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 13, 2023
(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.) | ||||||||||||
| (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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
| 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:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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. ☐
Item 7.01 Regulation FD Disclosure
On October 13, 2023, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) held an investor presentation to review 2023 third 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, 2022, and Quarterly Report on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023, which have been filed with the Securities and Exchange Commission and are 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). | |||||||
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/ Elena Korablina | ||||
| Elena Korablina | |||||
| Managing Director and Firmwide Controller | |||||
| (Principal Accounting Officer) | |||||
| Dated: | October 13, 2023 | ||||
3
3Q23 Financial Results October 13, 2023 Exhibit 99
Pretax Net income EPS Net investment securities losses in Corporate ($669) ($508) ($0.17) Firmwide legal expense ($665) ($654) ($0.22) 3Q23 Financial highlights 1 See note 3 on slide 12 2 - Absorbing Capacity for the current period. See note 1 on slide 13 3 Standardized risk- 4 Cash and marketable securities represents HQLA and unencumbered marketable securities. Estimated for the current period. See note 2 on slide 13 5 See note 1 on slide 12 6 On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First refer to excluding or including the relevant effects of the First Republic acquisition, as well as subsequent related business and activities, as applicable 7 Includes the net impact of employee issuances 8 SIGNIFICANT ITEMS ($MM, EXCLUDING EPS) Balance sheet Loans: average loans of $1.3T up 17% YoY and 5% QoQ Ex. FR6, average loans of $1.2T up 4% YoY and 2% QoQ Deposits: average deposits of $2.4T down 4% YoY and 1% QoQ Ex. FR, average deposits of $2.3T down 6% YoY and 2% QoQ CET1 capital of $242B2 Standardized CET1 capital ratio of 14.3%2; Advanced CET1 capital ratio of 14.5%2 Capital distributed Common dividend of $3.1B or $1.05 per share $2.0B of common stock net repurchases7 Net payout LTM of 35%8 Income statement 3Q23 net income of $13.2B and EPS of $4.33 Managed revenue of $40.7B5 Expense of $21.8B and managed overhead ratio of 53%5 ROTCE1 22% CET1 capital ratios2 Std. 14.3% | Adv. 14.5% Total Loss-Absorbing Capacity2 $496B Std. RWA3 $1.7T Cash and marketable securities4 $1.4T Average loans $1.3T 1
3Q23 Reported FR impact ex. FR 2Q23 3Q22 Net interest income $22.9 $1.5 $21.4 $0.4 $3.8 Noninterest revenue 17.8 0.8 17.1 (0.3) 1.2 Managed revenue1 40.7 2.2 38.5 0.1 5.0 Expense 21.8 0.9 20.9 0.7 1.7 Credit costs 1.4 (0.0) 1.4 (0.3) (0.1) Net income $13.2 $1.1 $12.1 ($0.0) $2.3 Net income applicable to common stockholders $12.7 $1.1 $11.6 ($0.0) $2.4 $4.33 $0.36 $3.97 $0.02 $0.85 ROE2 18% 2% 16% 17% 15% ROTCE2,3 22 2 20 21 18 1,2 53 (1) 54 53 57 Memo: NII excluding Markets 4 $23.2 $1.5 $21.7 $0.2 $4.8 NIR excluding Markets 4 10.9 0.8 10.2 0.3 0.4 Markets revenue 6.6 - 6.6 (0.4) (0.2) Managed revenue1 40.7 2.2 38.5 0.1 5.0 Adjusted expense 5 $21.1 $0.9 $20.2 $0.4 $1.1 Adjusted overhead ratio 1,2,5 52% (1)% 53% 52% 57% ex. FR $ O/(U) 3Q23 Financial results1 3Q23 Tax rate Effective rate: 21.4% Managed rate: 25.0%1,6 Note: Totals may not sum due to rounding 1 See note 1 on slide 12 2 Actual numbers for all periods, not over/(under) 3 See note 3 on slide 12 4 See note 2 on slide 12 5 See note 4 on slide 12 6 Reflects fully taxable- $B 3Q23 2Q23 3Q22 Net charge-offs $1.5 $1.4 $0.7 Reserve build/(release) (0.1) 1.5 0.8 Credit costs $1.4 $2.9 $1.5 $B, EXCEPT PER SHARE DATA 3Q23 ROE O/H ratio CCB 41% 50% CIB 11% 63% CB 25% 34% AWM 32% 63% 2
