mm in 1Q20
1Q20 Reserve build Allowance for credit losses ($B)1 CECL adoption Reserve 12/31/2019 impact 1/1/2020 build 3/31/2020 Consumer Card $5.7 $5.5 $11.2 $3.8 $15.0 Home Lending 1.9 0.1 2.0 0.3 2.3 Other Consumer2 0.7 0.3 1.0 0.3 1.3 Total Consumer 8.3 5.9 14.2 4.4 18.6 Wholesale2 6.0 (1.6) 4.4 2.4 6.8 Firmwide $14.3 $4.3 $18.6 $6.8 $25.4 Firmwide total credit reserves of $25.4B – net build of $6.8B driven by the impact of COVID-19 Consumer reserves of $18.6B – net build of $4.4B, predominantly in Card Wholesale reserves of $6.8B – net build of $2.4B across multiple impacted sectors, including Oil & Gas 1 See note 5 on slide 13 2 Other Consumer includes AWM’s mortgage portfolio and excludes risk-rated Business Banking and Auto dealer portfolios that have been reclassified to the Wholesale portfolio 5
Fortress balance sheet and capital $B, except per share data 1Q20 4Q19 1Q19 Basel III Standardized1 CET1 capital $184 $188 $186 CET1 capital ratio 1Q20 Advanced 11.5% 12.4% 12.1% of 12.3%1 Tier 1 capital $213 $214 $213 Tier 1 capital ratio 13.3% 14.1% 13.8% Total capital $248 $243 $241 Total capital ratio 15.5% 16.0% 15.7% Risk-weighted assets $1,600 $1,516 $1,543 Firm SLR2 6.0% 6.3% 6.4% Total assets (EOP) $3,139 $2,687 $2,737 Tangible common equity (EOP)3 $185 $188 $187 Tangible book value per share3 $60.71 $60.98 $57.62 CET1 ratio (%) Risk-weighted assets ($B) 50 bps $1,600 12.4% $24 $16 3 bps $32 $32 (59 bps) $1,516 (21 bps) (24 bps) 11.5% Common ($20) dividends: (40 bps) (18 bps) 4Q19 Net income Capital Provision AOCI Wholesale All other 1Q20 4Q19 Wholesale Retail Counterparty Market risk Other 6 1Q20 ex. provision distributions4 (post-tax)5 and other loans and RWA credit risk commitments Loans and commitments RWA 1 Represents estimated capital measures inclusive of CECL capital transition provisions for the current period. See note 6 on slide 13 2 Estimated for the current period. Represents the supplementary leverage ratio (“SLR”) 3 See note 2 on slide 13 6 4 Includes share repurchases and common and preferred dividends 5 Net of CECL capital transition provisions. See note 6 on slide 13 6 Primarily includes RWA related to investment securities, securitization and other assets
Consumer & Community Banking1 $mm Financial performance $ O/(U) Net income of $191mm, down 95% YoY 1Q20 4Q19 1Q19 Revenue of $13.2B, down 2% YoY Revenue $13,171 ($624) ($319) Expense of $7.2B, up 3% YoY, driven by higher volume- and Consumer & Business Banking 6,091 (446) (570) revenue-related expense and investments, partially offset by lower Home Lending 1,161 (89) (185) structural expense Card & Auto 5,919 (89) 436 Credit costs of $5.8B, up $4.5B YoY reflecting reserve builds in: Expense 7,161 150 191 Credit costs 5,772 4,565 4,458 Card: $3.8B Net charge-offs (NCOs) 1,313 (44) (1) Home Lending: $300mm Change in allowance 4,459 4,609 4,459 Auto: $250mm Net income $191 ($4,023) ($3,756) CBB: $159mm Key drivers/statistics ($B)2 Key drivers/statistics ($B) – detail by business Equity $52.0 $52.0 $52.0 1Q20 4Q19 1Q19 ROE 1% 31% 30% Consumer & Business Banking Overhead ratio 54 51 52 Business Banking average loans $24.7 $24.4 $24.3 Average loans $448.9 $451.6 $479.3 Business Banking loan originations 1.5 1.8 1.5 Average deposits 733.6 708.0 681.0 Client investment assets (EOP) 323.0 358.0 312.3 Active mobile customers (mm) 38.2 37.3 34.4 Deposit margin 2.06% 2.28% 2.62% Debit & credit card sales volume $266.0 $295.6 $255.1 Home Lending Average loans $198.0 $201.6 $238.9 Average loans down 6% YoY; EOP loans down 7% YoY Loan originations3 28.1 33.3 15.0 EOP total loans serviced 737.8 761.4 791.5 Average deposits up 8% YoY; EOP deposits up 10% YoY Net charge-off/(recovery) rate4 (0.25)% (0.05)% (0.01)% Active mobile customers up 11% YoY Card & Auto Card average loans $162.7 $162.1 $151.1 Client investment assets up 3% YoY Auto average loans and leased assets 84.0 83.5 83.6 Credit card sales volume up 4% YoY Auto loan and lease originations 8.3 8.5 7.9 Card net charge-off rate 3.25% 3.01% 3.23% Credit Card net revenue rate 10.68 10.76 10.68 Credit Card sales volume5 179.1 204.2 172.5 1 See notes 1 and 9 on slide 13 For additional footnotes see slide 14 7