Fortress balance sheet Note: Totals may not sum due to rounding 1 Estimated for the current period. See note 1 on slide 13 2 3 4 See note 4 on slide 13 5 See note 3 on slide 12 6 Reflects Net Income Applicable to Common Equity 7 Excludes AOCI on cash flow hedges and DVA related to structured notes 8 Includes net share repurchases and common dividends 9 Primarily reduction in CET1 capital deductions 3Q23 2Q23 3Q22 Risk-based capital metrics1 CET1 capital $242 $236 $210 14.3% 13.8% 12.5% 14.5 13.9 13.0 Basel III Standardized RWA $1,693 $1,707 $1,678 Leverage-based capital metric2 Firm SLR 6.0% 5.8% 5.3% Liquidity metrics3 Firm LCR 112% 112% 113% Bank LCR 123 129 165 Total excess HQLA $252 $296 $531 HQLA and unencumbered marketable securities 1,386 1,411 1,480 Balance sheet metrics Total assets (EOP) $3,898 $3,868 $3,774 Deposits (average) 2,356 2,387 2,445 Tangible book value per share5 82.04 79.90 69.90 4 $B, EXCEPT PER SHARE DATA 13.8% 14.3%(14 bps) (30 bps) 75 bps 11 bps 4 bps 2Q23 Net income AOCI Capital Distributions RWA Other 3Q23 1,707 1,693 (5) (3) (5) 2Q23 Loans Market Risk Credit Risk ex. Loans 3Q23 STANDARDIZED CET1 RATIO (%)1 STANDARDIZED RISK-WEIGHTED ASSETS ($B)1 6 7 8 9 3
75 98 50 55 75 98 Current Standardized B3E NPR GSIB SURCHARGE EXACERBATES THE IMPACT INCREASE IN OPERATIONAL RISK CAPITAL As proposed, the U.S. B3E NPR1 $22.5B is directly linked to our 4.5% GSIB2 surcharge (4.5% x $500B), despite no change to our systemic risk footprint The proposal increases the required capital for operational risk by $30B We estimate our SCB already includes ~$15B3 capital for operational risk Current Proposed Regulatory minimum SCB4 GSIB = Operational risk capital ~$45B ~$15B 5 $22.5B $50B $5B $22.5B $30B SCB Regulatory minimum GSIB Capital added for B3E RWA SCB $200B $250B 3 Note: Estimated B3E impacts based on our best understanding of the proposal applied to our balance sheet as of 2Q23 and does not incorporate any remediation. Numbers above have been rounded for ease of illustration. Estimated RWA impact of >$500B has been rounded down to $500B For footnotes see slide 14 JPM believes that an RWA change of this magnitude requires corresponding adjustments to SCB and GSIB 4
2017 rules 3Q23 Pre-NPR Post B3E and GSIB NPR Future 1 quoted by the Agencies does not tell the full story GROWTH IN JPM CET1 REQUIREMENTS SINCE 20172 osed And looking beyond the B3E proposal, the future trend is up Since the GSIB proposal did not adjust for growth, we expect continued headwinds due to ordinary economic growth JPM disagrees with the cost-benefit analysis and believes that increases of this magnitude are unwarranted ? SA-CCR and SCB adoptions4 GSIB: 3.5 to 4.0% GSIB: 4.0 to 4.5% B3E NPR GSIB NPR5 ~45% CECL6 in CCAR GSIB headwinds $17B / 10% $8B / 4% $50B / 25% $4B / 2% ? ? Note: Numbers above have been rounded for ease of illustration For footnotes see slide 14 3 5
Consumer & Community Banking1 KEY DRIVERS / STATISTICS ($B) DETAIL BY BUSINESS FINANCIAL PERFORMANCE (ex. FR)SELECTED INCOME STATEMENT DATA ($MM) KEY DRIVERS / STATISTICS ($B)3 Net income of $5.3B, up 22% YoY Revenue of $17.0B, up 19% YoY, driven by higher net interest income Expense of $8.5B, up 7% YoY, driven by higher compensation including an increase in headcount, continued investments in technology and marketing and the FDIC assessment increase announced in the prior year, partially offset by lower auto lease depreciation Credit costs of $1.4B NCOs of $1.4B, up $720mm YoY, predominantly driven by continued normalization in Card Services Net reserve build of $49mm reflected $301mm in Card Services, predominantly offset by a net release of $250mm in Home Lending 1 See note 1 on slide 12 2 See note 3 on slide 13 For additional footnotes see slide 14 CCB CIB CB AWM Corp. Ex. FR: Average loans up 6% YoY and 3% QoQ Average deposits down 8% YoY and 3% QoQ EOP deposits down 9% YoY and 3% QoQ Active mobile customers up 9% YoY Debit & credit card sales volume up 8% YoY Client investment assets up 21% YoY and flat QoQ 3Q23 ex. FR $ O/(U) Reported FR impact ex. FR 2Q23 3Q22 Revenue $18,362 $1,355 $17,007 $605 $2,726 Banking & Wealth Management2 11,345 1,004 10,341 1 2,381 Home Lending 1,252 351 901 129 (19) Card Services & Auto 5,765 - 5,765 475 364 Expense2 9,105 583 8,522 246 539 Credit costs 1,446 (2) 1,448 (6) 919 Net charge-offs (NCOs) 1,399 - 1,399 148 720 Change in allowance 47 (2) 49 (154) 199 Net income $5,895 $589 $5,307 $294 $963 3Q23 ex. FR Reported FR impact ex. FR 2Q23 3Q22 Average equity $55.5 $3.5 $52.0 $52.0 $50.0 ROE 41% 2% 40% 38% 34% Overhead ratio 50 (1) 50 50 56 Average loans $564.3 $94.3 $470.0 $458.4 $442.7 Average deposits 1,143.5 66.7 1,076.8 1,110.1 1,174.2 Active mobile customers (mm)4 53.2 n.a. 53.2 52.0 48.9 Debit & credit card sales volume5 $426.3 $0.5 $425.8 $423.6 $395.8 3Q23 ex. FR Reported FR impact ex. FR 2Q23 3Q22 Banking & Wealth Management Business Banking average loans6 $19.5 - $19.5 $19.6 $21.3 Business Banking loan originations 1.3 - 1.3 1.3 1.0 Client investment assets (EOP) 882.3 140.6 741.7 742.0 615.0 Deposit margin 2.92% 0.07% 2.85% 2.82% 1.83% Home Lending Average loans $264.0 $91.1 $172.9 $172.4 $176.9 Loan originations7 11.0 0.7 10.3 10.1 12.1 Third-party mortgage loans serviced (EOP) 637.8 3.0 634.9 601.4 586.7 Net charge-off/(recovery) rate (0.02)% 0.01% (0.04)% (0.07)% (0.14)% Card Services & Auto Card Services average loans $195.2 - $195.2 $187.0 $168.1 Auto average loans and leased assets 85.1 - 85.1 82.1 80.4 Auto loan and lease originations 10.2 - 10.2 12.0 7.5 Card Services net charge-off rate 2.49% - 2.49% 2.41% 1.40% Card Services net revenue rate 9.60 - 9.60 9.11 9.92 Card Services sales volume5 $296.2 - $296.2 $294.0 $272.3 6
3Q23 2Q23 3Q22 Equity $108.0 $108.0 $103.0 ROE 11% 15% 13% Overhead ratio 63 55 56 Comp/revenue 29 28 28 IB fees ($mm) $1,717 $1,557 $1,762 Average loans 232.9 227.3 221.6 Average client deposits4 638.1 647.5 669.2 Merchant processing volume5 610.1 600.1 545.4 Assets under custody ($T) 29.7 30.4 27.2 Net charge-off/(recovery) rate6 0.09 0.12 0.04 Average VaR ($mm) $38 $44 $53 $ O/(U) 3Q23 2Q23 3Q22 Revenue $11,730 ($789) ($195) Investment Banking revenue 1,613 119 (100) Payments2 2,094 (357) 55 Lending 291 (8) (32) Total Banking 3,998 (246) (77) Fixed Income Markets 4,514 (53) 45 Equity Markets 2,067 (384) (235) Securities Services 1,212 (9) 102 Credit Adjustments & Other (61) (97) (30) Total Markets & Securities Services 7,732 (543) (118) Expense 7,443 549 761 Credit costs (185) (223) (698) Net income $3,092 ($1,000) ($430) Corporate & Investment Bank1 KEY DRIVERS / STATISTICS ($B)3 Net income of $3.1B, down 12% YoY; revenue of $11.7B, down 2% YoY Banking revenue IB revenue of $1.6B, down 6% YoY IB fees down 3% YoY, driven by lower advisory fees, largely offset by higher debt underwriting fees Payments revenue of $2.1B, up 3% YoY Excluding the net impact of equity investments, which reflected an impairment in the current period, up 12%, driven by higher rates, partially offset by lower deposit balances Lending revenue of $291mm, down 10% YoY, driven by mark-to-market losses on hedges of retained loans, partially offset by higher net interest income Markets & Securities Services revenue Markets revenue of $6.6B, down 3% YoY Fixed Income Markets revenue of $4.5B, up 1% YoY, driven by higher revenue in Securitized Products and Credit, predominantly offset by lower revenue in Currencies & Emerging Markets Equity Markets revenue of $2.1B, down 10% YoY, driven by lower revenue across products when compared with a strong third quarter in the prior year Securities Services revenue of $1.2B, up 9% YoY, driven by higher rates, partially offset by lower deposit balances Expense of $7.4B, up 11% YoY, predominantly driven by higher legal expense and wage inflation Credit costs were a net benefit of $185mm Net reserve release of $230mm, driven by the impact of net lending activity and changes in the central scenario NCOs of $45mm 1 See note 1 on slide 12 2 See note 3 on slide 13 For additional footnotes see slide 14 SELECTED INCOME STATEMENT DATA ($MM) FINANCIAL PERFORMANCE CCB CIB CB AWM Corp. 2 7