Corporate & Investment Bank1 $mm Financial performance $ O/(U) Net income of $2.0B, down 39% YoY; revenue of $9.9B, down 1% 1Q20 4Q19 1Q19 Banking revenue Revenue $9,948 $301 ($86) IB revenue of $886mm, down 49% YoY Investment Banking revenue 886 (937) (859) – $820mm of markdowns on HFS positions in the bridge book2 Wholesale Payments 1,359 (74) (56) – IB fees, up 3%, reflecting higher debt and equity underwriting Lending 350 100 92 fees, largely offset by lower advisory fees Total Banking 2,595 (911) (823) – Ranked #1 in Global IB fees for 1Q20 Fixed Income Markets 4,993 1,547 1,268 Equity Markets 2,237 729 496 Wholesale Payments revenue of $1.4B, down 4% YoY Securities Services 1,074 13 60 Lending revenue was $350mm, up 36%, predominantly driven by Credit Adjustments & Other (951) (1,077) (1,087) mark-to-market gains on hedges of accrual loans Total Markets & Securities Services 7,353 1,212 737 Markets & Securities Services revenue Expense 5,896 504 267 Markets revenue of $7.2B, up 32% YoY Credit costs 1,401 1,303 1,314 – Fixed Income Markets revenue of $5.0B, up 34%, driven by Net income $1,988 ($950) ($1,272) strong client activity across products – Equity Markets revenue of $2.2B, up 28%, predominantly Key drivers/statistics ($B)3 driven by higher revenue in derivatives Securities Services revenue of $1.1B, up 6% YoY, predominantly Equity $80.0 $80.0 $80.0 ROE 9% 14% 16% driven by balance and fee growth partially offset by deposit Overhead ratio 59 56 56 margin compression Comp/revenue 30 25 31 Credit Adjustments & Other was a loss of $951mm IB fees ($mm) $1,907 $1,904 $1,844 predominantly driven by funding spread widening on derivatives Average loans 138.7 129.1 135.6 Expense of $5.9B, up 5% YoY driven by higher legal expense, Average client deposits4 514.5 485.0 444.1 5 volume- and revenue-related expense and investments, partially Merchant processing volume ($B) 374.8 402.9 356.5 Assets under custody ($T) 24.4 26.8 24.7 offset by lower structural expense ALL/EOP loans ex-conduits and trade6 1.11% 1.31% 1.34% Credit costs of $1.4B were predominantly driven by reserve builds Net charge-off/(recovery) rate6 0.17 0.14 0.10 from the impact of COVID-19 across multiple sectors Average VaR ($mm)7 $58 $37 $48 Average loans of $139B, up 2% YoY; EOP loans of $175B, up 30% Average deposits of $562B, up 14% YoY; EOP deposits of $668B, 1 See notes 1 and 9 on slide 13 up 37% 2 See note 8 on slide 13 For additional footnotes see slide 14 8
Commercial Banking1 $mm Financial performance $ O/(U) Net income of $147mm, down 86% YoY 1Q20 4Q19 1Q19 Revenue of $2.2B, down 10% YoY Revenue $2,178 ($119) ($235) Middle Market Banking 946 12 (28) Net interest income of $1.6B, down 7% YoY, driven by lower Corporate Client Banking 681 (78) (170) deposit margin, partially offset by higher deposit balances Commercial Real Estate Banking 541 4 (6) Noninterest revenue included $76mm of markdowns on HFS Other 10 (57) (31) positions in the bridge book2 Expense 988 45 50 Credit costs 1,010 900 920 Gross IB revenue of $686mm, down 16% YoY compared to a Net income $147 ($797) ($913) record prior-year quarter Expense of $988mm, up 5% YoY, predominantly driven by Key drivers/statistics ($B)3 investments Equity $22.0 $22.0 $22.0 Credit costs of $1.0B predominantly driven by reserve builds for ROE 2% 16% 19% Oil & Gas and other COVID-19 impacted sectors Overhead ratio 45 41 39 Net charge-off rate of 19bps, largely driven by Oil & Gas Gross IB revenue ($mm) $686 $634 $818 Average loans 211.8 209.8 206.1 EOP loans of $233B, up 14% YoY and 12% QoQ Average client deposits 188.8 182.5 167.3 C&I5 up 26% YoY and 23% QoQ, driven by increased Allowance for loan losses 2.7 2.8 2.8 Nonaccrual loans 0.8 0.5 0.5 revolving credit utilization Net charge-off/(recovery) rate4 0.19% 0.17% 0.02% CRE5 up 3% YoY and 2% QoQ ALL/loans4 1.15 1.34 1.35 Average deposits of $189B, up 13% YoY and 3% QoQ, largely driven by cash deposited as a result of increased revolver draws EOP deposits of $224B, up 39% YoY and 22% QoQ 1 See notes 1 and 9 on slide 13 2 See note 8 on slide 13 For additional footnotes see slide 14 9
Asset & Wealth Management1 $mm Financial performance $ O/(U) Net income of $664mm, flat YoY 1Q20 4Q19 1Q19 Revenue of $3.6B, up 3% YoY Revenue $3,606 ($94) $117 Asset Management 1,740 (152) (21) Higher management fees on higher average market levels and Wealth Management 1,866 58 138 net inflows over the past year, as well as increased brokerage Expense 2,659 9 12 activity, largely offset by lower investment valuations Credit costs 94 81 92 Net income $664 ($121) $3 Expense of $2.7B, flat YoY Higher investments and increased volume- and revenue- Key drivers/statistics ($B)2 related expense, predominantly offset by lower structural expense Equity $10.5 $10.5 $10.5 ROE 25% 29% 25% Credit costs were $94mm, driven by reserve builds from the Pretax margin 24 28 24 impact of COVID-19 and loan growth Assets under management ("AUM") $2,239 $2,364 $2,096 AUM of $2.2T and client assets of $3.0T, were up 7% and 4% Client assets 3,002 3,226 2,897 YoY, respectively, driven by cumulative net inflows, partially Average loans 161.8 156.1 145.4 Average deposits 150.6 143.1 138.2 offset by the impact of lower market levels at the end of the quarter Net inflows of $75B into liquidity products and outflows of $2B from long-term products in the quarter Average loans of $162B, up 11% YoY; EOP loans of $166B, up 16% Average deposits of $151B, up 9% YoY; EOP deposits of $169B, up 18% 1 See note 1 on slide 13 2 Actual numbers for all periods, not over/(under) 10
Corporate1 $mm Financial performance $ O/(U) Revenue 1Q20 4Q19 1Q19 Revenue of $166mm, down $259mm YoY Revenue $166 $394 ($259) Expense 146 (197) (65) The quarter included $233mm of net investment securities Credit costs 8 9 6 gains Net income ($125) $236 ($376) YoY variance driven by lower net interest income on lower rates, partially offset by higher net investment securities gains Expense Expense of $146mm, down $65mm YoY 1 See note 1 on slide 13 11
Outlook1 Net interest income – Firmwide ($B) ~$13.7B in 2Q20 $57.8 $57+ $2.5 ~$55.5 $1 ($5) Growth Mix 2019 2020 Rates Balance sheet CIB Markets/ 2020 Investor Day growth/mix other outlook³ outlook² Noninterest revenue (“NIR”) – Firmwide Other4 Expense: Expect FY2020 adjusted expense to be ~$65B FY2020 NIR headwinds vs. FY2019 results Credit reserves: Expect net reserve builds in 2Q20 ▼ CIB Markets: All else equal, expect ~$3.5B lower NIR due to Market rates, which offsets the increase in NII dependent ▼ AWM: Expect lower fees on lower average market levels Volume ▼ CIB Banking: driven Expect lower IB fees on lower activity Note: Noninterest revenue categorization as market-dependent or volume-driven reflects Investor Day 2020 classifications 1 See notes 1 and 3 on slide 13 ² Investor Day outlook for 2020 NII included ~$1B benefit from CIB Markets/other 3 JPMorgan Chase’s outlook is based on implied rate curves as of April 8, 2020 4 Previous guidance for FY2020 Firmwide and line of business net charge-offs, net charge-off rates, 12 effective tax rate, CCB credit card net revenue rate, and FY2021 Firmwide net interest income has been withdrawn; achievement of medium-term targets may take time and require more normalized GDP, unemployment and interest rates
Notes Notes on non-GAAP financial measures 1. 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 2. 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 $75.88, $75.98 and $71.78 at March 31, 2020, December 31, 2019 and March 31, 2019, respectively. TCE, ROTCE and TBVPS are utilized by the Firm, as well as investors and analysts, in assessing the Firm’s use of equity 3. Adjusted expense and adjusted overhead ratio are each non-GAAP financial measures. Adjusted expense excludes Firmwide legal expense/(benefit) of $197mm, $241mm and $(81)mm for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019, 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 4. Corporate & Investment Bank (“CIB”) calculates the ratio of the allowance for loan losses to end-of-period loans (“ALL/EOP”) excluding the impact of consolidated Firm-administered multi- seller conduits and trade finance loans, to provide a more meaningful assessment of CIB’s allowance coverage ratio Additional notes 5. Effective January 1, 2020, the Firm adopted the Financial Instruments - Credit Losses ("CECL") accounting guidance. Refer to page 29 of the Earnings Release Financial Supplement for further information 6. As of March 31, 2020, the capital measures reflect the revised CECL capital transition provisions and the removal of assets purchased pursuant to a non-recourse loan provided under the Money Market Liquidity Facility (“MMLF”), as provided by the U.S. banking agencies. Refer to page 29 of the Earnings Release Financial Supplement for further information on the revised CECL capital transition provisions and Capital Risk Management on pages 85-92 of the Firm’s 2019 Form 10-K for additional information on these capital measures 7. On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended share repurchases through the