Commercial Banking1 KEY DRIVERS / STATISTICS ($B)2 Net income of $1.7B, up 79% YoY Revenue of $3.7B, up 20% YoY Payments revenue of $2.0B, up 30% YoY, driven by higher rates Investment Banking and Markets revenue, gross of $821mm, up 8% YoY, reflecting increased M&A volume Expense of $1.4B, up 15% YoY, largely driven by an increase in headcount including front office and technology investments, as well as higher volume-related expense, including the impact of new client acquisition Credit costs of $64mm NCOs of $50mm Reserve build of $14mm, driven by updates to certain commercial real estate pricing variables, largely offset by other changes in the central scenario and the impact of net lending activity Average loans of $244B, up 6% YoY and up 1% QoQ C&I8 up 7% YoY and flat QoQ CRE8 up 6% YoY and up 1% QoQ Average deposits of $262B, down 7% YoY and 5% QoQ, primarily driven by lower non-operating deposits 1 See note 1 on slide 12 For additional footnotes see slide 15 FINANCIAL PERFORMANCE (ex. FR)SELECTED INCOME STATEMENT DATA ($MM) CCB CIB CB AWM Corp. 3Q23 ex. FR $ O/(U) Reported FR impact ex. FR 2Q23 3Q22 Revenue $4,031 $366 $3,665 ($145) $617 Middle Market Banking 1,876 93 1,783 (85) 417 Corporate Client Banking 1,208 - 1,208 (21) 156 Commercial Real Estate Banking 921 273 648 (28) 24 Other 26 - 26 (11) 20 Expense 1,375 18 1,357 57 177 Credit costs 90 26 64 (425) (554) Net income $1,935 $245 $1,690 $156 $744 3Q23 ex. FR Reported FR impact ex. FR 2Q23 3Q22 Average equity $30.0 $1.5 $28.5 $28.5 $25.0 ROE 25% 2% 23% 21% 14% Overhead ratio 34 (3) 37 34 39 Payments revenue ($mm)3 $2,045 - $2,045 $2,188 $1,568 Investment Banking and Markets revenue, gross ($mm)4 $821 - $821 $767 $761 Average loans5 283.0 39.0 244.0 242.2 229.1 Average client deposits 262.1 - 262.1 275.2 281.3 Allowance for loan losses 4.7 0.6 4.2 4.2 3.1 Nonaccrual loans 0.9 - 0.9 1.0 0.8 Net charge-off/(recovery) rate6 0.07% (0.01)% 0.08% 0.17% 0.07% ALL/loans6 1.68 (0.04) 1.72 1.72 1.32 7 8
Asset & Wealth Management1 KEY DRIVERS / STATISTICS ($B)2 Net income of $1.1B, down 12% YoY Revenue of $4.6B, relatively flat YoY, driven by higher management fees on strong net inflows and higher average market levels, offset by lower performance fees and lower net interest income Expense of $3.1B, up 3% YoY, driven by continued growth in private banking advisor teams and the impact of JPMAM China and Global Shares AUM of $3.2T was up 22% YoY and client assets of $4.6T were up 21% YoY, driven by continued net inflows and higher market levels For the quarter, AUM had long-term net inflows of $20B and liquidity net inflows of $40B Average loans of $211B, down 3% YoY and flat QoQ Average deposits of $202B, down 20% YoY and down 5% QoQ 1 See note 1 on slide 12 2 Actual numbers for all periods, not over/(under) SELECTED INCOME STATEMENT DATA ($MM) FINANCIAL PERFORMANCE (ex. FR) CCB CIB CB AWM Corp. 3Q23 Reported FR impact ex. FR 2Q23 3Q22 Revenue $5,005 $436 $4,569 ($71) $30 Asset Management 2,164 - 2,164 36 (45) Global Private Bank 2,841 436 2,405 (107) 75 Expense 3,138 17 3,121 (42) 93 Credit costs (13) (31) 18 19 120 Net income $1,417 $342 $1,075 ($32) ($144) ex. FR $ O/(U) 3Q23 ex. FR Reported FR impact ex. FR 2Q23 3Q22 Average equity $17.0 $1.0 $16.0 $16.0 $17.0 ROE 32% 6% 26% 27% 28% Pretax margin 38 6 31 32 36 Assets under management ("AUM") $3,186 - $3,186 $3,188 $2,616 Client assets 4,644 - 4,644 4,558 3,823 Average loans 223.8 13.0 210.8 209.8 216.7 Average deposits 202.0 - 202.0 211.9 253.0 9
Corporate1 FINANCIAL PERFORMANCE (ex. FR)SELECTED INCOME STATEMENT DATA ($MM) Revenue was $1.5B, up $1.8B YoY Net interest income was $2.0B, compared with $792mm in the prior year, driven by the impact of higher rates Noninterest revenue was a loss of $506mm, compared with a loss of $1.1B in the prior year, and included $669mm of net investment securities losses Expense of $456mm, up $151mm YoY 1 See note 1 on slide 12 CCB CIB CB AWM Corp. 3Q23 Reported FR impact ex. FR 2Q23 3Q22 Revenue $1,558 $78 $1,480 $495 $1,782 Net interest income 1,983 (3) 1,986 219 1,194 Noninterest revenue (425) 81 (506) 276 588 Expense 696 240 456 (134) 151 Credit costs 46 - 46 289 67 Net income/(loss) $812 ($99) $911 $572 $1,205 ex. FR $ O/(U) 10