second quarter of 2020 8. The bridge book consists of certain held-for-sale positions, including unfunded commitments, in CIB and CB 9. In the first quarter of 2020, to complete the realignment of the Firm’s wholesale payment businesses the Firm established a Wholesale Payments business unit within CIB. The Wholesale Payments business comprises Treasury Services and Merchant Services across CIB, CCB and CB as well as CIB Trade Finance that was previously reported in Lending in CIB. As a result the assets, liabilities and headcount associated with the Merchant Services business were realigned to CIB from CCB. In conjunction with this realignment the revenue and expenses of the Merchant Services business will be reported across CCB, CIB and CB based primarily on client relationship. Prior periods have been revised to reflect this realignment and revised allocation methodology. Refer to page 30 of the Earnings Release Financial Supplement for further information 13
Notes Notes on slide 3 – March activity 1. Restaurants includes quick serve restaurants 2. T&E includes airlines, auto rental, lodging, travel agencies and other travel and entertainment 3. Includes total proceeds from global bond, medium-term note and preferred issuances for which JPMorgan Chase acted as a bookrunner per Dealogic 4. Represents increases in retained loans on revolving commitments in our Wholesale businesses 5. Brick & mortar represents card present and e-commerce represents card not present processing volumes 6. Represents peak daily trading volumes in cash products between February 24, 2020 and March 31, 2020 vs. average daily trading volumes for the month ended January 31, 2020 Additional notes on slide 7 – Consumer & Community Banking 2. Actual numbers for all periods, not over/(under) 3. Firmwide mortgage origination volume was $31.9B, $37.4B and $16.4B for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019, respectively 4. Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption resulted in a change in the accounting for PCI loans, which are considered purchased credit deteriorated (“PCD”) loans under CECL. Refer to page 29 of the Earnings Release Financial Supplement for further information. The net charge-off/(recovery) rate for the three months ended March 31, 2020 includes a recovery from a loan sale 5. Excludes Commercial Card Additional notes on slide 8 – Corporate & Investment Bank 3. Actual numbers for all periods, not over/(under) 4. Client deposits and other third-party liabilities pertain to the Wholesale Payments and Securities Services businesses 5. Represents total merchant processing volume across CIB, CCB and CB 6. Loans held-for-sale and loans at fair value were excluded when calculating the loan loss coverage ratio and net charge-off/(recovery) rate. ALL/EOP loans as reported was 0.86%, 0.99% and 0.99% at March 31, 2020, December 31, 2019 and March 31, 2019, respectively. See note 4 on slide 13 7. Effective January 1, 2020, the Firm refined the scope of VaR to exclude positions related to the risk management of interest rate exposure from changes in the Firm’s own credit spread on fair value option elected liabilities, and included these positions in other-sensitivity based measures. This change was made to more appropriately reflect the risk from changes in the Firm’s own credit spread on fair value option elected liabilities in a single market risk measure. In the absence of this refinement, the average VaR for each of the following reported components would have been higher by the following amounts: CIB fixed income of $4 million, CIB Trading VaR $5 million and CIB VaR $6 million for the three months ended March 31, 2019 Additional notes on slide 9 – Commercial Banking 3. Actual numbers for all periods, not over/(under) 4. Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate and loan loss coverage ratio 5. Commercial and Industrial (“C&I”) and Commercial Real Estate (“CRE”) groupings for CB are generally based on client segments and do not align with regulatory definitions 14
Forward-looking statements This presentation 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, 2019, which has been filed with the Securities and Exchange Commission and is available on JPMorgan Chase & Co.’s website (https://jpmorganchaseco.gcs- web.com/financial-information/sec-filings), and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update any forward-looking statements. 15