Outlook1 1 See notes 1, 2 and 4 on slide 12 Expect FY2023 net interest income of ~$88.5B, market dependent Expect FY2023 net interest income excluding Markets of ~$89B, market dependent 1 Expect FY2023 Card Services NCO rate of ~2.50%3 FIRMWIDE Expect FY2023 adjusted expense of ~$84B excluding the FDIC special assessment related to systemic risk determination, market dependent Adjusted expense excludes Firmwide legal expense ($1.3B year-to-date) 2 11
Notes on non-GAAP financial measures 1. rat Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of the lines of business on a 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 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 from year-to-year 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 lement. There are no reclassifications associated with FR managed revenue 2. ews these metrics excluding CIB sactions, fees, commissions and other income, as well as net interest income. These metrics, which exclude Markets, are non-GAAP financial measures. Management reviews these metrics to assess the -liability management) and deposit-raising activities, apart from any volatility associated with Markets activities. In addition, management also assesses Markets business performance on a total revenue basis as offsets may occur across revenue lines. For example, securities that generate net interest income may be risk-managed by derivatives that are reflected at fair value in principal transactions revenue. Management believes these measures provide investors and analysts with alternative measures to analyze the revenue trends of the Firm. For a reconciliation of NII and NIR from reported to excluding Markets, refer to page 29 of the Earnings Release Financial Supplement. For additional information on Markets reven 2022 Form 10-K 3. ach non-GAAP financial measures. nd identifiable intangible assets (other than TCE, refer to page 10 of the Earnings . ROTCE ex. FR uses the same -end divided by common shares at period-end. Book value per share was $100.30, $98.11 and $87.00 at September 30, 2023, June 30, 2023 and September 30, 2022, respectively. TCE, ROTCE and TBVPS are utilized by the Firm, as well as investors and analysts, in 4. Adjusted expense and adjusted overhead ratio are each non-GAAP financial measures. Adjusted expense represents noninterest expense excluding Firmwide legal expense of $665mm, $420mm and $47mm for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively. There was no legal expense excluded from FR adjusted expense for the three months ended September 30, 2023 and June 30, 2023. adjusted expense as a percentage of managed net revenue. Management believes this information helps investors understand the effect of these items on reported 12
Additional notes 1. Reflects the Current Expected Credit Losses ("CECL") capital transition provisions. Beginning January 1, 2022, the $2.9B CECL capital benefit is being phased out at 25% per year over a three-year period. As of September 30, 2023 and June 30, 2023, CET1 capital and Total Loss-Absorbing Capacity reflected the remaining $1.4B CECL benefit; as of September 30, 2022, CET1 capital reflected a $2.2B benefit. Refer to Capital Risk Management on pages 48-53 Form 10-Q for the quarterly period ended June 30, 2023 and on pages 86- -K for additional information 2. Total excess high- in excess of what is required to meet the estimated Firm and Bank total net cash outflows over a prospective 30 calendar-day period of significant stress under the LCR rule. HQLA and unencumbered marketable securities, includes end-of-period HQLA, excluding regulatory prescribed haircuts under the LCR rule where applicable, for both the Firm and the excess HQLA-eligible securities included as part of the excess liquidity at JPMorgan Chase Bank, N.A., which are not transferable to non-bank affilia LCR. Also includes other end-of-period unencumbered marketable securities, such as equity and debt securities. Does not include borrowing capacity at Federal Home Loan Banks and the discount window at the Federal Reserve Bank. Refer to Liquidity Risk Management on pages 54- Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 and on pages 97- -K for additional information 3. In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation 4. The 3Q22 prior-period amount has been revised to conform with the current presentation, which uses end-of-period HQLA and end-of-period unencumbered marketable securities. Previous presentations used average Firm HQLA (consistent with the LCR metric) and end-of-period unencumbered marketable securities 13
Additional notes on slides 4-7 Slide 4 1. 2. 3. Estimate for operational risk losses calculated as follows: Federal Reserve nine-quarter operational risk losses of $185B for all CCAR banks allocated pro-rata based on total assets and adjusted for a 50% haircut to reflect timing of peak stress occurring prior to the end of nine quarters. Applying this to JPM: $185B x 17% x 50% = ~$15B 4. er the B3E regime would put JPMorgan below the 2.5% floor, resulting in an effective increase in the dollars of SCB 5. Reflects CET1 based on estimated 3Q23 Standardized RWA with a 2.9% SCB and 4.5% GSIB Slide 5 1. 19% capital increase for Category I and II bank holding companies, as stated in the B3E NPR 2. Assumes flat balance sheet based on estimated 3Q23 Standardized RWA 3. 4. - hich we reported as a 1Q22 Standardized RWA increase of $40B; and current SCB 2.9% vs. CCB of 2.5% 5. pact incorporates the benefit of a higher B3E RWA on the short- 6. Slide 6 Consumer & Community Banking 3. Actual numbers for all periods, not over/(under) 4. Users of all JPMorgan Chase mobile platforms who have logged in within the past 90 days. Excludes First Republic 5. Excludes Commercial Card 6. Includes the impact of loans originated under the PPP. For further information, refer to page 13 of the Earnings Release Financial Supplement 7. Firmwide mortgage origination volume was $13.0B, $13.0B and $15.2B for the three months ended September 30, 2023, June 30, 2023 and September 30, 2022, respectively Slide 7 Corporate & Investment Bank 3. Actual numbers for all periods, not over/(under) 4. Client deposits and other third-party liabilities pertain to the Payments and Securities Services businesses 5. Represents Firmwide merchant processing volume 6. Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate 14
Additional notes on slide 8 Slide 8 Commercial Banking 2. Actual numbers for all periods, not over/(under) 3. In the third quarter of 2023, certain revenue from CIB Markets products was reclassified from payments to investment banking. Prior-period amounts have been revised to conform with the current presentation 4. Includes gross revenues earned by the Firm that are subject to a revenue sharing arrangement between CB and the CIB for Investme s 2022 Form 10-K for discussion of revenue sharing 5. Includes the impact of loans originated under the PPP. For further information, refer to page 20 of the Earnings Release Financial Supplement 6. Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate and loan loss coverage ratio 7. Note that FR net charge-offs were a loss of $4mm in CB in 3Q23; the FR impact to the net charge-off rate is negative due to the addition of FR loans to the overall denominator 8. and do not align with regulatory definitions 15
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 & forth in the forward- materially from those described in the forward- Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, which have been filed with the Securities and Exchange Commission and -web.com/financial- information/sec- Chase & Co. does not undertake to update any forward-looking statements. 16